Every year, all working adults who are not dependents are required to report their income, expenses, and other necessary financial information to the Internal Revenue Service (IRS). If they don't do so they are subject to financial penalty or even incarceration, as they are required to file taxes at the state and federal level. Federal rates are set by the federal government and IRS while state tax rates are much different.

Each state's government is allowed to discuss, vote on, and set its tax rates, which also gives it the freedom to lower or raise those tax rates at any time. Most states use factors such as median income, the housing market, the price of goods, and more to decide where to set their tax rate. These tax rates affect the socioeconomic classes differently based on the amount of money they make. States like Illinois show the stark difference as they have the 8th highest tax rate in the country.

1240 WJIM AM logo
Get our free mobile app

When you think of Illinois, all things Chicago are the first things to come to mind and then followed by Abraham Lincoln. Illinois isn't known for much outside of these two things which makes me wonder how they could be so high on the state tax rate list. Well, things are heavily skewed by the city of Chicago and the surrounding suburbs, as they drive the housing market and median income higher. I don't think this is fair but the rules are the rules.

Illinois has a tax rate of 9.7%, which is good for the 8th highest in the country. Coming in at just under 10%, they are only behind New York, Hawaii, Vermont, Maine, California, Connecticut, and Minnesota. Those states are in order as New York has the highest with a state tax rate of 12%. There is one thing that Illinois residents can do to change this.

Other than electing new officials that will hear their complaints and make changes at the state level that will help their pockets there is only one other thing they can do is move to another state with lower rates. Well, I don't want to forget about Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming who all have 0% tax rates because they don't charge income taxes to their residents.

Property Taxes by State: The USA's Lowest and Highest

Finding the home of your dreams, settling down, and raising a family with a great yard and a white picket fence. Every fairy tale needs a villain, and the American Dream has property tax. WalletHub recently ranked the 50 and the District of Columbia to determine which state has the highest property tax in the United States. Let's start from the lowest and finish with America's highest state property tax.

Gallery Credit: Scott Clow

Have You Ever Thought About Never Paying Taxes Again?

Just what would you give up or do to never have to pay those pesky taxes again? Check to see if one of your ideas landed in our top 10 list!

Gallery Credit: JD Knight

Highest Gas Taxes By State in the U.S.

Here are the top 10 states for gas taxes.

More From 1240 WJIM AM