Income levels differ across the country, so depending on where you live, it may not make sense to compare yourself to the national average. Instead, it’s more helpful to see where you fall compared to other individuals in your state. To facilitate this, I generated geographical heat maps using data compiled by 24/7 Wall St. from the 2018 IRS Statistics of Income program, the 2016 U.S. Census Bureau’s Survey of Government Finances, and the Tax Foundation. There is also a table at the end with the values for each state. For those interested in the national averages of income and net worth, see this infographic.
Average Pre-Tax Income
This map shows the average pre-tax income by state with a scale from red to green from lowest income to highest income. As you can see, the states with the highest pre-tax incomes are clustered in the Northeast, plus California, Washington, Wyoming, and Alaska. The states with the lowest pre-tax incomes are primarily in the Sun Belt, plus West Virginia, Kentucky, and Idaho.
Average After-Tax Income
This map of average after-tax income by state looks fairly similar to the previous map of pre-tax income. Again, the states with the highest after-tax incomes are in the Northeast, plus California, Washington, Wyoming, and Alaska (although in a different order this time). Connecticut deserves special mention as the state with the highest average after-tax income by far. The states with the lowest after-tax incomes are again mainly in the Sun Belt, with the addition of more states in the Midwest plus Delaware and Idaho.
Average Effective Tax Rate
We can use the before- and after-tax income data to determine which states have the lowest effective tax rates. An effective tax rate is the total of federal, state, and local income taxes. The above map depicts this information using a scale of green to red with green representing lower effective tax rates and red representing higher effective tax rates. As you can see, the majority of the country (56%) has an average effective tax rate below 20%, with the lowest effective tax rate of 13.4% in Alaska. Interestingly, 90% of the country has an average effective tax rate below 25%. Only two states have an average effective tax rate over 30%: Minnesota and Delaware. The other three states over 25% are Massachusetts, New York, and Ohio.
Table of State-by-State Values
|State||Average Pre-Tax Income||Average After-Tax Income||Average Effective Tax Rate|