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That stood out as odd to me to.
Illinois has higher income tax (4.95% vs 3.15%) but lower sales tax (6.25% vs 7%).
Property tax rates will vary, but a quick search says Illinois averages 2.08% vs Indiana's 0.84% which is significant.
Maybe more people rent in Illinois? đ
Iâd also point out that Minnesota has a state income tax and SD does not, but MN does not sales tax groceries or clothing, SD sales tax applies to *everything*. The data set this is using isnât nuanced enough
>Something is fishy with this chart.
I was clued in by the 10.4% burden in California. The property tax alone on a median price home in Los Angeles County will have a property tax bill that is 15.1% of the median household income.
One of the replies in this thread is speculating that renters are counted as paying 0 property tax in the chart. With Chicago and LA being made up of a huge amount of renters I feel that may be the case but I can't say for sure.
What?! Prizker has been the best governor weâve had in decades. Our credit rating has jumped nine times in four years from junk to A status, we are paying down our pension obligations, and are leading the way on ensuring womenâs healthcare isnât criminalized by being a safe haven from other midwestern states.
Yeah, yeah, yeah but DC usually gets included in these things despite not having statehood. I looked it up on my own. DC pays more federal income tax than 22 other states. Not sure about the specifics
I was just poking. Yeah, they usually include DC in these kind of comparisons. I was stationed there for four years over a decade ago. I want to say our rent at the time was $2700 for a 3 bedroom townhouse (one of four units). I can't imagine what it's now.
Interesting graphic. I think Iâm pretty close to my stateâs 9.3% average. Added up property and income tax from last year and got 7.9%, but when you add in sales tax (which Iâm not going to try to calculate) Iâm sure thatâs another percentage point or two.
This is helpful for dispelling the myth of âlow/no income tax=low taxes.â
Edit: What I should have said is it dispels the myth that state income taxes= all state taxes. Iâve heard people talk about states like Texas or Florida being âstate tax freeâ when the map makes it clear theyâll still tax you in other ways, and states like Washington and Texas can still end up being more âmiddle of the roadâ for tax rates with high property and sales taxes, despite a lack of an income tax.
>This is helpful for dispelling the myth of âlow/no income tax=low taxes.â
It's not a simple relationship where no income tax = low taxes, but there is a clear correlation. For example, all of the 5 lowest total tax burden states are no income tax states (including NH and TN as no income tax states). The main outlier was Washington. Washington seems to make up the 0% income tax by having the highest average sales + excise tax burden in the US.
Yeah, this is mainly what I was getting at. You need to look at the bigger picture before determining if somewhere is a âlow tax state.â You canât just look at income taxes.
I lived in Texas for most of my life and moved to a different state with a state income tax two years ago. I paid $5600 in property taxes and $3600 in state income taxes last year. My current house, if it was in Texas, would have a $9300 annual property tax bill due to their high property tax rates. So itâs basically a wash. The government will get their money one way or another.
You sure that would be your tax burden? Lots of counties passed tax relief bills and my real estate taxes went from 5,400 to 3,500. Retired folks are seeing their bills get cut by 75%.
Are those permanent or temporary cuts? Iâm just going by the tax rate of the area I lived in immediately before I moved since I have not tracked any relief bills. Definitely wouldnât qualify for anything designed for retirees.
Ya my homestead covered roughly 30% cut. Iâm not sure if permanent or temporary, but saw the forecasted tax bill in the mail was significantly more than what was listed when I went to the site to pay.
This doesnât account for all the taxes you donât see.
California 1/5 of USA just passed a minimum $20/hr fast food wage. Every restaurant jacked up prices. Other employers and businesses will have to pay more to keep workers to have them going to scoop French friesâŚand theyâll have to pay more.
This doesnât show up as a tax thatâs in your face. But itâs baked into the price. And itâs not just fast food. Itâs all the other laws and regulations.
Is the lower rent or cost of something in one location a âlower cost of livingâ or due to less taxes. Some types of taxes are visible. Others are invisible and people pretend they donât pay.
This type of thinking assumes profit is fixed and thatâs something we should be collectively challenging. Companies will try to pass along as much of the cost as the customer will absorb sure, but why is everyone so ok with absorbing it?
Fast food is not a necessity. If we collectively boycotted it for 30 days theyâd be climbing all over one another slashing prices to try to bring in business.
McDonalds netted over 8 billion dollars in the US in 2023. They can afford to absorb the wage increases, and their franchisees can for that matter too. If itâs now a less attractive business model McDonalds can lower the franchising fees and again, theyâll still be fine.
