An interesting article I found this morning:
The least tax-friendly state in Americahttp://www.aol.com/article/2016/06/24/the-worst-state-to-live-in-for-taxes/21401450/If there's one goal most Americans have in common, it's to pay less money in taxes. But while federal tax rates are a fairly straightforward calculation based on income, state taxes are a whole different story. Unlike federal taxes, state taxes are by no means uniform, which means where you live could have a significant impact on how much money you wind up forking over to your pals at the IRS.
Tax rates by state
WalletHub recently did an in-depth tax burden analysis where it collected data on individual income taxes, property taxes, and sales and gross receipts taxes. It then combined that information to arrive at an ordered ranking of total tax burden by state.
The following table shows which states have the overall highest and lowest tax burdens, as measured by percentage of personal income: Follow the Link to see the Table, it doesn't copy and paste well.
The following are listed: Overall Rank, State, Total Tax Burden, Overall Ranking, Total Tax Burden
As you can see, New York ranks highest as the state with the largest tax burden overall, with Hawaii as a reasonably distant second. Alaska, meanwhile, imposes the lowest total tax burden among the 50 states.
Property taxes
Real estate taxes are a significant indicator of how affordable it is to live in a specific city, state, or region. You may have heard that living on the East Coast can get expensive because of property taxes, and the numbers certainly don't lie. New Jersey leads the pack in high real estate taxes, followed by New Hampshire, Vermont, Rhode Island, Maine, New York, and Connecticut. Interestingly, though Alaska has the lowest overall tax burden on residents, it ranks 11th in property taxes.
Here's a rundown of which states command the highest real estate taxes, as measured by percentage of total personal income: Follow the Link to see the Table, it doesn't copy and paste well.
Income taxes
Like real estate taxes, income taxes can also eat away at a chunk of your earnings. The following table shows which states charge the highest income taxes, as measured by percentage of total personal income: Follow the Link to see the Table, it doesn't copy and paste well.
You'll notice that seven states (Washington, Nevada, Texas, Wyoming, Florida, South Dakota, and Alaska) don't charge income tax at all, while others (New Hampshire and Tennessee) charge a minimal amount. New Yorkers, by contrast, lose an estimated 4.76% of their income to taxes.
Sales and gross receipts taxes
Sales and gross receipts taxes (taxes charged to businesses on gross revenues) make up the final piece of the tax puzzle. Though Hawaii technically has no sales tax, it's expensive to live there because residents pay what's known as a general excise tax for goods and services. By contrast, Delaware, Montana, Oregon, and New Hampshire are low on the list because they don't charge sales tax at all. Similarly, Alaska does not impose a state-level sales tax, though its municipalities are allowed to charge retail-level taxes.
Here's how the 50 states rank in terms of sales and gross receipts taxes, as measured by percentage of income: Again, follow the Link to see the Table, it doesn't copy and paste well.
Sales and Gross Receipts Tax Burden
Time to move?
If you happen to live in a state with a relatively high tax burden, you may be tempted to pack up and go elsewhere in the hopes of attaining a more financially comfortable lifestyle. But before you do, make sure moving doesn't result in a major salary cut. It's often the case that you'll earn more money in or around a major metro area than you will in a smaller city or town, even when taking a comparable position within your industry. For example, while the average salary for a lawyer in New York City is about $114,000, the average attorney in St. Paul earns roughly $94,000 according to Glassdoor. So, while New York's overall tax burden is 2.66% higher than Minnesota's, moving there won't necessarily save you money if your salary takes a $20,000 dip in the process.
Remember, too, that there are factors outside of taxes that contribute to overall cost of living. Housing prices, for example, are a huge measure of affordability not reflected in this particular set of data. Similarly, public transportation (or lack thereof) and toll roads can play a role in determining how costly it is to live somewhere.
That said, as long as you've done your research, it might pay to pick up and move to another state if you feel yours is too expensive. After all, you've got 50 to choose from!
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OK, where'd you end up. Satisfied?
All things being equal (considering this information), I like being where I am for Tax purposes. Could my (your) situation be better, no doubt but, no state can support itself without some form of income. Choose carefully. I do wish the information contained at the link also compared un-employment rates and retirement information. But, I'm not feeling the need to do that much research this morning. Want to move? Of course there are other factors to consider, geography, weather, relatives you want be near or far from, etc..........
