Taxes are a fact of life, but where you live in the U.S. can mean the difference between a hefty chunk of your paycheck disappearing or keeping most of what you earn. A fresh look at state-by-state tax burdens reveals the usual suspects at the top and some surprising havens at the bottom. Here’s where Americans feel the pinch—and where they don’t.
The Heavy Hitters
Leading the pack is New York, where residents fork over 12.1% of their income to state and local taxes, according to the latest 2025 data. Between steep income taxes and sky-high property levies, the Empire State doesn’t mess around. Hawaii follows close behind at 11.9%, its high cost of living amplified by a hefty tax bite—think sales taxes that sting on every island purchase. Vermont rounds out the top three at 11.2%, where progressive income taxes and rural property costs pile up fast. Maine (10.8%) and California (10.5%) aren’t far off, blending income, sales, and property taxes into a cocktail that keeps wallets light.
The Light Touch
On the flip side, Alaska reigns as the tax-friendliest state, with residents paying just 4.7% of their income. No state income tax and reliance on oil revenue keep the burden low—though don’t expect cheap gas. New Hampshire clocks in at 5.5%, skipping income tax on earned wages and leaning on property taxes instead. Wyoming’s 5.8% rate thrives on a no-income-tax policy and mineral wealth, while Florida (6.0%) and Tennessee (6.2%) round out the bottom five, both dodging income taxes and favoring sales-driven revenue. Sunshine and savings? Maybe.
What It Means
The gap’s no fluke. High-tax states often fund robust services—think New York’s subways or Vermont’s schools—while low-tax states bet on leaner governments or natural resource cash. But it’s not all rosy: Alaska’s isolation jacks up living costs, and Florida’s sales tax can sneak up on you. As remote work untethers people from pricey metros, these tax rankings could nudge more folks toward lighter burdens—or at least spark a debate over what that extra tax dollar buys.
The Takeaway
Whether you’re eyeing a move or just griping over your latest bill, location matters. New Yorkers might envy Alaska’s tax holiday, but every state’s got its trade-offs. In 2025, the tax map’s as stark as ever—choose your spot wisely.