Analysis: California, New York, D.C. have most progressive income taxes


California, Connecticut, New York, New Jersey and Washington, D.C., ranked among the U.S. jurisdictions with the most progressive individual income tax systems, according to a recent Tax Foundation analysis.

Thirty-three states and the District of Columbia have income tax systems with brackets for different levels of income, the Tax Foundation said, but California, Connecticut, New York, New Jersey and the District of Columbia were found to have at least six tax brackets, each with broad income ranges, and top marginal thresholds on income of between $500,000 and $1 million.

Arizona has five tax brackets, with the top income threshold reaching $155,159.

Among the states with income tax rates that increase with income level, the number of brackets and top rates vary substantially, the study found.

Four states – New York, Connecticut, Arkansas and Nebraska – require many of their top income earners to pay the top tax rate on all their income, not just their marginal income that exceeds a certain threshold, according to the Tax Foundation study.

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How Do States With Progressive Income Taxes Measure Up?

StateNumber of BracketsTop Income Threshold
Alabama3$3,000
Arizona 5$155,159
Arkansas (a) (b) 6$35,099
California (b)10$1,000,000
Connecticut 7$500,000
Delaware6$60,000
Georgia6$7,000
Hawaii12$200,000
Idaho (b)7$11,043
Iowa (b)9$71,910
Kansas3$30,000
Kentucky6$75,000
Louisiana3$50,000
Maine (b)3$50,000
Maryland8$250,000
Minnesota (b)4$160,020
Mississippi3$10,000
Missouri10$9,072
Montana (b)7$17,900
Nebraska (b)4$30,420
New Jersey6$500,000
New Mexico4$16,000
New York8$1,077,550
North Dakota (b)5$424,950
Ohio (b)7$213,350
Oklahoma6$7,200
Oregon (b)4$125,000
Rhode Island (b)3$149,150
South Carolina (b)5$14,650
Vermont (b)5$416,650
Virginia4$17,000
West Virginia5$60,000
Wisconsin (b)4$247,350
Washington, D.C.6$1,000,000

(a) Brackets apply to individuals earning more than $75,000. Two special rate schedules exist for low- and middle-income individuals: one for individuals below $21,000 in income (which has four brackets), and one for those between $21,000 and $75,000 in income (which has six brackets).  (b) Bracket levels are adjusted for inflation each year. 

Source: Tax Foundation; state tax forms and statutes; Bloomberg BNA

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