Ranking of of local and state taxes demonstrate what may be unsurprising - New York is the most heavily taxed US state, with New Jersey, Connecticut and California also in the top four.

As the calendar winds down towards tax filing day in the US (returns must be filed with the IRS by April 15), a ranking highlights, what perhaps is unsurprising news, that New York, New Jersey and Connecticut are the three most heavily taxed states in the Union. 

With proposed new taxes on non-resident owners of luxury properties in New York looming as a new threat, a report by the 247wallstreet.com website, using data from the Tax Foundation, said that New Yorkers pay taxes as a share of income at 12.7 per cent. Income tax collections per capita are $2,345, the highest in the country. General sales tax collections per capita are $682, the fifteenth lowest in the US.

Just behind New York is Connecticut, where taxes as percentage of income stand at 12.6 per cent. For New Jersey, the level is 12.2 per cent, and California is 11.0 per cent. Illinois is fifth, at 11.0 per cent.

President Donald J Trump’s tax package, enacted in late 2017, limited deductions for state and local taxes from federal income tax rates, a move seen as squeezing the higher-taxing coastal cities (which typically lean towards the Democrats politically). 

Comparisons can be complicated – a fact that non-Americans may not fully appreciate, even if they work in the wealth management sector. Four states don’t charge a sales tax and seven, such as Texas and Nevada, don’t set a state income tax. Some 13 states make the most revenue share from sales taxes. The report noted that while some states collect as little as $2,800 per capita annually, others collect well over $6,000. Variations also reflect not just local politics – New York for example is typically more left-leaning and favors higher public spending – but also the greater public services and infrastructure needs of big cities, in contrast with more rural, sparsely populated states, such as Wyoming. Such data also may highlight why states such as Florida and Texas have grown as financial services centers in recent years, even if practitioners may not cite tax as the dominant locational factor.

Explaining its methodology, the publication said it reviewed state and local tax burdens as a share of state residents’ income in the 2012 financial year. In the case of ties, the state with the higher state and local tax collections per capita dollar value ranked lower on the publication's list. Personal income per capita for each state is for 2017 and came from the US Bureau of Economic Analysis. State individual income tax collections per capita are for the 2016 financial; state and local property tax collections per capita are for the 2015 financial year.