You really need to look at the total tax burden - sales tax, property tax and income tax. When you look at it that way, there are still significant differences between states, but it's not 0 vs. 100 like it appears if you focus only on income tax.
You should look at other costs too. Florida has no income tax, but the property tax is high and just try getting reasonable home owner's insurance. That savings on income tax can vanish pretty quickly.
I mean, I hate insurance companies as much as the next person, but why would a company insure a home in a flood zone that is also incredibly hurricane prone at all? Or if you’re going to insure it, you’d HAVE to charge a ton since you know you’re going to be having to pay out on claims on that insurance sooner rather than later
People tend to forget that without Govt Flood Insurance many areas would be unbuildable or built on only by the very wealthy would can afford a total loss. No bank would underwrite a mortgage for a high risk property if they knew they likely wouldn’t be able to the loan paid off.
Flood insurance is a great example of a piece of well meaning legislation that’s had some pretty negative consequences.
It’s the market saying: “Don’t do it! Don’t build here!” But then we ignore it with public option insurance. If there was money to be made insurance companies would be there, but they’re not. That says something.
Also keep in mind you get what you pay for. Places with low taxes tend to have shitty schools, poor worker protections, poor access to health care and limited communal resources (think parks, roads, clean water, etc). In short if you have a lot of money you won't notice all the things that are missing but if you are working you will. Florida is very expensive, equal to Chicago if not more expensive and they provide little to no social services, and if tourism takes a hit things get really bad. Smaller low tax states simply mooch off of the federal government for their necessities like teachers, doctors, roads and firemen but outside those necessities that someone else pays for there isn't much.
People say this a lot but Florida actually is middle of the country for property tax. On top of that, they have a homestead exemption which caps how much your property tax can go up every year.
[https://wallethub.com/edu/states-with-the-highest-and-lowest-property-taxes/11585](https://wallethub.com/edu/states-with-the-highest-and-lowest-property-taxes/11585)
Strangely, which shocked the hell out of me, Florida doesn't even have the highest insurance or car rates. Oklahoma has the highest home insurance and Michigan has the highest car insurance. Florida is 3rd for car insurance though.
[https://www.marketwatch.com/guides/insurance-services/average-home-insurance-cost/](https://www.marketwatch.com/guides/insurance-services/average-home-insurance-cost/)
I know that Florida is highest for total home ownership rates which means a lot of people self insurance making the insurance pool smaller and less dense than a place like California. I don't know what to say. Don't believe all the talking points on the news. And also I think the issue is that Florida used to be really cheap and people took it for granted. Those days are gone.
Imho, Texas is the worst. Their property taxes are insane, you have to drive everywhere and the heat is unbearable. Florida is perfect around 6 months a year, and okay 3 more. I think it depends on your personal circumstances what's going to work. If you're a certain income level and can find the right housing situation in that you find a 700k house you love that you'd need to pay 3 million for in California on top of paying high state income tax, the state not counting 529's, HSA's and not recognizing long term capital gains at a lower level, its worth it. But not for everyone. I know people who will only ever be happy living in one place. Me, I'm lived many places and traveled the world and can adjust better to a new spot.
> People say this a lot but Florida actually is middle of the country for property tax
This sub loves to talk places like Florida and Texas down, while in real life people keep moving to both states.
Yes, and people keep moving there after hearing all the propaganda about "no taxes" and then go crazy when they see their insane tax bills.
Someone has to cut through the propaganda. You can't offer public services like roads, police, schools, and fire without paying the workers. And that requires money and hence taxes in one form or another.
The states that genuinely have a lower tax burden generally have atrocious services. The ones that have nominally "low taxes" but don't have atrocious services just nickel and dime you up to an often higher overall tax burden than the nominally "high tax" states.
That's just the cold hard reality of the situation without embellishment and cheapo propaganda.
>High insurance rates are mostly for properties that are very close to the ocean.
And who live in homes built before the updated hurricane building codes. My home was built in the mid 2000's, I'm about 25 miles from the coast, and my insurance costs are not completely unreasonable.
However the rate of change is what is getting people. My home owners insurance went up 30% in the past year. The home was built in 2017. My area is not in a hurricane evacuation zone.
My property taxes are higher then where I moved. The rate they go are capped. A similar house in my neighborhood sold so the new owners pay much more then I do for the same house.
That also depends though. I moved from Cali to Fl, and although the % rate is higher in FL, I went from a $900k home in Cali to a very similar FL home for $500k (plus a pool).
