Here’s a helpful yet limited survey — comparing the states’ income tax paid on earned income — combined with the federal income tax. The comparison uses $50K and $200K salaries.
CA has a highly progressive state income tax, so we don’t rank TOO badly at $50K. At $200K, CA is a close second to Oregon — the worst state.
Indeed, at $200K, less than $100 tax separates these worst two states — they are essentially tied. CA moves to #1 above $200K (not included in the article), and the difference between the two states becomes more pronounced, the higher one’s income is above that $200K benchmark.
This comparison counts only earned income — capital gains and dividends are treated differently by many states (NOT California). And it understandably doesn’t include other taxes — notably property taxes and sales taxes. That would constitute a MAJOR project with lots of logistical difficulties.
BTW, Oregon has no sales tax. CA has the nation’s 9th highest average sales tax as of January 2019 — with a TON of CA local sales tax increases set to take effect this spring, and a bunch more such local increases going to the ballot across the state shortly.
In this article there are two excellent maps of the tax rates of each state — one map at $50,000 income, and one map at $200,000. Look ’em over. If you make a six-figure income in California, the Golden State starts to look less and less attractive.
People making $200,000 a year are in the top 10 percent of U.S. earners, while those earning $50,000 are more on par with the average American, given the median U.S. salary of $56,516.
Wherever you fall on the spectrum, the reality of take home pay will vary depending on the state in which you live.
California has a progressive tax rate ranging from 1 – 13.3 percent depending on how much you earn – making it one of the highest taxed states in the nation.Similarly, Hawaii has a tax rate ranging from 1.4-11 percent, while Oregon’s falls between 5-9.9 percent and Maryland’s ranges from 2-5.75 percent.
Ultimately, Oregon has the lowest take home salary in the nation for earners in both categories: a $50,000 salary adds up to $37,345 after taxes, while a $200,000 salary amounts to $127,720 in take home pay.
The state offsets its high income taxes by being one of just five states that don’t have a sales tax.
Meanwhile, Californians take home less as their salaries grow; a $50,000 earner get $38,778 after taxes, only slightly less than the national average. But people making $200,000 would have a take home of $127,819 – second-lowest in the nation for that level of earnings.