States With The Highest Income Tax In 2023
Overview of Income Tax in the United States
The United States has a federal income tax system. This means that, regardless of what state you live in, the federal government collects taxes from all citizens and legal residents. However, individual states also have their own income tax systems, which vary from state to state. While some states have no income tax, others have relatively high income taxes. In this article, we will take a look at the states with the highest income tax in 2023.
California
California is one of the highest-taxing states in the US. It has the highest top marginal tax rate in the country at 13.3%. This rate applies to individuals who make $1 million or more in taxable income. For individuals making between $56,000 and $286,499, the rate is 9.3%. For individuals making between $286,499 and $1 million, the rate is 11.3%. California also has a 1% mental health services tax that applies to taxable income over $1 million. In addition, California has a 1% surcharge on taxable income over $1 million for individuals and couples filing jointly.
Oregon
Oregon has the second highest top marginal tax rate in the country at 9.9%. This rate applies to individuals making $125,000 or more in taxable income. For individuals making between $33,001 and $125,000, the rate is 9%. Oregon also has a state-mandated surcharge of 1.8% on taxable income that exceeds $125,000. This surcharge is known as the “kicker” and is used to fund public schools.
Minnesota
Minnesota has the third highest top marginal tax rate in the country at 9.85%. This rate applies to individuals making $160,020 or more in taxable income. For individuals making between $37,501 and $160,020, the rate is 7.85%. Minnesota also has a “surcharge” of 2% on taxable income that exceeds $160,020. This surcharge is used to fund public schools.
Iowa
Iowa has the fourth highest top marginal tax rate in the country at 8.98%. This rate applies to individuals making $73,710 or more in taxable income. For individuals making between $9,251 and $73,710, the rate is 6.12%. Iowa also has a 1% surcharge on taxable income that exceeds $73,710. This surcharge is used to fund public schools.
Vermont
Vermont has the fifth highest top marginal tax rate in the country at 8.95%. This rate applies to individuals making $413,000 or more in taxable income. For individuals making between $37,650 and $413,000, the rate is 6.6%. Vermont also has a 1% surcharge on taxable income that exceeds $413,000. This surcharge is used to fund the Vermont Education Fund.
New York
New York has the sixth highest top marginal tax rate in the country at 8.82%. This rate applies to individuals making $1 million or more in taxable income. For individuals making between $78,750 and $1 million, the rate is 6.85%. New York also has a “millionaire’s tax” of 2.6% on taxable income that exceeds $1 million. This tax is used to fund public schools.
Hawaii
Hawaii has the seventh highest top marginal tax rate in the country at 8.25%. This rate applies to individuals making $200,000 or more in taxable income. For individuals making between $48,000 and $200,000, the rate is 6.4%. Hawaii also has a “temporary surcharge” of 1.25% on taxable income that exceeds $200,000. This surcharge is used to fund public schools.
Maine
Maine has the eighth highest top marginal tax rate in the country at 7.15%. This rate applies to individuals making $51,150 or more in taxable income. For individuals making between $21,450 and $51,150, the rate is 6.5%. Maine also has a “surcharge” of 0.5% on taxable income that exceeds $51,150. This surcharge is used to fund public schools.
Connecticut
Connecticut has the ninth highest top marginal tax rate in the country at 6.99%. This rate applies to individuals making $500,000 or more in taxable income. For individuals making between $10,000 and $500,000, the rate is 6.5%. Connecticut also has a “surcharge” of 0.5% on taxable income that exceeds $500,000. This surcharge is used to fund public schools.
Wisconsin
Wisconsin has the tenth highest top marginal tax rate in the country at 7.65%. This rate applies to individuals making $243,200 or more in taxable income. For individuals making between $14,040 and $243,200, the rate is 6.27%. Wisconsin also has a “surcharge” of 1.38% on taxable income that exceeds $243,200. This surcharge is used to fund public schools.