Kansas, for example, is one of several states imposing a three-bracket income tax system. At the other end of the spectrum, Hawaii has 12 brackets. Top marginal rates range from North Dakota’s 2.9 percent to California’s 13.3 percent. Maine generally imposes an income tax on all individuals that have Maine-source income. The income tax rates are graduated, with rates ranging from 5.8% to 7.15% for tax years beginning after 2015.

In New Mexico, Arizona, Alabama, and Alaska, sales and excise taxes account for approximately 50 percent of all revenues. Tennessee currently levies a limited personal income tax that state income tax rates only applies to interest and dividend income, but it will be eliminated by 2021. A progressive graduated income tax is a characteristic of the least regressive state tax systems.

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It finds that nearly every state fails the basic test of tax fairness, taking a much greater share of income from low- and middle-income families than from wealthy families. This, of course, has broad implications, not only for taxpayers’ after-tax income but also for the revenue states collect to fund basic programs and services. A flat tax will not result in low-income Iowans paying more. Low to moderate-income earners who qualify for the Federal Earned Income Tax Credit and other available tax credits will continue to receive a state tax refund when credits exceed state tax liability. Aside from the high-income tax rate, it also has a social security rate of 18%, bonus payments are charged at a rate of 6%, and capital gains tax is 25%. In the state capital of Springfield, 112% of property taxes go towards public pensions.

On the flip side, Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington state, and Wyoming don’t impose an income tax at all. It doesn't levy a tax on earned income, but it does tax interest and dividends at a flat 5%. Other states have a top tax rate, but not all states have the same number of income brackets leading up to the top rate. For example, Hawaii has a top tax rate of 11% and 12 income brackets, while Iowa has a top tax rate of 8,53% and nine income brackets.

California

1827 to counteract the effects of Proposition 208 by automatically reducing the top marginal individual income tax rate by an amount that would keep the combined surtax and top rate from exceeding 4.5 percent. Of those states taxing wages, nine have single-rate tax structures, with one rate applying to alltaxable income. Conversely, 32 states and the District of Columbia levy graduated-rate income taxes, with the number of brackets varying widely by state.

Enacted via the Fiscal Year 2022 Budget Support Act of 2021, the District increased the number of tax brackets from six to seven and altered many of the thresholds. They are assessed a tax of $19,560 plus 9.25 percent of the excess over $250,000. Those with taxable income over $500,000 but not over $1 million will pay $42,775 plus 9.75 percent of the excess over $500,000. Finally, individuals with taxable income over $1 million will be taxed $91,525 plus 10.75 percent on any amount over $1 million. Arkansas’s top individual income tax rate declined from 5.9 percent to 5.5 percent as a result of legislation passed during the state’s December 2021 special session. Many states have multiple tax brackets, but Arkansas is unique in having entirely different tax rate schedules that vary according to income level.

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Maine has the third highest state tax burden in the USA. Hawaii may be a tourists paradise, but Hawaii has the second highest state tax burden in the USA.