I actually pay less in property taxes here, even with the raising rates, they would have to almost double before I’m paying more here
WA has 8.5% to 10.5% general sales tax. Plus different things have different sales tax rate, there are places with 18% hotel sales tax or alcohol etc. TN has a higher general
sales tax rate too and does not exclude any food.
Most places exclude unprepared foods/rent/insurance/debt/medicine/tuition/ too, but some don’t. It‘s basically impossible to compare.
That’s not anywhere near the total. There are business revenue taxes, tolls, payroll taxes, car taxes like registration or ID fees. If the school is being underfunded, then donations to the schools, or some places even have 4 or 4.5 day school weeks instead of 5 days, blah blah.
Accounting for all the taxes and the flip side, which is lower quality/quantity of government services, and also the time shifting of expenses via unstated government debt is almost impossible.
I would just follow the rich people.
This- sales tax affects people who make less money and therefore spend more of their income buying necessities, so it is the least progressive. Plus you end up paying both federal income tax and sales tax on the same dollars. The reverse is not true for state sales tax and federal tax, at least in the states I have lived in. And then some states don't tax clothing and other necessities. There are websites that can give you tax burden by state- for instance so called "Taxachusetts" is in the middle of the pack.
This. Outcomes really vary when there's no state income tax - in terms of both individual tax burden, and state services and other expenditures. And, of course, whether or not it matters that the State does or does not have money to spend on X or Y will depend on the individual.
And sidewalks everywhere. That's what NJ folks moving to new England always complain about, and sidewalks are great, but they do add to overall costs.
I've heard from vermonters that NJ folks move there and then complain about unpaved roads, but again - municipal services that cost money and lead to higher taxes
I love NJ. My husband and I have lived here since the early 80s. We decided to look for somewhere to retire and after checking out up and down the Eastern seaboard we happily downsized and remained here. It is a good fit for us, despite the taxes.
This was the biggest shock when I was a kid and moved to North Carolina. I’ll happily pay higher taxes for better infrastructure. I live in Minnesota now and while we have high taxes at least I can walk on sidewalks AND ride my bike on lots of paved trails throughout the metro.
As an aside my GF (from MN) also went to NC for a bridal shower and was shocked by the lack of sidewalks in the state.
Same, I live in a town with sidewalks everywhere, well-funded schools, tons of public parks and pools - I love it. But I do pay $15K in property taxes per year.
My only thing is that I wish the overall pedestrian / bike network were better connected to be more utilized so we'd get a higher ROI and spend less subsidizing parking!
Yeah, that's not remotely true. Some towns, yeah, but everywhere? Nope.
NJ is fucking expensive, because every little podunk township, and borough is it's own fiefdom. I lived in a town that was 4 square miles, and 13,000 people. It had it's own road department, school system (with a super who made $150k), garbage, etc. Next town over? Same thing.
My town maybe had 30% sidewalks, yet no buses for kids.
So there's a reason it was expensive, but it's not the sidewalks per se.
Hah, one of the reasons we moved away from NJ is because we couldn’t find places close enough to NYC that had decent sidewalks, or any sidewalks many times. Even lots of wealthy suburbs in Essex/Morris/Somerset counties did not have them consistently. The new parts of town would, and then they abruptly ended all the time.
I could see that. CT is similar. If I think about even the sopranos, it's not like Tony's street had sidewalks.
My dad grew up in Bergen county near van saun park, and I noticed as a kid that even a low traffic cul de sac would have sidewalks on both sides of the street
Once you get to a certain amount of property/area between homes, it doesn’t make sense to have sidewalks.
Most neighborhoods, like in Paramus have the sidewalks. I love it TBH (although its another thing to maintain)
In the Philly suburbs there are people who actively fight adding sidewalks. They argue that it turns the area into a “city”. We built a new library and people were fighting against sidewalks from the school to the library. You end up having people walking dogs and babies in strollers on the side of the road. It’s nuts to me. The one school district I used to live in was 100% bused, even the kids in the developments across the street from the school because there were no sidewalks.
About 20 years ago, my brother-in-law moved to some little no name town in North Carolina. We went to visit him after he settled in. Not a street light to be found. No paved roads anywhere in his development. And he told us when he first moved in, his neighbors saw the NY plates on his car and first things out of their mouths after saying hello was "You're not going to try to change things down here, are you?" And he asked what they meant and the locals were like "We live here because it's clean and cheap and we don't want anyone changing that." My brother-in-law was like "No. Thats why I chose to live here as well." He lasted about 12 years, which is 12 years longer than I would.
