You can see on the map above a number of states filled in with grey. These are states where no income tax is levied on residents. With the other states, the redder the state is, the higher its top income tax rate. You can see in the northeast a sea of red, with a tiny island of freedom in grey. That's New Hampshire. The tiny Live Free or Die state is once again ranked #1 on Your Survival Guy's 2025 Super States.
At the Tax Foundation, Andrey Yushkov and Katherine Loughead explain the current tax situation among the states:
Individual income taxes are a major source of state government revenue, accounting for 33 percent of state tax collections in fiscal year 2023, the latest year for which data are available. Their significance in public policy is further enhanced by individuals being actively responsible for filing their income taxes, in contrast to the indirect payment of sales and excise taxes.
Forty-two states levy individual income taxes. Forty-one tax wage and salary income. Washington only taxes capital gains income. Eight states, including New Hampshire, which repealed its interest and dividends tax in 2025, levy no individual income tax at all.
Of those states taxing wages, 14 have single-rate tax structures, with one rate applying to all taxable income. Conversely, 27 states and the District of Columbia levy graduated-rate income taxes, with the number of brackets varying widely by state. Currently, six states—Arkansas, Kansas, Massachusetts, Montana, North Dakota, and Ohio—have a two-bracket income tax system. At the other end of the spectrum, Hawaii has 12 brackets. Top marginal rates span from 2.5 percent in Arizona and North Dakota to 13.3 percent in California. (California also imposes a 1.1 percent payroll tax on wage income, bringing the all-in top rate to 14.4 percent as of 2024.)
In some states, a large number of brackets are clustered within a narrow income band. For example, Virginia’s taxpayers reach the state’s fourth and highest bracket at $17,000 in taxable income. In other states, the top rate kicks in at a much higher level of marginal income. For example, the top rate kicks in at or above $1 million in California (when the “millionaire’s tax” surcharge is included), Massachusetts, New Jersey, New York, and the District of Columbia.
Action Line: My latest Super States release begins "Your Survival Guy’s much anticipated 2025 Super States is in, and it comes down to this: Live Free or Flee? Which is why my favored “live free or die” New Hampshire is once again number one. When it comes to competition between states, New Hampshire is not only a beacon of freedom for New England, but really the entire Northeast." Don't miss it, click here to read Your Survival Guy's 2025 Super States.
