An analysis of U.S. state and local taxes by Forbes has designated New Jersey with the unlucky ranking of second worst U.S. state in tems of taxes.
The Garden State trailed only behind New York, with Pennsylvania, Connecticut, California, Wisconsin, Minnesota, Maryland, Rhode Island and Vermont rounding out the top 10.
The ranking was created by calculating the effective tax rate for single taxpayers earning a taxable income of $50,000, which is about average, and by using 2015 tax data provided by the Tax Foundation, an independent tax policy research organization based in Washington, D.C.
- NEW JERSEY:
- State and local tax burden: 12.30%
- Effective state tax rate ($50,000 taxable income): 2.54%
- Highest tax bracket: $500,000
- Rate at highest tax bracket: 8.97%
- Per Capita Income: $54,422
In New Jersey, the income tax rate is 2.54 percent, which Forbes then combined with local taxes to come up with a 12.3 percent state and local tax burden.
As NJ.com reporter Samantha Marcus points outs, "while the report doesn't specify which local taxes are included (some states have local income taxes or local sales taxes), presumably New Jersey's steep property taxes had a hand in the state's ranking."
"Last year, the average property tax bill here was $8,161, while nationally only 0.2 percent of U.S. homeowners paid more than $8,000," Marcus adds. "New Jersey's income taxes start at 1.4 percent on earnings less than $20,000 and the top marginal tax rate hits 8.97 percent on income over $500,000."
Click here to read Forbes' full state-by-state analysis.