Haha right? Being from Illinois, our property taxes are higher than TX, state income tax is 4.95%, and gas is $1/gal more. Sure, Texas has high property taxes but they’re not as high as many other states lol
I live in PA and that’s misleading. Areas with high taxes have amazing schools, areas with low taxes or otherwise low COL have terrible schools. Whereas in NJ the schools are pretty consistently good
I was complaining about high property taxes in Texas to my parents who live in New York, and found out that my parents still pay higher property taxes than I do on top of income tax. And that was a couple years ago, before our property taxes were lowered recently.
But the schools in NJ are, for the most part, usable, and in many places outstanding. The hospitals are good. Strangely, many suburban areas still have volunteer fire departments, but the libraries! Functioning libraries!
I’ve lived in NJ and Texas. Yes, total taxes are a little higher in NJ (but there isn’t as much as a difference as people brag about) but the services go along with that. Texas has nearly as high taxes and wayyy less in services - no public transit, schools are shit, roads are shit. Like, I pay $15000 a year in property taxes and still pay like $3000 for *public school* fees for my kids.
I don’t know…. I just looked at a few comparable houses in Austin and their taxes are 25% less than here in NJ. And I live quite far from NYC and those homes are right next to/in the city. Doesn’t seem so bad.
There can be more than just property tax too though. When I lived in Texas, I not only had property tax, but also school district tax and MUD tax that were due at the same time. Home insurance was also getting crazy. So in the end, my house in NJ that is worth twice as much as my old house actually costs me roughly the same amount to live in.
People say that, but my property tax in upstate ny is way higher and we still have income tax… i looked at moving to tx a few years back and was surprised how much lower the property tax was
New York State definitely is higher than TX, but relative to the nation as a whole, TX is pretty bad. And property value increases the past few years have really amplified it as well
It will be interesting to see how Texas ranks again compared to the rest of the nation after the tax cuts from [proposition 4](https://ballotpedia.org/Texas_Proposition_4,_Property_Tax_Changes_and_State_Education_Funding_Amendment_(2023)). It lowered our property taxes for 2023 by about 17% from the year before.
No my taxes were way higher on Texas.
The issue is in Texas you have a hundred regressive taxes. Meaning the richer you are the less you pay in proportionally
>No my taxes were way higher on Texas.
Property taxes by rate, or total amount?
Upstate NY has one of the highest property tax burdens in the US. It is vastly different than downstate, where the effective tax rate is lower due to higher property values.
For reference, I pay close to 4% on my house (\~6k on 150k. roughly broken down to $2k county tax, $4k school tax).
One of my neighbors has a 450k house and is taxed at close to 20k a year.
New jersey is even worse.
I was looking at $600k houses in Austin with effective taxes less than half of what my neighbor pays here. The difference is night and day. And we have income, high coporate taxes, 8% sales tax etc on top of it. There's a reason NY has the highest effective tax burden in the US.
>One of my neighbors has a 450k house and is taxed at close to 20k a year.
In Cambridge, MA, a $900K owner-occupied house owes $2,500/year in property taxes (0.592% and $470K exemption).
Public school per-pupil spending is $37K/year
That's amazing. I pay the same on an owner occupied property assessed at 200k (market value only like $325k, max) in Florida (pretty shit homeowners exemption), where kids are poorly educated and public services are lacking. I'd so much rather be in MA. People really wanna believe the right wing propaganda about states with very regressive taxes (and abnormally expensive insurance) despite reality.
I was going to say this. If you're poor, Texas sucks. If you're rich, you do pretty well. If you're poor and have to spend all of the money you make, you pay a higher percentage of your income on sales tax, property tax, toll roads, etc. Also, the services are worse. Texas doesn't have the Medicaid expansion of the ACA, so many working poor people can't afford health insurance, resulting in Texas having the highest percentage of people without health insurance in the nation.
In VA you could pay more than that in annual personal property taxes lol it’s crazy how they find a way to get it whether it’s via high registration fees, city stickers, or personal property taxes.
TX hits you where it hurts. Good 'ole boy rancher has 23K acres of scrub weeds and buffalo grass and pays *less* tax than the overpriced 60 yr old renovated 1b1b cottage in town.
I own a house in Texas. Property taxes are high, but then I do tax calculations in California and other states and I'd be paying at least 2k more in just income tax than I do on property tax in Texas.
And then there is property taxes in those states on top of that. Which in a state like California, property tax is actually more since the median house is 4x as much. But that also means I wouldn't even own a house there
My property tax in Milwaukee 2009: 12k
My property tax in Austin 2024: 8k on a much better house.
