15 States With the Highest Income Taxes in the US

Ali Hassan
9 min read

In This Article:

In this article, we will look at 15 states with the highest income taxes in the US. If you want to skip our detailed analysis, head straight to 5 States with the Highest Income Taxes in the US.

US Income Taxes: An Outlook

The beginning of 2024 brings new legislative changes to the US tax system. The new year has begun with significant income tax cuts for several states. Only two states including California and Michigan have increased their personal income tax rates to 14.40% and 4.25% from previous tax rates of 13.30% and 4.05%, respectively. Many states are working on reducing their taxes and have taken legislative measures to reduce their tax rates in the coming years gradually. There are already some states with no sales tax or income tax and many states are aiming to lower their income taxes, which is good news for Americans. Thirty-four states have made notable tax changes in 2024 taking effect on January 1, as per the Tax Foundation. With massive tax cuts across several states, the US is not among the countries with highest income tax rates in the world.

The US government generates most of its revenue from individual income taxes and corporate income taxes. As of December 31, 2023, the US government had collected a total revenue of $1.11 trillion for fiscal 2024, as per the US Treasury. The individual income taxes contributed 47.40% to the total revenue, while the corporate income taxes accounted for 13.54% of the total revenue. The Social Security and Medicare taxes accounted for another 34.06% of the revenue. In fiscal 2024 so far, the individual and corporate income taxes have a combined contribution of $675 billion, making up 61% of total revenue. In fiscal 2023, the US government gathered a total revenue of $4.44 trillion with a slight improvement compared to $4.19 trillion in 2015. If we consider the revenue against inflation, the total revenue has decreased. Moreover, the federal government spending in fiscal 2023 was $6.13 trillion, almost $1.69 trillion in deficit. 

The Internal Revenue Service (IRS) has made changes to nearly 60 tax provisions for tax year 2024. The changes of tax year 2024 will apply to income tax returns filed in 2025. For individual taxpayers, the top tax rate remains unchanged at 37% from 2023 with incomes higher than $609,350 and $731,200 for married couples filing jointly. Other rates for both individual taxpayers and married couples filing jointly are 35%, 32%, 24%, 22%, and 12%. The minimum income tax rate for an individual taxpayer is 10% with an income of $11,600 or less. The IRS has increased the standard deduction to $14,600 for 2024 for individual taxpayers and married individuals filing separately, an increase of $750 from 2023. For married couples filing jointly, the IRS has increased the standard deduction to $29,200 for 2024, a rise of $1,500 from tax year 2023. The heads of households have a standard deduction of $21,900 for tax year 2024, up by $1,100 in tax year 2023. The personal exemption remains unchanged at zero for the tax year 2024. Some states have made income tax changes and among them are 16 states with income tax cuts in 2024.

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