Vermont Business Magazine In a survey of state taxes, national personal financial adviser SmartAsset modeled income, property and estate tax payments for wealthy households to find the states where "it costs the most to be rich," and Vermont ranks in the number two spot. The rankings largely tracked the Blue State (Democratic) versus Red State (Republican) politics. It generally also followed wealthier per capita states versus poorer states on a per capita basis, with a few outliers. Vermont, for instance, is above average for income but high for taxes; Colorado is also above average in income, but lower in taxes; while Red States Nebraska and Kansas are below average in income and relatively high on the SmartAsset list.
Vermont comes with high taxes in all three of the metrics we analyzed. Vermont’s property taxes rank among the highest in the nation, and it has the seventh-highest top marginal tax rate in the country. Another problem for extremely wealthy individuals is the flat Vermont estate tax rate. Any estate worth more than $2.75 million is exposed to a tax rate of 16%.
In 2016 the IRS reported that it collected nearly $18.3 billion in estate taxes, from more than 5,200 estates. That is an average tax of $3.5 million per taxable estate. While the estate tax is a punishing one-off payment, the wealthy can also see their annual tax burden pile up due to income and property taxes. The size of the tax burden varies wildly by state however,making it advantageous for the wealthy to live in one state over another. For example, some states have higher income taxes or higher estate taxes.
Vermont, meanwhile, is seeing recent wage growth, according to the Bureau of Economic Analysis. Vermont ranked tied for fifth with wage growth of 5.5 percent from 4Q2017 to 1Q2018.
States ranked by per capita income
All data is from the 2010-2014 American Community Survey 1-Year Estimates.
| Rank | State | Per capita income |
Median household income |
Median family income |
Population | Number of households |
Number of families |
|---|---|---|---|---|---|---|---|
| District of Columbia† | $45,877 | $71,648 | $84,094 | 658,893 | 277,378 | 117,864 | |
| 1 | Connecticut | $39,373 | $70,048 | $88,819 | 3,596,677 | 1,355,817 | 887,263 |
| 2 | New Jersey | $37,288 | $69,160 | $87,951 | 8,938,175 | 2,549,336 | 1,610,581 |
| 3 | Massachusetts | $36,593 | $71,919 | $88,419 | 6,938,608 | 3,194,844 | 2,203,675 |
| 4 | Maryland | $36,338 | $73,971 | $89,678 | 5,976,407 | 2,165,438 | 1,445,972 |
| 5 | New Hampshire | $34,691 | $66,532 | $80,581 | 1,326,813 | 519,756 | 345,901 |
| 6 | Virginia | $34,052 | $64,902 | $78,290 | 8,326,289 | 3,083,820 | 2,058,820 |
| 7 | New York | $33,095 | $58,878 | $71,115 | 19,746,227 | 7,282,398 | 4,621,954 |
| 8 | North Dakota | $33,071 | $59,029 | $75,221 | 739,482 | 305,431 | 187,800 |
| 9 | Alaska | $33,062 | $71,583 | $82,307 | 736,732 | 249,659 | 165,015 |
| 10 | Minnesota | $32,638 | $61,481 | $77,941 | 5,457,173 | 2,129,195 | 1,369,594 |
| 11 | Colorado | $32,357 | $61,303 | $75,405 | 5,355,866 | 2,039,592 | 1,315,283 |
| 12 | Washington | $31,841 | $61,366 | $74,193 | 7,061,530 | 2,679,601 | 1,725,099 |
| 13 | Rhode Island | $30,830 | $54,891 | $71,212 | 1,055,173 | 409,654 | 257,165 |
| 14 | Delaware | $30,488 | $59,716 | $72,594 | 935,614 | 349,743 | 233,000 |
