The high cost of living in this state has been sliced and diced extensively, giving credence to reasons why working families find it increasingly difficult to maintain a middle-class lifestyle.
Recently, a Mass. Inc. study found Massachusetts to be the most expensive state for a middle-class standard of living.
It examined the high cost across different family structures, highlighting that rising living expenses have severely squeezed the traditional middle-class budget.
A household here would need to earn from $69,885 to $209,656 to be considered middle class.
Not that we need any more evidence of this state’s unaffordability, but nonetheless another metric has reinforced that pricey reputation.
It centers on another long-standing belief, one that’s even supplanted the state’s given name — Taxachusetts.
According to a report from FinanceBuzz, Massachusetts has the second-highest effective tax rate of any U.S. state.
That’s partly because the Bay State’s high median annual income ($76,732) puts many residents into higher federal tax brackets, according to Josh Koebert, a data scientist and researcher at FinanceBuzz, a respected personal finance website.
“As a result, Massachusetts residents owe more in federal taxes than residents of any other state,” Koebert said in the report.
The state’s total effective tax rate, 23.5%, includes both federal and state taxes. It breaks down into an 18.8% effective federal tax rate and a 4.7% effective state income tax rate.
An “effective” tax rate is the percentage of annual income paid in taxes, divided by income.
The personal finance site based its rankings on median income data from the U.S. Census Bureau and calculated state-level tax rates using state and federal tax codes for 2025.
No other New England state cracked the top 10 tax-burdened.
Only individual filers in Oregon pay a higher percentage of their income in taxes, according to FinanceBuzz.
The 10 U.S. states with the highest effective tax rates have a few things in common.
After Oregon and Massachusetts, Maryland, New York, New Jersey, Minnesota, Virginia, Illinois, Hawaii and Colorado round out the top 10.
Yes, they’re all considered blue states — the color that’s seen the greatest rates of resident loss over the past several years.
Conversely, the 10 states with the lowest tax burden also have some common traits.
Florida tops that least-taxed list with a 15.74 effective tax rate, followed by Nevada, Tennessee, South Dakota, Wyoming, Texas, North Dakota, Alaska, New Hampshire and Louisiana.
All but two of these states — purple Nevada and New Hampshire – fall into the red category.
Moreover just one — Louisiana — has a state income tax.
New Hampshire’s lack of both an income tax and sales tax has made it a primary destination for those forsaking Massachusetts for a more affordable place to live.
Economic health
While certainly a serious consideration, a tax-friendly environment shouldn’t be the sole reason for pulling up stakes.
There are other compelling issues that figure into that calculation.
Seemingly being taxed to the max didn’t stop Gov. Maura Healey last June from touting the state topping another personal finance website’s ranking for best economy.
Healey promoted WalletHub’s ranking as a “testament to the incredible businesses, universities and research institutions that drive our innovation economy, and to the top-notch talent that continues to choose Massachusetts as the place to grow their careers and their futures.”
The ranking compared the 50 states and the District of Columbia across 28 “key indicators of economic performance and strength.”
After taking into account those metrics, it gave each state a total score, which Massachusetts topped by a slim margin.
Physical health
In addition to fiscal health, Massachusetts apparently can claim to be one of the physically healthier states as well.
A study by WalletHub in 2023 ranked Massachusetts as the third lowest with respect to obesity.
The Bay State trailed only Colorado and Utah, which came in least and second least, respectively.
Massachusetts just edged out Hawaii to claim the third spot, with the District of Columbia and California the next two leanest. They were followed by Minnesota, Washington, Montana, Vermont and New York.
On the other end of the scale, West Virginia took the most obese prize, with Mississippi, Kentucky, Louisiana, Arkansas, Tennessee, Alabama, South Carolina and Delaware taking the next nine spots.
You can see a smattering of the highest-taxed states on the healthier list, and some of those lowest-taxed states featured in the overweight/obese grouping.
Bottom line, take all these variables into consideration before making a quality-of-life judgment.
Original article
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