3. California
The Golden State isn't so golden when it comes to taxes. It's the second worst in individual income taxes and sixth worst in corporate taxes. It earns the 40th spot for sales taxes. In 2005, California-based Intel even decided to build a multi-billion dollar chip-making facility in Arizona due to its favorable corporate income tax system. To make matters worse, in November, California voters passed Proposition 30, preventing planned cuts to education spending by raising the state sales tax from 7.25 percent to 7.5 percent for four years and adding four new income tax brackets to the existing seven. A new top income tax rate of 13.3 percent (up from the current 10.3 percent) is effective for seven years, but retroactive to January 1, 2012.
