Which U.S. States Have the Lowest Income Taxes?
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Which U.S. States Have the Lowest Income Taxes?

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Another U.S. tax deadline has passed, and you may be wondering how green the grass is on the other side of the state border. Today’s maps and charts, from cost information website HowMuch.net, show the difference in tax rates between states to help you discover which states pay the lowest income taxes.

Before we dive in to the data, it is worth noting that there are seven states that currently have zero interest tax, including Florida, Nevada, Texas, Alaska, South Dakota, Washington State and Wyoming. New Hampshire and Tennessee also have no income tax, but they do tax interest and dividends.

The other 41 states (and one district) all levy an income tax. Here’s the average amount paid in each state:

Average Income Tax

Average Income Tax

California has the highest average tax of any state at 10.4%. Oregon, Minnesota, Hawaii, DC, New York, Vermont, and Maine also have average state income taxes that are higher than 7.5%.

Aside from the states with zero income tax, there are also 14 that have average tax rates below 5%.

However, as HowMuch.net notes, the average isn’t necessarily the best indicator when it comes to this data. Since most tax schemes are progressive, the tax rates of most states vary heavily depending on the level of personal income each year.

Here’s the difference between what the highest income group (top 0.1%) and the median income group (top 50%) are paying:

Income Tax Gap: Rate for Top 0.1% vs. Top 50%

Income tax gap

Illustrated a different way, see how this changes based on moving up the tax bracket from the top 25% to the top 0.1%:

Income Tax Rate: Top 25%

Income tax for top 25%

The top 25% of earners ($74,955 per year and up) pay the most in Oregon, which has a tax rate of 7.4%. Three other states charge 6% or more: Hawaii (6.89%), Idaho (6.05%) and Maine (6.00%).

Compare this to the top 0.1% bracket of earners ($1,860,848 per year and up):

Income Tax Rate: Top 0.1%

Income tax for Top 1%

California now charges the most at 11.54%, while Oregon, Minnesota, and Hawaii all have rates hovering around 10%.

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Mapped: The Salary You Need to Buy a Home in 50 U.S. Cities

Is owning a home still realistic? This map lays out the salary you’d need to buy a home in 50 different U.S. metro areas.

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This is the Salary You Need to Buy a Home in 50 U.S. Cities

Depending on where you live, owning a home may seem like a far off dream or it could be fairly realistic. In New York City, for example, a person needs to be making at least six figures to buy a home, but in Cleveland you could do it with just over $45,000 a year.

This visual, using data from Home Sweet Home, maps out the annual salary you’d need for home ownership in 50 different U.S. cities.

Note: The map above refers to entire metro areas and uses Q1 2022 data on median home prices. The necessary salary was calculated by the source, looking at the base cost of principal, interest, property tax, and homeowner’s insurance.

Home Ownership Across the U.S.

San Jose is by far the most expensive city when it comes to purchasing a home. A person would need to earn over $330,000 annually to pay off the mortgage at a monthly rate of $7,718.

Here’s a closer look at the numbers:

RankMetro AreaMedian Home PriceSalary Needed
#1San Jose$1,875,000$330,758
#2San Francisco$1,380,000$249,685
#3San Diego$905,000$166,828
#4Los Angeles$792,500$149,127
#5Seattle$746,200$140,768
#6Boston$639,000$130,203
#7New York City$578,100$129,459
#8Denver$662,200$121,888
#9Austin$540,700$114,679
#10Washington, D.C.$553,000$110,327
#11Portland$570,500$109,267
#12Riverside/San Bernardino$560,000$106,192
#13Sacramento$545,000$105,934
#14Miami$530,000$103,744
#15Salt Lake City$556,900$100,970
#16Providence$406,700$88,477
#17Phoenix$474,500$86,295
#18Las Vegas$461,100$84,116
#19Raleigh$439,100$83,561
#20Dallas$365,400$81,165
#21Orlando$399,900$79,573
#22Chicago$325,400$76,463
#23Tampa$379,900$75,416
#24Houston$330,800$74,673
#25Minneapolis$355,800$74,145
#26Baltimore$350,900$73,803
#27Nashville$387,200$73,502
#28Jacksonville$365,900$73,465
#29Hartford$291,000$73,165
#30Charlotte$379,900$72,348
#31San Antonio$321,100$70,901
#32Atlanta$350,300$69,619
#33Philadelphia$297,900$69,569
#34Richmond$354,500$68,629
#35Milwaukee$298,800$65,922
#36Kansas City$287,400$60,507
#37Columbus$274,300$59,321
#38Virginia Beach$289,900$59,245
#39New Orleans$281,100$57,853
#40Birmingham$289,500$55,662
#41Indianapolis$271,600$53,586
#42Memphis$259,300$52,691
#43Cincinnati$244,300$51,840
#44Buffalo$202,300$51,525
#45Detroit$224,300$50,302
#46St Louis$216,700$48,988
#47Louisville$235,400$48,121
#48Cleveland$192,700$45,448
#49Oklahoma City$198,200$45,299
#50Pittsburgh$185,700$42,858

Perhaps surprisingly, Boston residents need slightly higher earnings than New Yorkers to buy a home. The same is also true in Seattle and Los Angeles. Meanwhile, some of the cheapest cities to start buying up real estate in are Oklahoma City and Cleveland.

