From the Star Ledger:
New Jerseyans already know it to be true, but a Forbes analysis of state-by-state tax burdens places the Garden State near the top of its “Worst States for Taxes” list.
New Jersey lands in second place, behind New York, in the comparison of state and local taxes.
Connecticut, California, Wisconsin, Minnesota, Maryland, Rhode Island, Vermont and Pennsylvania round out the top 10, according to the Forbes report.
The analysis compares local taxes and the effective tax rate for single people with $50,000 in reportable income, a figure Forbes said it based on the $53,046 median U.S. Household income from 2009 to 2013.
In New Jersey, which has one of the most progressive tax structures in the country, that income tax rate is 2.54 percent, which Forbes combined with local taxes to establish a 12.3 percent state and local tax burden.
While the report doesn’t specify which local taxes are included (some states have local income taxes or local sales taxes), presumably New Jersey’s steep property taxes had a hand in the state’s ranking. Last year, the average property tax bill here was $8,161, while nationally only 0.2 percent of U.S. homeowners paid more than $8,000.
New Jersey’s income taxes start at 1.4 percent on earnings less than $20,000 and the top marginal tax rate hits 8.97 percent on income over $500,000.