Illinois Has Highest Tax Rates In U.S.: Study

The average U.S. household pays over $5,700 in taxes annually. Illinois households pay, well, more.

By Geoff Dempsey, Patch National Staff | Mar 13, 2018 9:46 am ET | Updated Mar 13, 2018 6:21 pm ET

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ILLINOIS — Illinois has the highest tax rates, according to a recent study by WalletHub. The median household pays over $500 more than the state with the second highest taxes, Connecticut.

The Prairie State came in 51st place in taxes among all U.S. states, plus Washington, D.C. Connecticut, Nebraska and New York follow Illinois as the highest taxed states, while Alaska, Delaware and Montana took the top three spots for lowest taxes.

WalletHub broke the study down into five categories defining taxation impacts (and Illinois' data in these categories):

• effective total state and local tax rates on median U.S. household: 14.89 percent
• annual state and local taxes on median U.S. household: $8,299
• percent difference between state and U.S. average: 38.34 percent
• annual state and local taxes on median state household: $8,330
• adjusted overall rank (based on cost of living index): 43

The study also found that red states generally impose lower taxes than blue states. Red states' average position on the ranking as 24.8, while blue states' average position was 27.71.

See the interactive map below:

Source: WalletHub

See WalletHub's research methodology here, pulled from their website:

1. Real-Estate Tax: We first divided the "Median Real-Estate Tax Amount Paid" by the "Median Home Price" in each state. We then applied the resulting rates to a house worth $184,700, the median value for a home in the U.S., in order to obtain the dollar amount paid as real-estate tax per household.
2. Vehicle Property Tax: We examined data for cities and counties collectively accounting for at least 50 percent of the state's population and extrapolated this to the state level using weighted averages based on population size. For each state, we assumed all residents own the same car: a Toyota Camry LE four-door sedan, 2017's highest-selling car, valued at $24,000, as of March 2018.
3. Income Tax: We used the percentage of income (middle income rate) spent on income tax from WalletHub's Best States to Be Rich or Poor from a Tax Perspectivereport. "Income" refers to the mean third quintile U.S. income amount of $55,754.
4. Sales & Excise Tax: We used the percentage of income (middle income rate) spent on sales and excise taxes from WalletHub's Best States to Be Rich or Poor from a Tax Perspective report. "Income" refers to the mean third quintile U.S. income amount of $55,754.

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