Personal State Income Tax Rates

On Monday of this week, March 16, 2026, there was an article in the Wall Street Journal titled, “Red-Blue State Gap on Income Tax Gets Even Wider.”

The gist of this article was that Red States (Republican), were moving to flatten, cut or eliminate, individual state income taxes. It stated that “since 2021, 23 states had lowered their income tax rate.

Blue States (Democratic) were moving in the opposite way. They were increasing individual state income taxes on top earners, “ in order to combat inequality, and plug expected Budget Deficits caused by Republicans.”

In Missouri, Republicans were expanding the sales tax, and transferring the tax burden of the state from wealthier households, to 80% of the residents of the state.

Some states were also adding a graduated tax on income greater than $500,000. They were also lowering the tax on income lower than $500,000.

The article only dealt with personal state income taxes. What affect do other taxes, like property or sales tax have?

In my mind, this is nothing but a shell game. In the early 1970’s, I was living in Connecticut, and a new job required my family, and I, to move to North Carolina.

At that time, Connecticut had no personal state income tax. To fund the state government they relied on sales tax, property taxes, corporate income taxes and selective personal investment income taxes.

North Carolina did have a state personal income tax. They also had a property tax, a sales tax and a corporate income tax.

What was interesting, my total taxes amounted to almost the same. My property taxes, on a comparable basis, were lower in North Carolina. However, I now had a state income tax that I didn’t have in Connecticut. When I added that to my property taxes, I was paying almost the same in both states.

In 1991, Connecticut enacted a comprehensive state income tax rate to compensate for a growing Budget Deficit.

Realistically, I have always considered the cost to operate a state’s finances, relative to their population. I have only lived in 4 states, but I found that the total tax burden was approximately the same, no matter where I resided.

Income taxes varied from state to state, as did property taxes, and sales tax. In total the burden was approximately the same.

There are a number of states today that still don’t have a personal income tax. They are unique, and have other means of financing their government.

As an example, Alaska has significant income from oil drilling. Florida relies on tourism and sales tax. Nevada relies on gaming and tourism. Wyoming relies on mineral and energy taxes. South Dakota relies on sales and property taxes.

I should also mention, that in 1970, the top Federal Income Tax Rate was 70% on income greater than $100,000. That $100,000 equates to $800,000 today.

In 1970 there were significant tax shelters, and deductions, that don’t exist today. Today’s top Federal Income Tax rate is 37% on income over $751,600.

Obviously today, each individuals tax burden is greater than just their personal state income tax rate. All taxes need to be considered.

Jess Sweely

Madison, VA.

March 18, 2026