Least Tax-Friendly States for Middle-Class Families

Map of U.S. states made out of a $100 bill

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last updated 12 December 2023

It’s no secret that many middle-class families are struggling. Higher grocery expenses and housing costs are major factors, but high tax burdens can make matters worse. If you live in one of the least tax-friendly states for middle-class families, you probably know this too well.

Least tax-friendly states for the middle-class

Median salaries can differ greatly from state to state, so to determine which states have the highest tax burden for households with middle incomes, we considered each state’s median annual salary. Then, we calculated the average annual tax spent for three main tax categories: state income tax, property taxes, and sales taxes on essential items (groceries, diapers, and feminine hygiene products).

We didn’t consider sales tax for states that don't tax essentials at the state level.
It is important to note that local sales taxes may apply.
(See below for full details about the methodology Kiplinger used to rank the states for this story.)

The states with the highest percentage of income spent on state taxes made our list. And here they are.

1/10

Hawaii

Median annual household income: $92,548

Percent of income spent on taxes: 9.87%

Hawaii technically doesn’t impose a sales tax. However, the general state excise tax (GET) applies to groceries and other essential items. For that reason, middle-class families in the Aloha State spend more on sales tax for essentials than any other state on this list. Even so, low property taxes and a higher median income barely place Hawaii on this list, at number 10.

Average income tax: $6,733.32
Median annual property taxes: $1,893
Average sales tax for essentials: $512.44
Total annual amount spent on taxes: $9,138.76

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2/10

Massachusetts

Median annual household income: $94,488

Percent of income spent on taxes: 10.35%

The median income in Massachusetts reaches nearly $95,000, and the Commonwealth doesn’t impose sales taxes on essential items. However, with the median property tax bill exceeding $5,000 and average state income taxes reaching almost as high, middle-class families in the Bay State spend more than 10% of their income on state taxes.

Average income tax: $4,686.72
Median annual property taxes: $5,091
Average sales tax for essentials: $0
Total annual amount spent on taxes: $9,777.72

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3/10

Rhode Island

Median annual household income: $81,854

Percent of income spent on taxes: 10.43%

Rhode Island might be a small state, but middle-class families in the Ocean State can experience big tax bills. Between state income taxes and property tax bills, the average middle-class household spends more than $8,500 on state taxes. And given the median income of just under $82,000, middle-class families in Rhode Island face the 8th highest tax burden in the U.S.

Average income tax: $4,053.96
Median annual property taxes: $4,483
Average sales tax for essentials: $0
Total annual amount spent on taxes: $8,536.96

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4/10

Vermont

Median annual household income: $73,991

Percent of income spent on taxes: 10.47%

Vermont is considered one of the least tax-friendly states for middle-class families largely due to a lower state median income (compared with other states on this list). So, despite families spending nearly $1,000 less on state taxes than in Rhode Island, those considered middle-class in Vermont face a higher tax burden.

Average income tax: $3,176.88
Median annual property taxes: $4,570
Average sales tax for essentials: $0
Total annual amount spent on taxes: $7,746.88

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5/10

Maryland

Median annual household income: $94,991

Percent of income spent on taxes: 11.29%

The median income in Maryland is high compared to most other states, but state income taxes are high, too. For this reason, the Old Line State earns its place as the 6th least tax-friendly for middle-class families.

Average income tax: $7,094.64
Median annual property taxes: $3,633
Average sales tax for essentials: $0
Total annual amount spent on taxes: $10,727.64

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6/10

California

Median annual household income: $91,551

Percent of income spent on taxes: 11.90%

The Golden State lands at number 5 for the least tax-friendly, with middle-class families spending nearly 12% of their income on state taxes. It’s important to note that although the median property tax bill in California is just under $4,300, property tax burdens can vary greatly within the state. For example, property taxes might not reach $2,000 in the cheapest places in California. However, homeowners in other areas of the state could pay more than $9,000 per year.

Average income tax: $6,619.52
Median annual property taxes: $4,279
Average sales tax for essentials: $0
Total annual amount spent on taxes: $10,898.52

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7/10

New York

Median annual household income: $79,557

Percent of income spent on taxes: 12.67%

New York is often thought of as a high-taxed state, and this proves true for the middle class. On average, middle-class families in the Empire State spend nearly 13% of their annual income on state taxes despite the state not taxing any essential items. Families in New York City might pay even more in taxes since the city imposes its own income tax.

Average income tax: $4,197.36
Median annual property taxes: $5,884
Average sales tax for essentials: $0
Total annual amount spent on taxes: $10,081.36

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8/10

Illinois

Median annual household income: $76,708

Percent of income spent on taxes: 12.70%

While Illinois is a state that doesn’t tax retirement income, you’re out of luck if you’re still working. Average income taxes for the middle class reach nearly $5,000, and property bills in Prairie State are on the high end, too. To make matters worse, Illinois is one of only 13 states that tax groceries.

Average income tax: $4,909.32
Median annual property taxes: $4,744
Average sales tax for essentials: $88.97
Total annual amount spent on taxes: $9,742.29

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9/10

New Jersey

Median annual household income: $96,346

Percent of income spent on taxes: 14.21%

Middle-class families in New Jersey face high tax burdens, mostly due to extremely high property taxes. Families who rent might find the Garden State more tax-friendly, especially considering the median income of more than $96,000.

Average income tax: $4,891.44
Median annual property taxes: $8,797
Average sales tax for essentials: $0
Total annual amount spent on taxes: $13,688.44

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10/10

Connecticut

Median annual household income: $88,429

Percent of income spent on taxes: 14.45%

Middle-class families in Connecticut spend more than 14% of their income on state taxes. While this is mostly due to high property tax bills, state income taxes in the Constitution State are higher than in most other states, too. And although Connecticut doesn’t tax essential items, it still earns its place as the number 1 least tax-friendly state for the middle class.

Average income tax: $6,623.40
Median annual property taxes: $6,153
Average sales tax for essentials: $0
Total annual amount spent on taxes: $12,776.40

Median annual household salaries for each state were collected from the latest U.S. Census Bureau data. Personal income taxes were calculated using an ADP salary calculator. We used monthly pay periods and did not consider extra withholdings or allowances. Income taxes paid vary from filer to filer and can depend on your income, filing status, and the number of credits and deductions you qualify for when filing your taxes.

Total average grocery costs were calculated by averaging the average grocery spending by high and low-income households as reported by the U.S. Department of Agriculture. The average monthly diaper expense is based on estimates from the National Diaper Bank Network. The average cost of feminine hygiene products was taken from the National Organization for Women. We used sales tax rates (average combined local and state sales tax rates) provided by the Tax Foundation to calculate the average sales taxes spent on essential items. Tax spent on essential items may be higher than $0 in some localities, even if essentials aren't taxed at the state level.

The data for median annual property taxes paid is from PropertyShark and is based on data provided by the U.S. Census Bureau.

Average taxes spent were added for each state to find the total percentage of household income paid to state taxes. Dollar amounts were rounded to the nearest cent. Percentages are rounded to the nearest hundredth of a percent.

For purposes of this ranking, “family” means any household with at least one adult still raising at least one child. The taxes paid can vary depending on several factors, including family size and the number of adults in the household who work.

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Katelyn has more than 6 years’ experience working in tax and finance. While she specializes in tax content, Katelyn has also written for digital publications on topics including insurance, retirement and financial planning and has had financial advice commissioned by national print publications. She believes that knowledge is the key to success and enjoys helping others reach their goals by providing content that educates and informs.