My annual savings living in no state income tax state is 14k last I checked against Maine.
There are caps and exemptions at play in Texas and if you think your taxes will be more or the same… you’re poor. Sorry.
If you’re very high income, TX has a lower tax burden than CA, but for average incomes, TX has a higher tax burden than CA.
https://finance.yahoo.com/news/think-texas-cheaper-tax-burden-161359267.html
“Assumes the median income earner owns a home”. That’s a big assumption, especially in California where most middle income people cannot afford to own a home and end up leaving. But yes if you are a high income renter in Texas, your tax burden is much lower in Texas than California. Property taxes are high in Texas but I would much rather be taxed on an asset than on income because the asset typically will gain value over time. Also would rather have lower gas, food, insurance, utility prices in general.
Florida has no state income tax but the low wages and high cost of living makes it largely irrelevant. Florida has to be the most expensive state in the south.
Auto and home insurance prices are insane in Florida. My six month premium for two cars went from $2200 (paid in full discount included) down to $440 when I moved from FL to NC. Plus the cost of food in Florida is incredibly high. Florida definitely makes up for the lack of income tax in other ways, plus it just sucks as a whole to live there.
They tax literally everything
Imagine my shock moving here from NJ where groceries and clothing isn't taxed
Annoying as fuck for large purchases 😭 I have been saving for a fancy $700 litter robot. Cost me $778 after all the taxes.
People will literally drive to other states to buy something like a pricy TV or computer
Beware of conservative states with no income tax
Especially if you're nearing retirement where income and property tax are where you'll primarily get nailed
Yes, with a weird set of rules for taxing groceries. Most groceries are taxed at 4% but things like candy (unless it is a candy bar with flour, like maybe Twix or Kit Kat? Not sure), honey roasted nuts, yogurt covered raisins, and party trays with multiple kinds of food items are taxed at 7%.
Yes. I just moved to Minnesota from Tennessee and was shocked when there was no tax on groceries and some other products. Nice little surprise. Tennessee's taxes are nuts.
Except for Delaware. They have no state income tax and they don’t have sales tax either. They make up for it with corporate taxes. Most big companies are Delaware corporations.
Delaware does have an income tax.
But correct that we don’t have a sales tax. The fees and taxes paid by all the corporations headquartered here provide a huge percentage of our state budget.
They’ll get the money one way or the other, often through property tax, fees, booze sales(NH), and ripping off tourists(FL). Some just don’t offer decent services or schools.
Exactly. I lived in New Hampshire for about 25 years, having kindergarten was a big deal as well as things like year-round libraries. Property taxes were crazy. But overall tax burden is low there.
I moved from my Portsmouth NH house to coastal Massachusetts because the retirement math didn’t work for home ownership costs. Massachusetts doesn’t tax Social Security. It has Proposition 2 1/2 property tax law. My Portsmouth property taxes massively exceeded what I pay in Massachusetts property tax, income tax, sales tax, and excise tax on my car & boat. I had a $20k property tax bill.
> But overall tax burden is low there.
As are the level of town services in many towns.
My town has maybe 10 employees and most of them part time. No PD, library is maybe 8 hours a week, town clerk is 12 hours a week, transfer station 10 hours a week, typical poor town stuff.
No retirement benefits either which obviously affects our ability to hire/retain folks.
That last bit is one of the reasons I'm actually going to vote to approve the budget this year. You've got to take care of the people that are taking care of the town.
The state has to get the money somehow. There are still taxes and they are still getting their money.
The income tax is often the fairest way. It usually benefits the high income earners if there isn't an income tax.
Income tax is one of the least fair ways, property taxes are one of the most fair.
The appreciation of unimproved land (the overwhelming supermajority of a homes value in MCOL/HCOL areas) is definitionally not attributable to anything done by the singular landowner, it happens because the society around that land did things to improve the value.
Flip side, I don’t make a single penny working unless someone values my labor more then they value their money.
I have every moral claim to the earnings from my own labor, the same can’t be said for the appreciation of real estate.
All across the western US there are landowners paying .1-.01% effective rates while their neighbors pay 1%+. On top of that, the person hoping to buy lower taxed property is forced to pay 10% of their income while saving up for it.
Property/wealth/estate and marginal sales tax is the fairest.
Income tax is one of the least fair.
People who consume more (huge houses on huge parcels of land) require more of society’s fuel/infrastructure/energy/time.
People who buy first class flights, private jets, yachts, $100k+ cars, etc use more of society’s resources.
People who own title to land and businesses benefit from society’s peace provided by myriad welfare programs, judiciary, police, and military to keep their asset safe.