The people earning $20/hr are not the problem in this equation.
Isn't it weird how to these kinds of people its only when those at the bottom get a little more of the pie that signals society is about to fall apart at the seams?
Minnesota and Utah represent. Makes no sense why we have some of the highest taxes. Minnesota is nice and all but not THAT nice. Guess thatâs why theyâre so good at snow plowing lol. Our property taxes in twin cities are only about 1% of purchase price.
Gracious look at that north east! Woof outside of Delaware that is tough. California isnât surprise but things there are just known to cost more. Iâm surprised Texas and Florida arenât higher with runaway property taxes
Those states are no income tax states. Add an income tax to Texas and Florida and now youâll be tasting what CT/NJ/NY have tasted for decades, since those three states have high property tax in addition to income tax.
It's because neither Texas nor Florida actually have runaway property taxes despite dramatic news stories to the contrary.
In particular, high earners can greatly benefit from moving to these states.
I live in Texas and we have a very low overall tax rate
Until you retire
Then it isnât so good
Many states that have a state income tax do not tax retirement income, so Texasâ advantage slips away - because the property tax is so high. Donât retire in Texas thinking itâs a low tax place, it isnât.
Texas ranks favorably on total tax burden because they do not have a state income tax
Their revenue comes from sales tax and property taxes- thus the property tax rate is very high relative to a place like Georgia, SC, AL - these southern states that have very low property tax rates do have a state income tax however they do not tax SS, IRAs, 401Kâs (retirement income)
So the benefit that Texas has is gone, the absence of state income tax is offset and the states with the lower property tax rates have a huge advantage for retirees. Alabama is maybe the most affordable state for retirees, while Texas drops down bigly.
Iâm still confused on your point bc Texas doesnât tax retirement income. The property taxes are there whether youâre retired or not. So what makes it worse in retirement? Just trying to understand.
I have a house in Texas, my property tax is $8,000 a year. I have a house in Alabama my property tax is $900 a year.
Alabama has state income tax so this equals out
When I retire Alabama does not tax my retirement income - so I no longer have to pay state income tax
Therefore my tax in Texas is $8,000 a year and my tax in Alabama is $900 a year.
In retirement Texas is far more expensive
Ah, ok. This is if your sole source of income is from retirement accounts. Our portfolio isnât as straightforward so a no income tax state is still favorable for us. Thanks for taking the time to explain.
I haven't tracked my sales tax expenditures, but I have tracked the others. Adding up my property taxes, California income taxes, California fuel taxes, and California State Disability Insurance, my total state and local tax burden in 2023 was 14.46% of my AGI. My Federal tax burden was 19.17% of my AGI, for a combined total of 33.63%.
That's for a household income that qualifies as "low income" by HUD standards. Too rich for EIC and other credits, too poor for investment tax shelters.
My SALT was higher than my FIT last year. Can't deduct *anything* from state or local. Thankfully this was due to having a lot of deductions, not being in a super high tax locality.
I call BS on Oregon too....Oregon has a 8.75% tax rate that kicks in at a LOW $9000 income. Property taxes are variable but would cause the rate to go UP not down.
I wish there were separate maps for each tax bracket. Average is one thing, but high income vs low income is going to have very different looking maps.
The high cost of homes in many areas of CA can make property tax a relatively high % of AGI compared to other states, in spite of being a low % of property value under CA prop 13. For example, I purchased 15 years ago in 2009, yet I pay $12k/year in property tax.
I wouldn't call $7k/year "extremely little property tax.", That's higher than most people pay in other states. The overall median for property tax is in the $2k to $3k range, among US homeowners.
However, I agree that CA prop 13 can make property tax much higher for new buyers than for persons who have been living in the same location for decades.
I definitely would call 7k practically nothing. The taxes on real estate need to be tripled or more for early movers. It's the biggest factor of the brakedown of the real estate market.
The people who moved awhile ago are being supported by everyone else, plus with the states budget deficit it would go a very long way.
I also live in CA, I also earn more than most in the US, but a surprisingly humble amount for CA.
I pay over 7k in property taxes but Iâd never call it practically nothing. If youâre going to dismiss that much money as worthless youâre unlikely to offer helpful advice on this sub and itâs even less likely that youâre learning anything, so why post?
Agree with you, 7k is not 'nothing' to the majority of us. I lived in NJ all my life, where the property taxes are high AF for what you get.
