The United States taxes shareholder dividends at a higher rate than most other Western countries, and state tax rates add on, making taxes on dividends some of the most costly to investors across the board.

The top federal rate on personal dividend income is 23.8 percent, according to a new study by The Tax Foundation. Because dividend income is treated like personal income, investors who live in states with high personal income taxes can surrender as much as one-third of dividend income in taxes.

Source: The Tax Foundation

By and large, states led by Democrats levy the highest taxes on personal dividends income. Of the 10 states that tax personal income at the highest rates, eight are traditionally blue states, while two — Iowa and Wisconsin — belong in the purple category.

California’s top marginal tax rate on personal dividends income is the highest in the country, 33 percent. Hawaii, Oregon, New York, Minnesota, New Jersey, Maryland and the District of Columbia all have a top marginal tax rate of more than 30 percent on dividends income.

In states with no income tax, the highest earners will still pay an effective marginal rate of 25 percent on dividends income, assuming they take itemized deductions. The tax code limits the value of those itemized deductions, boosting the 23.8 percent rate by about 1.2 percentage points, said Kyle Pomerleau, the author of the Tax Foundation study.

That costs high-income earners in the United States more money than those in most other countries that are members of the Organisation for Economic Cooperation and Development. The United States has the ninth-highest top marginal tax rate in the OECD, lower than Ireland, France, Canada and Britain, among others, but higher than the top rates in Germany and Japan.

With state rates, dividend income recipients in California, Hawaii, New York, Oregon and Minnesota pay more than tax payers in all but the five highest-taxing countries in the OECD.