A new analysis of the taxes that people pay all across the U.S. shows that California residents are second only to New York residents when it comes to paying the federal government the most in taxes.
WalletHub performed the study, and what they found is that where you live has a huge affect on how much you pay in taxes. That may not be too surprising, but the difference may surprise you.
For example, residents in states that don’t impose income tax will obviously have a lower tax rate than states like California. Alaska — which does not impose income tax — ranked second lowest in the study, with residents paying only $2,791 for state and local taxes. That ranked well below the national average.
For comparison, California residents paid $9,509 for state and local taxes, which is 36 percent more than the national average. New York residents paid 40 percent more than the national average, totaling $9,718 in state and local taxes.
Look, there are many different ways to view this study. In some ways, it may appear as though California residents are unfairly taxed. In others, it is perfectly understandable why California residents are taxed at the rate they are.
But no matter the reality of how people in certain states are taxed, the fact is that there are so many rules and regulations regarding the taxes that are imposed. From out-of-country citizens, to high-asset residents, there are a lot of complicated tax situations facing a number of people as we close in on tax day.
Source: Los Angeles Times, “California second only to New York in high taxes, study says,” Shan Li, March 20, 2014