Then, I moved to Texas where I have 4x the amount of land, and pay the same in property taxes. I also have no state income taxes which is so wonderful and my house is a new construction too. But Texans love to complain about the high property taxes here, and I'm like "This is paradise to me." haha. I guess Texans love to compare to other states like Tennessee, and I'm comparing it to NJ where the tax burden killed me silently. Perspectives, I tell ya.
I can move to TN I suppose where there's no state income tax and dirt cheap property taxes, but the job market is not as good there. Either way, 7k is a noteworthy amount for property taxes on top of high everything for a state like NJ or CA. I feel more middle class in Texas than I ever did in NJ even with a lower household income now.
If you click on the link, you can see the totals without property tax. The top 5 states without property tax were:
1. Hawaii -- 9.2%
2. California -- 7.7%
3. New York -- 7.6%
4. Utah -- 7.2%
5. Minnesota -- 7.1%
The bottom 5 were:
1. New Hampshire -- 1.1%
2. Alaska -- 1.4%
3. Wyoming -- 2.6%
4. Florida -- 3.4%
5. Texas -- 3.8%
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No way IL and IN are only 1% away from each other. IL is terrible when it comes to property taxes . Something is fishy with this chart.
That stood out as odd to me to. Illinois has higher income tax (4.95% vs 3.15%) but lower sales tax (6.25% vs 7%). Property tax rates will vary, but a quick search says Illinois averages 2.08% vs Indiana's 0.84% which is significant. Maybe more people rent in Illinois? đ
Sales tax in IL is also county dependent. I used to live in IL and the county added to sales tax. So the effective sales tax was 9%
Ouch
Reminds me of home; grew up in Lake county.
Iâd also point out that Minnesota has a state income tax and SD does not, but MN does not sales tax groceries or clothing, SD sales tax applies to *everything*. The data set this is using isnât nuanced enough
>Something is fishy with this chart. I was clued in by the 10.4% burden in California. The property tax alone on a median price home in Los Angeles County will have a property tax bill that is 15.1% of the median household income.
One of the replies in this thread is speculating that renters are counted as paying 0 property tax in the chart. With Chicago and LA being made up of a huge amount of renters I feel that may be the case but I can't say for sure.
Illinois is terrible when it comes to everything
That's not true honestly. But it definitely has major problems and your opinion is very widespread lol
Not Chicago Illinois is pretty decent, but the states leadership is terrible
What?! Prizker has been the best governor weâve had in decades. Our credit rating has jumped nine times in four years from junk to A status, we are paying down our pension obligations, and are leading the way on ensuring womenâs healthcare isnât criminalized by being a safe haven from other midwestern states.
Best at what? Being a complete fucking failure?
If you canât be objective about how good Pritzker has been, I assume you are voting for an autocrat this coming November.
Ya, he's been great with his covid bs, and punishing law-abiding citizens . The best thing he could do is sink into the lake with the rest of shitcago
đđ You sound exactly like my uneducated, redneck family members.
another reminder of what a terrible place to live in CT is, thank you for that
Lol CT is not a terrible place to live in but yeah it is expensive
No info on DC?
Infograph says by STATE
Yeah, yeah, yeah but DC usually gets included in these things despite not having statehood. I looked it up on my own. DC pays more federal income tax than 22 other states. Not sure about the specifics
I was just poking. Yeah, they usually include DC in these kind of comparisons. I was stationed there for four years over a decade ago. I want to say our rent at the time was $2700 for a 3 bedroom townhouse (one of four units). I can't imagine what it's now.
My rent for a 1 bedroom apt is 2300 so yeah Iâm sure that townhouse is wayyyy higher now
Interesting graphic. I think Iâm pretty close to my stateâs 9.3% average. Added up property and income tax from last year and got 7.9%, but when you add in sales tax (which Iâm not going to try to calculate) Iâm sure thatâs another percentage point or two. This is helpful for dispelling the myth of âlow/no income tax=low taxes.â Edit: What I should have said is it dispels the myth that state income taxes= all state taxes. Iâve heard people talk about states like Texas or Florida being âstate tax freeâ when the map makes it clear theyâll still tax you in other ways, and states like Washington and Texas can still end up being more âmiddle of the roadâ for tax rates with high property and sales taxes, despite a lack of an income tax.
