Americans for Tax Reform has released a document, entitled "What Will Your State’s Top Income Tax Rate Be?" When the 2001 and 2003 tax cuts expire at the end of 2010, marginal tax rates will spike back up to 39.6%. This means that top marginal rates will rise everywhere; when integrated with state taxes, the marginal rates are even higher.
This document describes what each state’s top rate will be after the tax cuts expire, and ranks them from best to worst. (9 states have no state income tax and are tied for first place with 39.6%; Oregon is 51st, with a top integrated marginal tax rate of 46.24%.)
Click here to see a PDF of the document.
| State | Top Rate | Rank |
| Alabama | 42.62% | 18 |
| Alaska | 39.6% | 1 |
| Arizona | 42.34% | 14 |
| Arkansas |
43.83% |
36 |
| California | 45.97% | 48 |
| Colorado | 42.40% | 15 |
| Connecticut | 43.53% | 31 |
| Delaware | 43.80% | 35 |
| District of Columbia | 44.73% | 42 |
| Florida | 39.6% | 1 |
| Georgia | 43.22% | 25 |
| Hawaii | 46.24% | 50 |
| Idaho | 44.31% | 40 |
| Illinois | 41.41% | 10 |
| Indiana | 41.65% | 12 |
| Iowa | 45.02% | 45 |
| Kansas | 43.50% | 30 |
| Kentucky | 43.22% | 25 |
| Louisiana | 43.22% | 25 |
| Maine | 44.73% | 42 |
| Maryland | 43.38% | 29 |
| Massachusetts | 42.80% | 21 |
| Michigan | 42.23% | 13 |
| Minnesota | 44.34% | 41 |
| Mississippi | 42.62% | 18 |
| Missouri | 43.22% | 25 |
| Montana | 43.77% | 34 |
| Nebraska | 43.73% | 33 |
| Nevada | 39.6% | 1 |
| New Hampshire | 39.6% | 1 |
| New Jersey | 46.09% | 49 |
| New Mexico | 42.56% | 17 |
| New York | 45.02% | 44 |
| North Carolina | 44.28% | 38 |
| North Dakota | 42.54% | 16 |
| Ohio | 43.18% | 24 |
| Oklahoma | 42.92% | 22 |
| Oregon | 46.24% | 51 |
| Pennsylvania | 41.45% | 11 |
| Rhode Island | 45.58% | 47 |
| South Carolina | 43.82% | 36 |
| South Dakota | 39.6% | 1 |
| Tennessee | 39.6% | 1 |
| Texas | 39.6% | 1 |
| Utah | 42.62% | 18 |
| Vermont | 45.28% | 46 |
| Virginia | 43.07% | 23 |
| Washington | 39.6% | 1 |
| West Virginia | 43.53% | 31 |
| Wisconsin | 44.28% | 38 |
| Wyoming | 39.6% | 1 |
Methodology: because you can deduct a portion of your state taxes to your federal taxes, the numbers aren’t as simple as adding the percentages of the state and federal rates. Rather, the formula looks like this: (FT+(ST-(FT*ST))). (FT=federal taxes, ST=state taxes.) As shown, the deduction is equal to the two taxes multiplied, so the integrated tax is slightly lower than it would be if you simply add the two. The top federal rate is 39.6%, and other rates are available online.