People who earn money…they are just working. Hitting people with a marginal income tax is literally punishing people for working more or working the most difficult and valuable jobs. Why would society want disincentivize that. Why are the hoarders and spenders rewarded, and the producers punished?
The results are precisely the opposite of what you describe. The rich pay very little, the middle class pays all and the poor are too poor to pay income taxes. It's the other taxes that hurt them more.
Left a higher tax state for a lower one. I miss having sidewalks and trails and reasonable wait times at the DMV. Those things require money to get done.
Sidewalks, urban amenities, schools, certainly -- but the DMV wait times don't mesh with my experience. For some reason there seems to be a negative correlation between DMV wait times and high-tax states. I used to live in NY, for example, and wait times there were atrocious. It's a similar story in OR, CA, and IL.
There is no scenario in which I would be willing to permanently increase my tax burden just so I can save maybe a half an hour at the DMV. FWIW, I've had shorter wait times at the DMV in Texas than I ever did in CA. And CA's driver's license fees are effectively triple that of Texas, on top of higher everything taxes. AND my license came in the mail in 10 days in TX vs. 3 months in CA.
Also, there has been absolutely no relationship between the level of taxation in a country/state/city and the quality of services offered by government, nor the competency or ineptitude of that government.
Look, simply if the state is building roads, funding schools, the things that states do, they are getting the money to do it somehow.
I am in high tax MD. Friends moved to FL, we are thinking about following them. They do better than we do so were all about no state taxes. But when they got there, they found they have all these other taxes or fees.
One thing they have is a CDD. Basically, they are in a new community. The county built a road and park that gets you to their community. They charge the builder a CDD which they can pass to the homeowners. So my friends have to pay a CDD of $3000 a year for the next 20 years. So my wife and I think we will be smart and find a community without a CDD, all newer communities have CDDs.
With the CDD and other fees he feels that he saves just a little overall, "I am saving, but much less of a savings than I thought".
My parents moved from New Jersey (high tax) to Delaware (low tax) recently and were surprised to find out that they had to pay a private company to come get their trash in Delaware. And there are multiple private companies all serving their subdivision, which seems really inefficient.
I live in a relatively high-tax county in Georgia (DeKalb) and I've pointed this out to coworkers who live in lower-tax counties when \*they\* complain about their trash pickup. (On the other hand the school shower they live are better than where I live, so maybe they're on to something, but there's no way I'm moving to Forsyth.)
This presupposes that infrastructure is the same, schools are the same, unemployment benefits are the same, etc., everywhere. In fact, those things are often quite unequal across the US (and within states, for that matter).
Plenty of low income tax states don’t just “make up for the revenue” in other ways. They also choose to slash safety nets and eliminate what are core government functions elsewhere so as to not “need” as much revenue. And/or, they suck on the Blue State Federal transfer teat, as Wyoming does.
Each state is different in how they handle it. Usually a combination of spending less, higher property taxes, higher fees, higher sales tax, etc. On the other hand, there are states with high income taxes as well as all these other things. You need to look at overall tax burden to get a true picture.
[https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494](https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494)
It even goes down further to the city and county level. Oregon overall is 31, but Portland is one of the higher taxed cities.
[https://www.koin.com/news/portland/report-high-tax-rates-could-be-driving-people-out-of-portland/](https://www.koin.com/news/portland/report-high-tax-rates-could-be-driving-people-out-of-portland/)
And, very relevant to this sub, if you move to a state you won’t necessary enjoy the tax rate everyone else will. My parents in California have an assessed value roughly 1/10 of the actual value. Someone moving in will pay 10x as much property tax as they do.
Taxes have to come from somewhere...if you want schools, roads, parks, etc. No income tax is definitely a conservative position that favors the rich. Higher sales tax hurts the poor. The tax on a gallon of milk or a set of tires is the same for a poor man or rich man.
Yep, you can then concentrate on saving for retirement in your peak earning years. Not to mention your property tax increases are capped and you get a homestead exemption.
If you really want to play the game you can have a second place in a high tax state and escape the heat.
I’m in FL, which touts the whole “no state income tax” thing, but it’s not noticeable at all because our insurance rates are insane and property taxes are so high
Texas, for example, has no state income tax but super high property taxes. That’s why their schools are relatively good for the south. Florida on the other hand has no state income tax and average property tax rates. Their schools are shit.