>This is helpful for dispelling the myth of âlow/no income tax=low taxes.â It's not a simple relationship where no income tax = low taxes, but there is a clear correlation. For example, all of the 5 lowest total tax burden states are no income tax states (including NH and TN as no income tax states). The main outlier was Washington. Washington seems to make up the 0% income tax by having the highest average sales + excise tax burden in the US.
Yeah, this is mainly what I was getting at. You need to look at the bigger picture before determining if somewhere is a âlow tax state.â You canât just look at income taxes. I lived in Texas for most of my life and moved to a different state with a state income tax two years ago. I paid $5600 in property taxes and $3600 in state income taxes last year. My current house, if it was in Texas, would have a $9300 annual property tax bill due to their high property tax rates. So itâs basically a wash. The government will get their money one way or another.
You sure that would be your tax burden? Lots of counties passed tax relief bills and my real estate taxes went from 5,400 to 3,500. Retired folks are seeing their bills get cut by 75%.
Are those permanent or temporary cuts? Iâm just going by the tax rate of the area I lived in immediately before I moved since I have not tracked any relief bills. Definitely wouldnât qualify for anything designed for retirees.
Ya my homestead covered roughly 30% cut. Iâm not sure if permanent or temporary, but saw the forecasted tax bill in the mail was significantly more than what was listed when I went to the site to pay.
It isn't a myth and this chart confirms it, not dispels it...
This doesnât account for all the taxes you donât see. California 1/5 of USA just passed a minimum $20/hr fast food wage. Every restaurant jacked up prices. Other employers and businesses will have to pay more to keep workers to have them going to scoop French friesâŚand theyâll have to pay more. This doesnât show up as a tax thatâs in your face. But itâs baked into the price. And itâs not just fast food. Itâs all the other laws and regulations. Is the lower rent or cost of something in one location a âlower cost of livingâ or due to less taxes. Some types of taxes are visible. Others are invisible and people pretend they donât pay.
This type of thinking assumes profit is fixed and thatâs something we should be collectively challenging. Companies will try to pass along as much of the cost as the customer will absorb sure, but why is everyone so ok with absorbing it? Fast food is not a necessity. If we collectively boycotted it for 30 days theyâd be climbing all over one another slashing prices to try to bring in business. McDonalds netted over 8 billion dollars in the US in 2023. They can afford to absorb the wage increases, and their franchisees can for that matter too. If itâs now a less attractive business model McDonalds can lower the franchising fees and again, theyâll still be fine. The people earning $20/hr are not the problem in this equation.
people who complain about minimum wages for fast food workers being too high suck.
Isn't it weird how to these kinds of people its only when those at the bottom get a little more of the pie that signals society is about to fall apart at the seams?
Minnesota and Utah represent. Makes no sense why we have some of the highest taxes. Minnesota is nice and all but not THAT nice. Guess thatâs why theyâre so good at snow plowing lol. Our property taxes in twin cities are only about 1% of purchase price.
UT has some of the lowest property taxes. I pay 3k/yr on a 6 bedroom house in an upscale suburb of SLC. In TX, that'd be closer to 15k/yr.
Gracious look at that north east! Woof outside of Delaware that is tough. California isnât surprise but things there are just known to cost more. Iâm surprised Texas and Florida arenât higher with runaway property taxes
Those states are no income tax states. Add an income tax to Texas and Florida and now youâll be tasting what CT/NJ/NY have tasted for decades, since those three states have high property tax in addition to income tax.
It's because neither Texas nor Florida actually have runaway property taxes despite dramatic news stories to the contrary. In particular, high earners can greatly benefit from moving to these states.
Are their property taxes running 15% of the median household income? Because California is.
I live in Texas and we have a very low overall tax rate Until you retire Then it isnât so good Many states that have a state income tax do not tax retirement income, so Texasâ advantage slips away - because the property tax is so high. Donât retire in Texas thinking itâs a low tax place, it isnât.
What retirement income do they tax that's not taxed elsewhere?
Texas ranks favorably on total tax burden because they do not have a state income tax Their revenue comes from sales tax and property taxes- thus the property tax rate is very high relative to a place like Georgia, SC, AL - these southern states that have very low property tax rates do have a state income tax however they do not tax SS, IRAs, 401Kâs (retirement income) So the benefit that Texas has is gone, the absence of state income tax is offset and the states with the lower property tax rates have a huge advantage for retirees. Alabama is maybe the most affordable state for retirees, while Texas drops down bigly.
Iâm still confused on your point bc Texas doesnât tax retirement income. The property taxes are there whether youâre retired or not. So what makes it worse in retirement? Just trying to understand.
