California taxes among highest in the nation

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A new study by SeniorLiving calculating taxes for each state in the nation shows California ranks No. 51, paying the highest tax rate in the country. California residents pay 8.61% in state taxes compared to the national average of 5.41%.

“The conventional wisdom that Americans hate taxes may not be all together true,” the website www.SeniorLiving.org said. “A Pew Research Center survey found that most Americans believe paying all the taxes you owe is a crucial part of being a good American, just behind following the law and just ahead of voting.”

With the economy doing well, differences in state tax rates can save thousands of dollars for working families and millions for the wealthy.

SeniorLiving released its study, “Highest and Lowest Tax Rates in America,” Feb. 25, using the most recent data from the Tax Foundation, U.S. Census Bureau, Zillow, AAA and the American Petroleum Institute through 2019.

“Rankings were determined by measuring income tax, sales tax, property tax and gas tax in each state,” a press release announcing the report’s release from SeniorLiving said.

The five states paying the highest tax rate includes California, Minnesota, New York, Vermont and Kansas. The five states paying the lowest tax rate includes Alaska, New Hampshire, Montana, Delaware and Wyoming.

Key findings in California included the state ranking No. 51 for its overall combined tax rate of 8.61% and income tax rate of 8.65%. California ranked No. 14 for its effective property tax rate of 0.68%, No. 43 for its effective sales tax rate, 8.56% and No. 47 for its effective gas tax rate of 17.13%.

The study shows a large disparity – 7% – between Alaska which had the lowest combined median tax rate and California.

California’s combined rate of 8.61% is the nation’s highest, putting the Golden State more than a percentage point ahead of Minnesota. California has the highest median income tax rate, the 10th-highest state sales tax rate and the fifth-highest gas tax rate.

The study also showed that California is one of only two states – the other being Hawaii – that applies a double-digit state income tax rate on some wage earners. Single-filers in California earning more than $275,737 pay a marginal rate of 10.3%, while those bringing home seven figures or more pay a state income tax rate of 13.3%.

California’s gas tax at 17.13% was one of the highest in the nation, combined with the federal gas tax brings the total gas tax in the Golden State up to 61.2 cents per gallon. The lowest gas tax in the nation can be found in Alaska, where consumers pay just 14.66 cents per gallon.

In spite of being at the top of the list for high state income taxes, high gas taxes and high combined median tax rate, there was some good news for Californians. The state had one of the lowest property tax rates at 0.68% compared to New Jersey, which had the highest property tax rate at 2.48%.

To read the full report, visit www.seniorliving.org/lowest-tax-rate-states.

Kim Harris can be reached by email at valleyeditor@reedermedia.com.