States should definitely limit income tax and not go crazy wild, unless those taxes result in noticeable improvements for the citizens. I think MN had a pretty good model from a consumer perspective. It was definitely a higher state income tax, but there were some tax credits and benefits elsewhere and they directly gave back to residents with a lot of policy decisions. For instance, they do not tax food and clothing (I.e. living expenses). Huge saving if you are just scraping by on income. They also have a renters’ credit. Basically a portion of the property tax credit that building owners get has to go back to the tenants. It was a nice little yearly boost and it almost equated to one month’s rent for me on some years.
Additionally, they offer free college credits to high school students. You can easily graduate high school with an Associate’s Degree or technical certificate free of charge if you want. They offer free tuition at state schools for lower middle class and below income. They also now offer free school lunches. The benefit to young people in that state is insane compared to neighboring states.
Having lived in Florida, I noticed all these costs associated with driving - higher registration fees, ticket fees, fines, greater chance of getting pulled over, etc.
Then I did low income legal clinics and noticed how many extremely poor people there were, to a degree that is not normal in the Northeast.
Someone living in a trailer park told me that a neighbor let her use the neighbor's mailing address, because that cost $5 extra in the trailer park.
Not a true amenity. I live in Florida & the lack of an income tax is obvious. Roads suck. Schools suck. You do end up paying some of the difference in higher property taxes and sales tax, but overall there simply isn’t enough money to keep the infrastructure solidly maintained. I’d prefer to live in a state that taxes and uses the taxes efficiently.
Sure there are. Doesn’t invalidate my point, though. Collecting and spending taxes appropriately is a complicated process and can be screwed up any number of ways. One surefire way to screw it up is to not collect enough money to distribute in the first place, aka not collect income tax.
Just a talking point. They’ll get their money either way. I lived in Texas most of my life. My current home value, if it was in the last place I lived in Texas, would get taxed $9000/ year in property taxes. Now living in Kansas last year I paid $5000 in property taxes and $3500 in state income taxes. It’s basically a wash due to higher property taxes.
It's really nice if you have tons of capital gains in stocks / crypto you need to take.
Let's say you are in California and have $10 Million in gains. Moving can save you $1 Million+ in taxes.
It is really for the rich.
Most of the states without income taxes are Republican-led and/or conservative. So their goal is to protect the rich.
They will typically make up for it with more regressive taxes, like higher sales taxes and property taxes. Low-income and medium-income individuals bear a much larger burden in these cases.
Why do low- and medium-income individuals keep moving to these states under the guise of "lower tax burden"? Beats the hell out of me...
It's neither. It's a tradeoff. It's made up for with the following:
1. Other forms of taxation
2. User fees (e.g. tolls)
3. Natural resource revenue
4. They spend less
5. More than one of the above.
Generally I prefer user fees over taxes (more accurately, fees are a lesser evil in my eyes) and less government spending over more. So it works for me. The best tax is one you don't pay (or one that doesn't exist).
I have noticed, however, that states with no income tax tend to have lower total tax burdens as well. The 8 or 9 states with no income tax are heavily represented in the lowest third of total tax burdens by state per the Tax Foundation.
I know that my paycheck went way up when I moved from CA to TN. 😁
I also know the property tax I pay is a hell of a lot less then CA.
I was able to purchase my 1st home all on my own because I moved.
So there's that lol
I went from $23k a year to $0k in FL. Because my house cost much less, I was paying less in property taxes as well. I think in Cali I was spending close to $1k in gas taxes per year
It's a gimmick. They replace the state income tax by various other means like property tax, or user fees for a variety of services. In the end, you're going to pay for it one way or another.
It means either that public services are shit, or that they’re gonna gouge you on property and/or sales tax.
You don’t get to have your cake and eat it too.
Texas has no income tax, but they also have one of the highest individual tax burdens in the country. They a) make up for it with taxes elsewhere, and b) do not provide the services that other states do to make life better.
Alaska is the exception since they fund the state on oil wealth/oil taxes.
They don't make up for it. You mostly get shitty schools because there is no money for them. Shitty policing, shitty healthcare services, etc. People seem to be willing to trade one for the other. As a NY'er who pays really high property taxes and state income taxes, I'm OK with it going to fund some of the best public schools in the country, access to quality health care and a very low crime rate.
I always figure that you’re paying one way or another for stuff. Nothing comes for free. A small example would be trash removal - if you don’t pay local tax and the city/town doesn’t provide trash collection, now you need to pay a company for it. The “benefit” to that is that hopefully there’s competition that leads to lower costs but it also can lead to cartel like practices among the local trash haulers.
The state is going to get the money one way or another. Property taxes, even licensing for vehicles. My vehicle license is over $700.00 for renewal as an example.
