Flat Income Tax States Increase to 14 in 2025, Oregon Hits Middle Class Hardest

A worker earning $50,000 a year in the U.S. could face starkly different state income tax bills, ranging from under $50 in North Dakota to about $4,000 in Oregon, illustrating significant disparities based on location. This variation is partly due to a growing shift toward flat tax systems, with 14 states expected to have flat income taxes by 2025, up from eight in 2019; Louisiana and Iowa are the newest adopters. Oregon has the highest income tax rate for the middle class at 8.75%, followed by California and Hawai‘i, both of which use progressive tax systems where no income is entirely tax-free. In contrast, North Dakota has the lowest rate for middle-income earners at 1.95%, with Arizona and Ohio also offering low rates. Of the low-rate states, only Arizona uses a flat tax, while North Dakota and Ohio offer progressive rates with some income taxed at 0%, benefiting median earners. These trends highlight the significant impact of state tax policies on middle-class workers' take-home pay.