This post originally appeared in The Fiscal Times.
With the passage of the fiscal cliff deal and the expiration of the payroll tax holiday, most Americans will be paying more taxes this year – but the hike could hurt more depending on what state you live in.
What earned Maryland its place among the bottom dwellers? It’s the sixth worst state for individual income taxes, fifth worst for unemployment insurance and the 11th worst state for property taxes. Its one bright spot is its sales tax, where it ranked the 8th best state due to the minimal local sales taxes imposed. According to the report, the Northrop Grumman Corporation chose to move its headquarters out of Maryland and into Virginia, citing the better business tax climate there.
The Hawkeye State gets a black eye for being the second worst state for corporate taxes, with a 12 percent rate. It also ranks 37th in property taxes, 33rd in individual income taxes and 34th in unemployment insurance taxes.
Wisconsin is the fifth worst state for individual income tax rates and ranks 32nd in corporate and 33rd in property taxes. Wisconsin also imposes an Alternative Minimum Tax on individuals. According to the report, states that have mimicked the federal AMT have put themselves at a competitive disadvantage through needless tax complexity.
7. North Carolina
North Carolina is the seventh worst state overall, and is also the eighth worst for individual income tax rates and the forth worst for sales taxes. However, the state’s corporate taxes are decent (ranking 29th) and unemployment insurance taxes rank 5th in the nation.
Minnesota’s ranking takes a beating for its corporate tax rate, which is among the highest in the nation at 9.8 percent and is ranked 44th out of 50 states. Minnesota is also 44th in individual income taxes, 40th in unemployment insurance taxes and 35th in sales taxes. Minnesota not only has an Alternative Minimum Tax on individual incomes, but also has an AMT on corporations.
5. Rhode Island
This state has the dubious distinction of being the worst state for unemployment insurance taxes: It taxes employers in a variety of ways for unemployment insurance, with a number of different tax rates and extra surtaxes. Moreover, its 4.88 percent effective rate for property taxes is ranked 46th. The state also ranks 42nd for corporate taxes, with a 9 percent corporate rate. Rhode Island has the second-highest cigarette tax, which is $3.50 per pack of cigarettes.
Vermont gets slammed for high property taxes, which are the third worst in the nation with a 5.27 effective rate. The state’s high individual income tax rate (the top marginal individual income tax is 8.95 percent) and high corporate tax rates helped it earn its spot as the fourth worst tax state in the nation.