Delaware
Our ranking: Most tax-friendly
State income tax: 2.2% (on taxable income from $2,001 to $5,000) — 6.6% (on taxable income above $60,000)
Average state and local sales taxes: 7.52%
Gas taxes and fees: 23 cents per gallon
The First State is a standout among its East Coast neighbors, with no sales tax and low property taxes. Income taxes escalate quickly, though, with the top rate of 6.6% hitting taxable income over $60,000 (for both single and joint filers), and the capital city of Wilmington imposing its own wage tax.
Little Delaware pulls off this low-tax trick by being a very friendly place for businesses to incorporate, and then collecting fees and taxes from these absentee businesses, whose real operations are elsewhere.
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