Illinois Ranked as the Worst State to be Poor In, MI in Top 10
It's not a hot take to say being poor sucks. I grew up poor in the south - 0/10, would not recommend. Thankfully I aged at just the proper rate to join the middle class when it's practically poor. Hooray for inflation.
All sarcasm aside, more than 60% of Americans live paycheck to paycheck, including many people making more than $100,000 per year. When your paychecks are made significantly smaller by high taxes, the burden of being poor is amplified in a way that is difficult to overcome. Some cities and states have higher costs of living on top of that. Naturally, that makes it worse to be poor in some places than others.
Take Michigan for example. Michigan has a rather low cost of living, ranking 10th in the nation. According to a study by WalletHub, the Mitten State is the 9th-best state to be poor in. Considering the average salary in Michigan is $10,000 less than the national average, having a low cost of living helps Michiganders quite a bit. Low-income earners in Michigan are only taxed at 8.1%, correlating with the ranking given by WalletHub.
The same can't be said for Illinois where tax rates rank near the top for lower, middle and higher income earners. But for those who would be considered poor in Illinois, a tax rate of 13.95% is brutal. It's not quite so bad for many in the state since the state ranks 17th for cost of living. But location is everything.
More than half of Illinois's population lives in the Chicago metropolitan area, and Chicago is easily one of the most expensive places to live in America.
Still, that 13.95% tax rate is the highest in the country, making Illinois the worst state to be poor in. Illinois also ranks 49th for medium-income tax rates at 12.57% and 45th for high-income tax rates at 10.93%.
It doesn't get much better in Indiana, which ranked as the 46th worst state to be poor in with an 11.78% tax on low-income earners. Ohio is pretty rough on poor Buckeyes too with an 11.22% tax on low-income earners ranking 35th in the nation.
To see how every state taxes different brackets of income check out WalletHub's complete study here.
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