If you are in a high-tax state, your employees will pay a lot in taxes, and the cost is passed on to you, their employer. You will need to pay them enough to pay 40% in taxes and have some money left for living expenses.
The flip side is of course:
If you are in a low-tax state, your employees (or you) will pay a lot for things like health care and retirement, and the cost is passed on to you, their employer. You will need to pay them enough to pay those costs and have some money left for living expenses.