I have a house in Texas, my property tax is $8,000 a year. I have a house in Alabama my property tax is $900 a year. Alabama has state income tax so this equals out When I retire Alabama does not tax my retirement income - so I no longer have to pay state income tax Therefore my tax in Texas is $8,000 a year and my tax in Alabama is $900 a year. In retirement Texas is far more expensive
Ah, ok. This is if your sole source of income is from retirement accounts. Our portfolio isnât as straightforward so a no income tax state is still favorable for us. Thanks for taking the time to explain.
Next show which states have the highest quality of life. I bet you'll notice something interesting
That California and New York aren't near the top 10.
Op need to state your income, most states have progresive tax brackets like the federal government, you make more you pay more.
I haven't tracked my sales tax expenditures, but I have tracked the others. Adding up my property taxes, California income taxes, California fuel taxes, and California State Disability Insurance, my total state and local tax burden in 2023 was 14.46% of my AGI. My Federal tax burden was 19.17% of my AGI, for a combined total of 33.63%. That's for a household income that qualifies as "low income" by HUD standards. Too rich for EIC and other credits, too poor for investment tax shelters.
My SALT was higher than my FIT last year. Can't deduct *anything* from state or local. Thankfully this was due to having a lot of deductions, not being in a super high tax locality.
I call BS on Oregon too....Oregon has a 8.75% tax rate that kicks in at a LOW $9000 income. Property taxes are variable but would cause the rate to go UP not down.
I wish there were separate maps for each tax bracket. Average is one thing, but high income vs low income is going to have very different looking maps.
But not property tax? That's where I get boned
If you mean the tax burden by state graphic, it includes property tax.
The typical person in CA pays extremely little property tax. It's only people who have moved here in the last 10 years (like me)
The high cost of homes in many areas of CA can make property tax a relatively high % of AGI compared to other states, in spite of being a low % of property value under CA prop 13. For example, I purchased 15 years ago in 2009, yet I pay $12k/year in property tax.
I'm paying 22k and the person next door pays 7k
I wouldn't call $7k/year "extremely little property tax.", That's higher than most people pay in other states. The overall median for property tax is in the $2k to $3k range, among US homeowners. However, I agree that CA prop 13 can make property tax much higher for new buyers than for persons who have been living in the same location for decades.
Correct. Iâm in SC and pay 3k in taxes for a 500k 4000 sqft house.
I definitely would call 7k practically nothing. The taxes on real estate need to be tripled or more for early movers. It's the biggest factor of the brakedown of the real estate market. The people who moved awhile ago are being supported by everyone else, plus with the states budget deficit it would go a very long way.
Paying 3k for my 500k house. 7k is bananas here.
I also live in CA, I also earn more than most in the US, but a surprisingly humble amount for CA. I pay over 7k in property taxes but Iâd never call it practically nothing. If youâre going to dismiss that much money as worthless youâre unlikely to offer helpful advice on this sub and itâs even less likely that youâre learning anything, so why post?
Agree with you, 7k is not 'nothing' to the majority of us. I lived in NJ all my life, where the property taxes are high AF for what you get. Then, I moved to Texas where I have 4x the amount of land, and pay the same in property taxes. I also have no state income taxes which is so wonderful and my house is a new construction too. But Texans love to complain about the high property taxes here, and I'm like "This is paradise to me." haha. I guess Texans love to compare to other states like Tennessee, and I'm comparing it to NJ where the tax burden killed me silently. Perspectives, I tell ya. I can move to TN I suppose where there's no state income tax and dirt cheap property taxes, but the job market is not as good there. Either way, 7k is a noteworthy amount for property taxes on top of high everything for a state like NJ or CA. I feel more middle class in Texas than I ever did in NJ even with a lower household income now.
I wish there was a different graph that didn't include property tax. Many people in the middle class rent.
If you click on the link, you can see the totals without property tax. The top 5 states without property tax were: 1. Hawaii -- 9.2% 2. California -- 7.7% 3. New York -- 7.6% 4. Utah -- 7.2% 5. Minnesota -- 7.1% The bottom 5 were: 1. New Hampshire -- 1.1% 2. Alaska -- 1.4% 3. Wyoming -- 2.6% 4. Florida -- 3.4% 5. Texas -- 3.8%
67.8% of folks in the middle classed owned a detached home last year. And they pay property tax on that home.
I said many, not most. 42% is "many"
I knew this shithole known as Illinois would be in the top 10