| 15 | California | $30,441 | $61,933 | $71,015 | 38,802,500 | 12,758,648 | 8,762,059 |
| 16 | Illinois | $30,417 | $57,444 | $71,796 | 12,880,580 | 4,772,421 | 3,099,184 |
| 17 | Hawaii | $29,736 | $69,592 | $79,187 | 1,419,561 | 450,769 | 314,151 |
| 18 | Wyoming | $29,698 | $57,055 | $72,460 | 584,153 | 232,594 | 149,032 |
| 19 | Pennsylvania | $29,220 | $53,234 | $67,876 | 12,787,209 | 4,945,972 | 3,185,054 |
| 20 | Vermont | $29,178 | $54,166 | $67,154 | 626,562 | 257,229 | 162,017 |
| United States | $28,889 | $53,657 | $65,910 | 318,857,056 | 117,259,427 | 77,152,072 | |
| 21 | Iowa | $28,361 | $53,712 | $67,771 | 3,107,126 | 1,241,471 | 801,562 |
| 22 | Wisconsin | $28,213 | $52,622 | $67,187 | 5,757,564 | 2,307,685 | 1,485,877 |
| 23 | Maine | $27,978 | $49,462 | $62,078 | 1,330,089 | 549,841 | 344,585 |
| 24 | Kansas | $27,870 | $52,504 | $66,425 | 2,904,021 | 1,109,280 | 728,602 |
| 25 | Oregon | $27,646 | $51,075 | $62,670 | 3,970,239 | 1,535,511 | 966,250 |
| 26 | Nebraska | $27,446 | $52,686 | $66,120 | 1,881,503 | 740,765 | 480,317 |
| 27 | Texas | $27,125 | $53,035 | $62,830 | 26,956,958 | 9,277,197 | 6,407,165 |
| 28 | South Dakota | $26,959 | $50,979 | $66,936 | 853,175 | 334,475 | 211,235 |
| 29 | Ohio | $26,937 | $49,308 | $62,300 | 11,594,163 | 4,593,172 | 2,923,523 |
| 30 | Michigan | $26,613 | $49,847 | $62,143 | 9,909,877 | 3,834,574 | 2,485,159 |
| 31 | Florida | $26,582 | $47,463 | $57,212 | 19,893,297 | 7,328,046 | 4,693,411 |
| 32 | Missouri | $26,126 | $48,363 | $61,299 | 6,063,589 | 2,354,809 | 1,508,816 |
| 33 | Montana | $25,989 | $46,328 | $60,643 | 1,023,579 | 410,962 | 251,176 |
| 34 | North Carolina | $25,774 | $46,556 | $57,380 | 9,943,964 | 3,790,620 | 2,492,048 |
| 35 | Nevada | $25,773 | $51,450 | $60,824 | 2,839,099 | 1,021,519 | 642,461 |
| 36 | Arizona | $25,715 | $50,068 | $59,700 | 6,731,484 | 2,428,743 | 1,579,481 |
| 37 | Georgia | $25,615 | $49,321 | $58,885 | 10,097,343 | 3,587,521 | 2,426,392 |
| 38 | Oklahoma | $25,229 | $47,529 | $58,710 | 3,878,051 | 1,459,759 | 966,516 |
| 39 | Indiana | $25,140 | $49,446 | $60,780 | 6,596,855 | 2,502,739 | 1,657,223 |
| 40 | Tennessee | $24,922 | $44,361 | $55,557 | 6,549,352 | 2,509,665 | 1,660,344 |
| 41 | Utah | $24,877 | $60,922 | $69,535 | 2,942,902 | 918,370 | 691,495 |
| 42 | Louisiana | $24,800 | $44,555 | $56,573 | 4,649,676 | 1,718,194 | 1,112,659 |
| 43 | South Carolina | $24,596 | $45,238 | $56,491 | 4,832,482 | 1,826,914 | 1,201,616 |
| 44 | Idaho | $23,938 | $47,861 | $58,101 | 1,634,464 | 591,587 | 407,499 |
| 45 | Kentucky | $23,684 | $42,958 | $54,776 | 4,413,457 | 1,712,094 | 1,124,586 |
| 46 | New Mexico | $23,683 | $44,803 | $54,705 | 2,085,572 | 760,916 | 489,532 |
| 47 | Alabama | $23,606 | $42,830 | $53,764 | 4,849,377 | 1,841,217 | 1,232,515 |
| 48 | Arkansas | $22,883 | $41,262 | $51,528 | 2,966,369 | 1,131,288 | 752,212 |
| 49 | West Virginia | $22,714 | $41,059 | $52,413 | 1,850,326 | 735,375 | 472,869 |
| 50 | Mississippi | $21,036 | $39,680 | $50,178 | 2,994,079 | 1,095,823 | 738,463 |
| Puerto Rico† | $11,241 | $18,928 | $22,477 | 3,548,397 | 1,233,490 | 867,505 |
Source: US BEA. US CENSUS. SmartAsset. 8.14.2018 https://smartasset.com/financial-advisor/states-where-it-costs-the-most-to-be-rich.