💰 Combined Federal and State Tax Rates For Largest States/Provinces:
| State/Province | Estimated Effective Income & Sales Tax | US$50K | US$100K | US$200K | Sales Tax |
|---|---|---|---|---|---|
| Quebec | 40.09% | 28.81% | 35.35% | 42.77% | 14.975% |
| Alberta | 30.34% | 24.77% | 28.84% | 35.71% | 5% |
| Ontario | 35.14% | 24.30% | 30.52% | 39.90% | 13% |
| British Columbia | 33.28% | 23.19% | 28.35% | 37.50% | 12% |
| Oregon | 27.66% | 22.60% | 29.72% | 33.92% | 0% |
| Illinois | 27.37% | 20.36% | 26.32% | 30.33% | 6.25% |
| New York | 26.36% | 19.97% | 26.44% | 30.92% | 4% |
| Virginia | 26.79% | 19.89% | 26.49% | 30.81% | 5.30% |
| Alabama | 25.91% | 19.85% | 26.30% | 29.40% | 4% |
| Maryland | 27.00% | 19.83% | 26.19% | 30.40% | 6% |
| Massachusetts | 27.08% | 19.80% | 26.49% | 30.23% | 6.25% |
| Georgia | 26.08% | 19.78% | 26.32% | 30.51% | 4% |
| Minnesota | 27.76% | 19.58% | 26.63% | 31.95% | 6.88% |
| Wisconsin | 26.21% | 19.48% | 25.82% | 30.53% | 5% |
| Michigan | 26.35% | 19.46% | 25.32% | 29.58% | 6% |
| Kentucky | 26.33% | 19.43% | 25.36% | 29.38% | 6% |
| Oklahoma | 25.73% | 19.22% | 25.75% | 29.89% | 4.50% |
| North Carolina | 25.60% | 19.03% | 25.42% | 29.66% | 4.75% |
| Colorado | 24.81% | 18.80% | 25.89% | 29.52% | 2.90% |
| Pennsylvania | 25.59% | 18.75% | 24.56% | 28.52% | 6% |
| Indiana | 25.95% | 18.67% | 24.51% | 28.48% | 7% |
| Missouri | 25.10% | 18.34% | 25.60% | 29.69% | 4.23% |
| South Carolina | 26.23% | 18.24% | 26.18% | 30.88% | 6% |
| California | 27.63% | 18.15% | 26.87% | 32.75% | 7.25% |
| New Jersey | 26.45% | 18.11% | 25.74% | 30.72% | 6.63% |
| Louisiana | 24.74% | 18.10% | 25.16% | 28.49% | 4.45% |
| Arizona | 24.29% | 17.45% | 23.64% | 27.76% | 5.60% |
| Ohio | 24.14% | 16.88% | 23.51% | 28.18% | 5.75% |
| Tennessee | 22.95% | 15.68% | 21.49% | 25.45% | 7% |
| Washington | 22.73% | 15.68% | 21.49% | 25.45% | 6.50% |
| Texas | 22.63% | 15.68% | 21.49% | 25.45% | 6.25% |
| Florida | 22.52% | 15.68% | 21.49% | 25.45% | 6% |
Canadian provinces lead in tax rates, with Quebec's estimated effective rate of 41%, significantly higher than Ontario's 36%, which ranks second.
🔑 Key Points:
- 🔹 Quebec & Ontario in Canada: Even with the highest tax rates, both provinces face substantial public debt, indicating the need for significant changes in provincial government spending to address fiscal challenges.
- 🔹 Florida and Texas in the U.S.:
- These states have the lowest combined income and sales tax rates at the federal and state level.
- No cities in Florida or Texas impose municipal income taxes, but some have additional sales taxes (none exceeding 2.5%).
- 🔹 Municipal Taxes:
- Canadian cities have no municipal income and sales taxes, and their property tax rates are generally lower than the U.S.
- Even after factoring in municipal taxes, Quebec, Ontario, and BC are expected to maintain their position as the highest-taxed regions in North America.
- Alberta would rank lower than some areas in New York or California once municipal taxes are included.
- 🔹 Canada vs. U.S.:
- Canadians benefit from public healthcare plans and a stronger social safety net.
- The U.S. allocates significantly more to military spending.
- The U.S. government can sustain larger deficits due to the USD’s status as a global reserve.
📊 Methodology:
- 🔹 We selected all states and provinces with populations over 4 million; 28 U.S. states and 4 Canadian provinces meet this criterion.
- 🔹 We calculated combined federal and provincial/state income taxes for various income levels: $25k, $50k, $100k, $200k, and $400k (all in USD).
- 🔹 Estimated effective tax rate is calculated by applying weight to each of the above income tax rates to reflect the total revenue contribution of each income category (Income x Share of Population):
- $25k: 13.69%
- $50k: 24.76%
- $100k: 31.10%
- $200k: 23.17%
- $400k: 7.29%
- Sales tax: 0.4196
- 🔹 Final formula: $25k (Rate) x 0.1369 + $50k (Rate) x 0.2476 + $100k (Rate) x 0.3110 + $200k (Rate) x 0.2317 + $400k (Rate) x 0.0729 + 0.4196 (Sales Tax Rate)
This approach provides an estimated effective tax burden across regions, accounting for both income and sales taxes.
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Disclaimer:
- Any analysis or commentary reflects the opinions of WOWA.ca analysts and should not be considered financial advice. Please consult a licensed professional before making any decisions.
- The calculators and content on this page are for general information only. WOWA does not guarantee the accuracy and is not responsible for any consequences of using the calculator.
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- Interest rates are sourced from financial institutions' websites or provided to us directly. Real estate data is sourced from the Canadian Real Estate Association (CREA) and regional boards' websites and documents.