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If you hate paying taxes and need to conserve more of your income, you may need to move to one of those more productive states for “middle class” families (states that have a relatively low tax burden for middle-income families).
After all, the cost of living for “middle class” families is already quite high, and who wouldn’t have to pay less tax?
What it costs to belong to the middle class
Average wages can differ particularly from state to state. Therefore, to determine which states have the lowest tax burden for middle-income households, we analyzed each state’s median annual wage. Below, we calculate the average annual tax spent across 3 main tax categories: state income tax source, asset taxes, and sales taxes on must-have items (groceries, diapers, and feminine hygiene products).
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The states with the lowest revenue spent on state taxes were on our list, and here they are.
Median Annual Income: $68,002
Percentage of revenue source spent on taxes: 2. 2%
Wyoming taxes certain essential items, such as diapers and feminine hygiene products. Despite this, the lack of a source of income tax and moderate asset taxes (compared to those in other states) puts Wyoming among the most sensible revenue sources on our list. households, when it comes to a low tax burden.
Median Annual Income: $65,686
Percentage of tax spending: 2. 8%
Most states still tax diapers, and Nevada is one of them. However, the state has banned sales tax on certain feminine hygiene products. The lack of a private source of income taxes and low asset taxes compared to other states make Nevada an overall tax-friendly state for families and middle-income households.
Median Annual Income: $58,516
Percentage of tax spending: 3. 4%
Tennessee taxes diapers and feminine hygiene products. It is also one of thirteen states that still tax groceries. However, the state does not have a non-public source of income taxes and asset taxes are low compared to other states. Tennessee ranks third in our rankings.
Median Annual Income: $61,777
Percentage of revenue source spent on taxes: 3. 5%
Florida does not have a private source of income tax. In addition, a recent Florida tax relief bill eliminated state sales tax on many must-have baby and baby products, adding diapers, wipes, and strollers. The bill also eliminated the sales tax on certain feminine hygiene products. Average asset taxes aren’t incredibly high, but they’re also not incredibly low compared to other states. Florida does not tax groceries.
Median Annual Income: $68,131
Percentage of tax spending: 4. 3%
North Dakota has a private source of income taxes, but rates for middle-class families are low compared to most other states that impose taxes on the source of income. North Dakota’s asset taxes are reasonable, and the state no longer taxes diapers. North Dakota still imposes a sales tax on feminine hygiene products, but overall, it’s still one of the most productive states for middle-income families when it comes to paying less tax.
Median Annual Income: $80,287
Percentage of tax spending: 4. 3%
Alaska does not have a private source of income tax or a state-level sales tax. However, local tax jurisdictions would possibly tax food, diapers, and feminine hygiene products. Alaska is in the middle of our rating because of its major assets. taxation.
Median Annual Income: $65,913
Percentage of tax spending: 4. 7%
Arizona has a source of income taxes. The state also taxes diapers and feminine hygiene products. But there are no state taxes on groceries, and Arizona’s average taxes on assets are very high compared to other states. Therefore, Arizona occupies the seventh position on this list.
Median Annual Income: $82,400
Percentage of tax spending: 4. 7%
Washington has the highest asset taxes compared to other states. Washington also taxes diapers, but the state is still on that list since it doesn’t have a private source of income taxes.
Median Annual Income: $63,920
Percentage of tax spending: 4. 7%
South Dakota taxes must-have items, adding diapers, feminine hygiene products, and even groceries. Property taxes in South Dakota are also not very low compared to other states. But because the state doesn’t have an income tax source, South Dakota ranks ninth among tax-advantaged states for families and middle-income households.
Median Annual Income: $53,571
Percentage of tax expenditure: 4. 9%
Louisiana has a non-public source of income taxes, however, the state has one of the lowest asset taxes in the United States, and the state also does not tax must-have items like groceries or diapers. Therefore, Louisiana ranks tenth. More productive state for middle-income families who hate paying taxes.
Middle Class Income and Taxes: A Comprehensive Methodology
Median annual household wages for each state were collected from the U. S. Census Bureau. U. S. data for the year 2021 (most recent knowledge available). The source of the personal income tax was calculated using an ADP wage calculator. We use monthly payment periods and opt for joint deposit statements. and two allowances (if applicable). The source of income taxes paid varies from filer to filer and may depend on your source of income, your filing status, and the amount of credits and deductions you are entitled to when filing your taxes.
Total average grocery prices were calculated by averaging the average grocery spending of high- and low-income families in 2021, as reported by the U. S. Department of Agriculture. U. S. Average monthly spending on diapers is based on estimates from the National Diaper Bank Network. The average charge of feminine hygiene products taken from the National Organization for Women. We use sales tax rates (combined average rates of local and state sales taxes) provided through the Tax Foundation to calculate the average sales tax spent on must-have parts. Spending on must-have parts may be more than $0 in some locations, even if must-have parts are not taxed at the state level.
The average annual knowledge paid on asset tax comes from PropertyShark and is based on knowledge provided through the U. S. Census Bureau. U. S.
The average taxes spent were added for each state to the percentage of the overall source of household income paid to state taxes. Dollar amounts were rounded up to the nearest penny. Percentages were rounded to one-tenth of a closer percentage.
For what is meant by “average source of income” (also referred to in this story as “middle class”), the median relative source of income in each state was used. However, the definition of “average source of income” can vary widely. For the purposes of this classification, “circle of kinship” refers to any relative with at least one adult who is still raising at least one child. The amount of taxes paid can vary depending on several factors, adding up the length of the circle of relatives and the number of adults of the working relatives.
Katelyn has over 6 years of experience in the tax and finance field. While she specializes in tax content, Katelyn has also written for online publications on topics such as insurance, retirement, and money plans and has received monetary recommendations commissioned through national agencies. Printed publications. She believes that wisdom is the key to good fortune and enjoys helping others achieve their goals by offering content that educates and informs.