Cities With the Highest Tax Rates (and the Lowest)

From property and auto taxes to sales and local income tax, sometimes it feels like the money we earn isn’t as much as we expected. (And of course, all this comes atop the federal taxes paid annually to the IRS.) To find out more about the situation with these taxes across some of our biggest urban areas, Cheapism reviewed Intuit TurboTax’s reports on the cities with the lowest and cities with the highest overall tax rates.

Related: These States Still Tax Groceries

Delaware might not have sales tax, but that doesn’t necessarily make it a tax-friendly place to live, especially for residents of Wilmington. In 2012, the city had the highest tax rates of the year; as of 2021, that meant an average overall tax rate of 13.5% for families earning $150,000. The high rates are attributable to higher home values in the area.

Related: The States With the Highest (and Lowest) Gas Taxes

With much of the city urbanized and lower-valued homes, many people don’t think of Detroit as a place that would have higher taxes, but Michigan’s flat income tax rate structure affects lower-earning taxpayers, and families earning just $25,000 pay an overall tax rate of about 13.7%. The Motor City’s property taxes are also among the highest in the country, at 3%. 

Related: It's Still Better to Buy Than Rent in These Cities

Similar to Detroit, residents of Louisville fall subject to their state’s flat income tax rate structure, placing much of the tax burden on citizens with lower incomes. With some of the highest property taxes in the nation, the overall tax rate in Louisville is 13.7% for families earning $150,000.

Property values in Portland reached new heights in 2021 after the city’s homes were revalued for the first time in 15 years.While the city has an income tax rate structure that favors low-income residents, the holistic burden of the city is affected by the 15% overall tax rate assessed to those earning higher incomes.

Lower-income households would have a more favorable outlook for taxes in Providence if overall rates weren’t raised by extremely high automobile taxes and fees. For families earning $150,000 or more, the overall tax rate is about 15.4%.

Although lower-income residents in Columbus benefit from lower tax rates than half of the country, citizens earning higher incomes are not as fortunate. Not to mention the property taxes in Columbus were the highest of any city in 2012, at 3.57%.

Taxpayers earning a lower income benefit from a progressive tax structure in Maryland. When comparing families earning $25,000 to those earning $150,000, the difference in rates in Baltimore has been as much as 5%. Altogether, higher-income families pay about 16.5% for their tax rate in the city.

Thanks to Milwaukee’s abnormally narrow revenue portfolio, property taxes in the city are sky-high despite a total revenue much lower than other cities of the same size. While the property taxes are some of the highest in the nation at 3%, the overall tax rate for higher-income families lands around 17.5%.

Philly has the highest wage taxes in the nation. But what hits the city even harder is the flat tax rate structure, which applies the same percentage to all taxpayers and properties — someone earning minimum wage is responsible for the same wage tax as someone making $100 an hour. Pennsylvania also has a 3.07% state income tax that puts an especially heavy burden on lower-income families. Overall, families earning $100,000 face a rate of about 20.9%.

It’s one of the wealthiest cities in the country, with about 20% of families earning $200,000, but Bridgeport is also the city with the highest tax rates. Boosted by high property and auto taxes, the overall rate in Bridgeport lands at 22% for families earning $150,000.

You might end up blowing a lot of money at the casino in Sin City, but residents don’t have to go broke from high tax rates. Nevada is one of nine states that does not assess state income tax, and it has some of the lowest property taxes in the nation. The average tax rate for resident families earning $150,000 is just 5.6% while lower-income families face a steeper 10.5% average rate.

The high property tax in Manchester is offset by the lack of other taxes. The city has no sales or income tax, and New Hampshire doesn’t assess state income tax on wages. The rate sits at 9.1% for Manchester families earning $150,000.

Between no state income tax for South Dakota and no city taxes in Sioux Falls, the city boasts some of the lowest overall rates in the nation, despite higher sales tax. Families earning $150,000 can anticipate an overall tax rate of around 5.9%.

Due to sales tax being the main tax in Memphis, lower-earning residents pay a higher overall rate of about 11%; those with high incomes pay around 4.8%. These rates would be even higher, but there is no city tax in Memphis and no state income tax in Tennessee.

Property tax in Billings is notoriously low. Residents don’t pay sales tax to the city or state, and even though the gas taxes are above average, the overall tax rate is an average of about 7.4%.

Like most cities on this side of the list, Jacksonville residents benefit from no state income tax — and no city tax, to boot. Families earning $150,000 pay around 4.3% for their overall tax rate, while lower-income families are hit harder, at 11.8%.

Since there is no state or city income tax for residents of Fargo, most of the tax burden comes from property, sales, and auto taxes. But even those categories come in low: The overall average tax rate comes in at about 5.2%.

“Everything is bigger in Texas” — except Houston’s tax rates. The absence of state and city income taxes helps balance out higher rates for sales and property taxes, landing Houston at an average overall rate of just 5% for families earning $150,000.

Not only does Alaska not have state income or sales tax, the city of Anchorage doesn’t charge a local tax. Even the automobile taxes are low for residents, putting the overall average tax rate at a mere 3.4%.

Cheyenne snags the top spot for low taxes in the United States thanks to low rates across every category. While lower-income families pay an average of about 9.7%, higher earners enjoy the mega-low rate of 3.1%.

Related: Valuable Tax Breaks for Seniors