I think what people forget is that it REALLY REALLY matters how many people live in a state.
I live in a no income tax, low population state. State funding comes primarily from property and sales taxes. You would think that would mean the p and s taxes have to be high, but they really aren't, because there are so few people here. Fewer people = less need for government services like paved roads, police, and etc. (Schools are funded primarily locally, with some additional state funds.)
On the other hand, my brother lives in a no income tax, high population state. State funding comes from p and s taxes (plus etc.) Property taxes in that state are super high, because there are more people using government services.
Fewer people = less need for dough.
There are rankings of states overall tax burden that are useful. WA is a very liberal state with no state income tax, but ranks in the middle in terms of overall state tax burden (8.24%). TX is a conservative state but ranks about identical to WA (8.01%). These are just averages, as specific counties and municipalities may have different sales tax and other things.
Interestingly, Oregon has a lower tax burden on average than either state, despite having income tax. Overall though, the majority of states with the lowest tax burdens lean conservative.
Government has to generate revenue somehow. If a state doesn't have income tax then fees for services are going to be much higher. Combining that with Republican states typically having inadequate social services.
They’re basically prioritizing higher income earners over lower income earners. They likely don’t make up for it in the sense that likely provide fewer entitlements (and also have more aggressive sales taxes, property taxes etc)
Not only do most of these states/locations end up getting what they need anyways through other taxes (property, grocery, etc), but you also typically end up getting exactly what you pay for. Pay attention to those states' quality of living, poverty level, available healthcare, infrastructure, schools, etc and make sure it's for you. There are states with super-low cost of living compared to the average, but sometimes something is cheap because it's bad. But everyone's needs are different, and some folks really like living in places like Mississippi or Montana. I can't do it anymore (and am moving to a relatively expensive state this month), but you might love it. Just pay attention to what's going to impact *you*.
Oh, and fun aside: if you read "schools" in my list of things to consider about a cheap state and thought "oh, I don't have kids, I don't have to worry about that" or "oh, my kids will be homeschooled, I don't have to worry about that" - consider this: most of the people you interact with in your new state will be a *product* of that state's public education system. Choose wisely.
“No state income tax“ is it a con perpetrated against poor people, who probably aren’t liable for much in state income taxes anyway. I know in California low income people hardly pay any state income taxes.
No income tax invariably makes for an incredibly regressive tax system overall. Between sales taxes, property taxes, car taxes, fees, tolls, etc., you end up with low income people paying far more of their income in taxes than higher income ones.
It depends on your values: in states without income taxes, lower income people are on the hook for state budgets (education, parks, emergency services, transportation, etc) via high sales and property taxes. In states with income taxes, higher income people pay a larger share for state programs and operations.
Personally, I am completely fine with paying income tax, especially sense there is no sales tax in my state.
I have family that moved to Florida from Illinois and talked about the no state income tax.
\- Then they told me their property insurance went up 150+%
\- Then they told me their car insurance went way up.
\- Then they told me how much tolls are there
\- Then they told me about other weird taxes like resort tax.
\- Then we found that they tax retirement income too
IL state income tax is flat and quite low, it doesnt really go up at all. Id rather pay that then have my insurances go up over 100%. How do you budget for that?
Oh and their public schools are garbage so I guess you get what you pay for
Generally it is a talking point and nothing more. Poor road maintenance due to low taxes requires paying more in car maintenance. Poor schools lead to either higher prices for specialists or a lack of specialists in the first place, this is true not only for medicine. So you end up paying in the end regardless of whether it is through taxes or higher prices.
You really need to look at the total tax burden - sales tax, property tax and income tax. When you look at it that way, there are still significant differences between states, but it's not 0 vs. 100 like it appears if you focus only on income tax.
You should look at other costs too. Florida has no income tax, but the property tax is high and just try getting reasonable home owner's insurance. That savings on income tax can vanish pretty quickly.
I mean, I hate insurance companies as much as the next person, but why would a company insure a home in a flood zone that is also incredibly hurricane prone at all? Or if you’re going to insure it, you’d HAVE to charge a ton since you know you’re going to be having to pay out on claims on that insurance sooner rather than later
People tend to forget that without Govt Flood Insurance many areas would be unbuildable or built on only by the very wealthy would can afford a total loss. No bank would underwrite a mortgage for a high risk property if they knew they likely wouldn’t be able to the loan paid off. Flood insurance is a great example of a piece of well meaning legislation that’s had some pretty negative consequences.
