The States Where Residents Pay the Most in State and Local Taxes - Newsweek

New Yorkers already face some of the steepest housing bills in the U.S. and a significantly above-average cost of living, and recently released federal data reveals that the state’s residents also pay the most in taxes on a per capita basis.

According to Census Bureau figures for 2024, released in late July and analyzed by the Citizens Budget Commission (CBC)—a New York-based think tank and government watchdog—the Big Apple tops the list when it comes to total state and local taxes collected, while also spending the second most out of any state.

Taken together, the report said that this was impacting the state’s "ability to attract and retain residents and businesses."

CBC found that the $12,357 in combined taxes per capita was 71 percent higher than the national average, and over 20 percent above other states seen as "high-tax" like California and Connecticut, with averages of $10,160 and $9,795, respectively.

As well as being first overall on a per capita basis, according to CBC, New York was first in personal income and corporate income taxes, third in property tax, sixth in sales tax and 13th in other taxes.

New York also ranked second only to Alaska when it came to spending—$17,399 per capita annually sitting 44 percent above the nationwide average of $12,086. CBC said that if the state had spent similar to New Jersey or Texas on a per capita basis, it would have saved $99 billion or $143 billion, respectively.

"New York’s fiscal position presents a clear competitiveness challenge. Raising taxes that are already among the highest in the nation is unlikely to make the state more attractive to residents or employers," CBC writes in its report. "Instead, further tax increases could add to the already high cost of living and doing business, weakening New York’s appeal relative to other states."

Though described as a "nonpartisan, nonprofit civic think tank and watchdog," CBC has in the past advocated for controlled spending and fiscal sustainability and expressed skepticism at policies and programs seen as straying from these priorities.

And beyond a lack of fiscal discipline, there are important caveats when critiquing New York’s outsized spending. These include its dense and urban population—more demanding on a budget than largely rural-based residents—the state’s higher relative labor costs, and the fact that New York has historically operated one of the most generous Medicaid programs in the U.S.

"New York Medicaid goes above and beyond. It covers services like personal care and non-emergency medical transportation, not typically included in other state programs, ensuring residents receive comprehensive care," according to a 2024 report from the health care-services firm RevCare, which placed New York second on its list of "States With the Best Medicaid Benefits."

Polling shows that voters are considering a candidate’s position on taxes when casting their votes, but that this is less of a priority than other economic matters like inflation and the cost of living.

In polling from Pew Research Center conducted July 6 to July 12, taxes were among the key issues voters wanted candidates running in their district to discuss during campaigns. With 4 percent choosing it as their number one issue, this put it on the same level as Donald Trump and Foreign policy, but behind the cost of living (15 percent), the general economy (7 percent), government ethics and reform (9 percent) immigration (7 percent) and health care (5 percent).

Among rural voters, a KFF/AP survey conducted August 12-24 revealed that the cost of living was the top-ranked issue, with 69 percent saying this was "extremely important" for candidates to address. This was followed by health care costs (56 percent), fraud in government programs (54 precent), immigration (45 percent) and the war with Iran (42 percent).

To some respondents, however, taxes formed part of the wider cost of living focus.

"I think prices are too high right now. Also, the government takes way, way too much in taxes, leaving people too little to live on," one rural Ohio voter told pollsters. "We have to live within our means and balance our finances…Almost all of the politicians are hypocrites."