New Jersey Taxpayers Face One of the Nation’s Heaviest Burdens, Study Finds

the staff of the Ridgewood blog

Trenton NJ, as the 2025 tax season approaches, a new national report reveals that New Jersey taxpayers are among the most heavily burdened in the United States — with high property taxes contributing significantly to their financial strain.

The study, published by WalletHub on April 1, 2025, ranks each state by total tax burden, factoring in property taxes, individual income taxes, and sales and excise taxes as a percentage of personal income.

New Jersey Ranks Among the Top for High Tax Burdens

According to WalletHub’s latest analysis, New Jersey ranks No. 6 overall in the country for total tax burden. Here’s how it breaks down:

• Property Tax Burden: 4.67% (among the highest in the nation)

• Income Tax Burden: 2.87%

• Sales and Excise Tax Burden: 2.76%

• Total Tax Burden: 10.30%

This means that over 10% of New Jersey residents’ personal income goes directly toward state and local taxes, making it one of the costliest states to live in from a taxation standpoint.

Northeast Residents Hit Hard by Taxes

New Jersey isn’t alone in carrying a steep tax load. Several other Northeastern states ranked high on the list:

• New York: Ranked No. 2 overall, with a total tax burden of 13.56%, including the highest individual income tax burden nationwide at 5.76%.

• Maryland: No. 9 overall, with a 4.47% income tax burden, one of the highest in the U.S.

• Connecticut: No. 10 overall, with a 3.96% property tax burden and a total burden of 9.90%.

• Massachusetts: Ranked No. 13, with a total burden of 9.57%, led by its 4.05% income tax.

• Virginia: Ranked No. 23, with a moderate total tax burden of 8.86%.

• Pennsylvania: Came in at No. 30, with a total burden of 8.58%.

Hawaii and Alaska: Opposite Ends of the Spectrum

At the extremes, Hawaii topped the list as the state with the highest overall tax burden, largely due to its high sales and excise taxes. In contrast, Alaska ranked last with a total burden of just 4.93%, thanks to having no income tax or statewide sales tax.

High Tax Burden Adds to Cost-of-Living Pressures

WalletHub’s study arrives as Americans continue to grapple with rising inflation, housing costs, and economic uncertainty. For many, state tax policy is becoming a key consideration when deciding where to live, retire, or open a business.

Where Does Your State Rank?

To view the full list and see how your state compares, visit WalletHub’s 2025 Tax Burden by State Report.

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Key Takeaways:

• New Jersey ranks No. 6 nationally for total tax burden.

• Property taxes in New Jersey are among the highest in the U.S.

• The Northeast remains one of the most heavily taxed regions in the country.

• States like Alaska and Florida continue to attract residents with lower tax burdens.

 

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