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lowest federal tax

States that pay the most (and least) in federal taxes

MoneyRates.com Senior Financial Analyst, CFA
March 13, 2015

Just about everyone grumbles about taxes with April 15 approaching, but who has the most right to complain? To find out, MoneyRates.com took a state-by-state look at where the federal tax burdens are highest -- and where they are lowest.

Based on an analysis of IRS data, the average adult in the United States pays $4,922.39 in taxes annually. However, there are huge differences from state to state: This figure ranges from a high of $9,142.10 in Connecticut to a low of $2,597.21 in Mississippi. This is partly, but not entirely, a function of relative wealth, because even when adjusted for tax brackets, the average tax rate paid ranges from a high of 12.52 percent in Alaska to a low of 10.39 percent in Utah.

When you put it all together, it turns out that on average that the residents of Washington DC are contributing most heavily to the federal budget (perhaps appropriately, because some of them are the same folks who are spending it). At the other extreme, people in Arkansas are contributing the least on average.


If looked at simply in terms of raw dollars, states with the largest populations would tend to pay the most taxes, but this does not measure the typical contribution of people in each state. In terms of tax rates, states with the wealthiest populations would tend to pay the highest percentages of their income. Despite resentments aimed at the "1 percent," people earning more than $100,000 pay nearly three times as high a percentage of income in taxes as people earning under $100,000.

To adjust for state-by-state differences in population and wealth, MoneyRates.com looked at tax data in the following ways:

  1. On a per capita basis, for a look at the dollars paid per adult, so population size would be irrelevant.
  2. On an equally weighted basis across tax brackets, so that the average percentage of income paid would not be skewed by the relative wealth of a state's population.

Separate rankings were generated based on each of the above criteria, and then these rankings were combined to create the rankings below.

States with the highest federal tax burdens

1. District of Columbia. Residents of the District ranked second in both per capita taxes paid ($8,820.13) and equally weighted tax rate (12.32 percent) for a combined rank of No. 1 overall.
2. Massachusetts. Despite ranking fourth in each individual category, the combination of the two was enough to earn Massachusetts the No. 2 slot overall.
3. Connecticut. As noted previously, this state ranks No. 1 overall in federal taxes paid per capita, and it placed eighth in the equally weighted tax rate category.
4. North Dakota. A state with growing wealth due to its natural resources, North Dakota residents paid the third highest federal tax rates and ranked seventh in the per capita category.
5. (tie) Alaska. Along with paying the highest average federal tax rate, Alaska also made the top 10 in per capita taxes.
5. (tie) New Jersey. Ranking fifth in taxes per capita and sixth in equally weighted tax rate earned New Jersey the fifth slot overall.
7. New York. While only 17th in equally weighted tax rate, New York's sixth ranking in per capita taxes pulled it up to seventh overall.
8. (tie) Illinois. Though it did not crack the top 10 in either individual category, Illinois was close enough in each case to land itself in an eighth-place tie overall.
8. (tie) Texas. Like Illinois, Texas was just outside the top 10 in both categories and so finished tied for eighth overall.
10. Pennsylvania. Thanks primarily to having the ninth-highest equally weighted tax rate, Pennsylvania makes it five Northeastern states in the top 10.

States with the lowest federal tax burdens

1. Arkansas. At $3,100.71, Arkansas pays the fourth-lowest in per capita taxes, and also has the fifth-lowest equally weighted tax rate (10.81 percent). The combination ranks it at the bottom in overall federal tax burden -- a low ranking the state's residents may well enjoy.
2. Idaho. At 10.64 percent, Idaho's equally-weighted tax rate is third-lowest in the nation, and its per capita federal taxes paid also rank in the bottom 10.
3. South Carolina. Fourth-lowest in taxes per capita, and ninth-lowest in equally weighted tax rate.
4. Mississippi. As noted previously, Mississippians pay the lowest federal taxes per capita, and their equally weighted tax rate is just outside the bottom 10.
5. Hawaii. Their per-capita taxes are above the bottom 10, but Hawaii residents pay the fourth-lowest equally weighted tax rate.
6. (tie) Utah. As noted in the introduction, residents of Utah pay the lowest equally weighted federal tax rate in the nation.
6. (tie) Oregon. Oregon has the fourth-lowest equally weighted tax rate, and their per capita tax bill is just above the bottom 10.
6. (tie) Kentucky. Kentucky makes this list primarily because of the third-lowest per capita tax bill.
9. North Carolina. Tenth in per capita taxes, and 12th in equally-weighted tax rate.
10. Montana. Eighth in equally-weighted tax rate, and 15th in per capita federal taxes.

Where do you stack up in total dollars and tax rate paid? If you are among the lowest tax payers, you can congratulate yourself on getting off (relatively) cheaply, whereas if you are among the highest, at least you can view yourself as an above-average contributor to the nation's efforts.

If you didn't see your state on the lists above, you can find out where it ranks on MoneyRates.com's full 50-state list.

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