As of April, the rate of home ownership in the U.S. is 65%. This number represents the share of homes that are occupied by the owner, rather than rented out or vacant.

The American Dream Home

As of the time of this data (Q1 2022), the national yearly fixed mortgage rate sat at 4% and median home price at $368,200. This put the salary needed to buy a home at almost $76,000⁠—the median national household income falls almost $9,000 below that.

But what kind of homes are people looking to purchase? Depending on where you live the type of home and square footage you can get will be very different.

In New York City, for example, there are fairly few stand-alone, single-family houses in the traditional sense⁠—only around 4,000 are ever on the market. People in the Big Apple tend to buy condominiums or multi-family units.

Additionally, if you’re looking for luxury, not even seven figures will get you much in the big cities. In Miami, a million dollars will only buy you 833 square feet of prime real estate.

One thing is for sure: the typical American dream home of the big house with a yard and white picket fence is more attainable in smaller metro areas with ample suburbs.

Buying vs. Renting

The U.S. median household income is $67,500, meaning that today the typical family could only afford a home in about 15 of the 50 metro areas highlighted above, including New Orleans, Buffalo, and Indianapolis.

With the income gap widening in the U.S., the rental market remains a more attractive option for many, especially as prices are finally tapering off. The national median rent price was down nearly 3% from June to July for two-bedroom apartments.

At the end of the day, buying a home can be an important investment and may provide a sense of security, but it will be much easier to do in certain types of cities.

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What Does It Take To Be Wealthy in America?

This infographic visualizes several net worth milestones to give you a better idea of where you stand today.

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What Does it Take to be Wealthy in America?

The goalposts of wealth are always shifting due to inflation and other factors.

For example, someone with a net worth of $1 million several decades ago would have been considered very wealthy. According to recent survey results, however, $1 million is only enough to feel “financially comfortable” today.

In this infographic, we’ve visualized several money milestones to give you a better idea of what it really takes to be wealthy in America.

Net Worth Milestones

This table lists the data used in the above infographic.

It covers data on what it takes to get into the top one percent for wealth in key states, along with broader survey results about what net worth thresholds must be crossed in order to be considered “comfortable financially” or even “wealthy”.

MilestoneSourceAs of DateNet Worth (USD)
What it takes to be in California’s top 1%Windfall2020$6.8M
What it takes to be in America’s top 1%Knight Frank2021$4.4M
What it takes to be in New York’s top 1%Windfall2020$4.2M
What it takes to be wealthy in AmericaCharles Schwab survey2022$2.2M
What it takes to be in the UK’s top 1%Knight Frank2021$1.8M
What it takes to be financially comfortable in AmericaCharles Schwab survey2022$774,000
What it takes to be in Mississippi’s top 1%Windfall2020$766,000
The average American’s net worth (median)Federal Reserve2019$122,000

According to Charles Schwab’s Modern Wealth Survey, a net worth of $774,000 is needed to feel “financially comfortable”, while $2.2 million is needed to be considered “wealthy”.

Both of these milestones are far greater than the average (median) American’s wealth, which according to the Federal Reserve, was $122,000 in 2019.

Joining the One Percent

Research by Knight Frank determined that in order to be a member of America’s one percent, one would need a net worth of $4.4 million. This is very high compared to other developed countries such as Japan ($1.5 million), the UK ($1.8 million), and Australia ($2.8 million).

The difference is partly due to America’s large population of ultra high net worth individuals, which includes the country’s 724 billionaires. See below for a list of the top five countries by number of billionaires.

CountryNumber of Billionaires
🇺🇸 U.S.724
🇨🇳 China (inc. Hong Kong & Macau)698
🇮🇳 India140
🇩🇪 Germany136
🇷🇺 Russia117

Source: World Population Review (As of 2021)

Focusing again on the U.S., we can also see large discrepancies at the individual state level. Entry into California’s one percent requires a net worth of $6.8 million, which is 62% higher than the national average.

California is famously home to many of the world’s richest people, including Google co-founder Larry Page, and Facebook founder Mark Zuckerberg.

Being a one percenter in Mississippi, on the other hand, requires $766,000. That’s 83% lower than the national average, and just a tad lower than the amount needed to be “financially comfortable” by the average American. This is partially due to Mississippi’s poverty rate of 19.6%, which according to the U.S. Census Bureau, is the highest in the country.

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