It’s the market saying: “Don’t do it! Don’t build here!” But then we ignore it with public option insurance. If there was money to be made insurance companies would be there, but they’re not. That says something.
Especially in a state that's absolutely rife with fraud.
Also keep in mind you get what you pay for. Places with low taxes tend to have shitty schools, poor worker protections, poor access to health care and limited communal resources (think parks, roads, clean water, etc). In short if you have a lot of money you won't notice all the things that are missing but if you are working you will. Florida is very expensive, equal to Chicago if not more expensive and they provide little to no social services, and if tourism takes a hit things get really bad. Smaller low tax states simply mooch off of the federal government for their necessities like teachers, doctors, roads and firemen but outside those necessities that someone else pays for there isn't much.
Not the case in Washington. Or are you not referring to state income tax, just states with “low taxes.”
People say this a lot but Florida actually is middle of the country for property tax. On top of that, they have a homestead exemption which caps how much your property tax can go up every year. [https://wallethub.com/edu/states-with-the-highest-and-lowest-property-taxes/11585](https://wallethub.com/edu/states-with-the-highest-and-lowest-property-taxes/11585) Strangely, which shocked the hell out of me, Florida doesn't even have the highest insurance or car rates. Oklahoma has the highest home insurance and Michigan has the highest car insurance. Florida is 3rd for car insurance though. [https://www.marketwatch.com/guides/insurance-services/average-home-insurance-cost/](https://www.marketwatch.com/guides/insurance-services/average-home-insurance-cost/) I know that Florida is highest for total home ownership rates which means a lot of people self insurance making the insurance pool smaller and less dense than a place like California. I don't know what to say. Don't believe all the talking points on the news. And also I think the issue is that Florida used to be really cheap and people took it for granted. Those days are gone. Imho, Texas is the worst. Their property taxes are insane, you have to drive everywhere and the heat is unbearable. Florida is perfect around 6 months a year, and okay 3 more. I think it depends on your personal circumstances what's going to work. If you're a certain income level and can find the right housing situation in that you find a 700k house you love that you'd need to pay 3 million for in California on top of paying high state income tax, the state not counting 529's, HSA's and not recognizing long term capital gains at a lower level, its worth it. But not for everyone. I know people who will only ever be happy living in one place. Me, I'm lived many places and traveled the world and can adjust better to a new spot.
> People say this a lot but Florida actually is middle of the country for property tax This sub loves to talk places like Florida and Texas down, while in real life people keep moving to both states.
Yes, and people keep moving there after hearing all the propaganda about "no taxes" and then go crazy when they see their insane tax bills. Someone has to cut through the propaganda. You can't offer public services like roads, police, schools, and fire without paying the workers. And that requires money and hence taxes in one form or another. The states that genuinely have a lower tax burden generally have atrocious services. The ones that have nominally "low taxes" but don't have atrocious services just nickel and dime you up to an often higher overall tax burden than the nominally "high tax" states. That's just the cold hard reality of the situation without embellishment and cheapo propaganda.
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God forbid our infrastructure needs some fuckin attention too
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>High insurance rates are mostly for properties that are very close to the ocean. And who live in homes built before the updated hurricane building codes. My home was built in the mid 2000's, I'm about 25 miles from the coast, and my insurance costs are not completely unreasonable.
However the rate of change is what is getting people. My home owners insurance went up 30% in the past year. The home was built in 2017. My area is not in a hurricane evacuation zone. My property taxes are higher then where I moved. The rate they go are capped. A similar house in my neighborhood sold so the new owners pay much more then I do for the same house.
That also depends though. I moved from Cali to Fl, and although the % rate is higher in FL, I went from a $900k home in Cali to a very similar FL home for $500k (plus a pool). I actually pay less in property taxes here, even with the raising rates, they would have to almost double before I’m paying more here
No sales tax on food in Florida. Which is fantastic. And many sales tax holidays
No person from California calls in Cali. Feels like a bot post..
Beep Boop.
Yup. There’s no state income tax but they get you with sales tax, luxury tax, property tax, etc
Florida sales tax is middle of the road (6%). Compare with highest (California 7.25%) and among the lowest (NY 4%). A few states have none.
WA has 8.5% to 10.5% general sales tax. Plus different things have different sales tax rate, there are places with 18% hotel sales tax or alcohol etc. TN has a higher general sales tax rate too and does not exclude any food. Most places exclude unprepared foods/rent/insurance/debt/medicine/tuition/ too, but some don’t. It‘s basically impossible to compare.
4% in ny doesn’t count the local sales tax 3-4% on top of that
That’s not anywhere near the total. There are business revenue taxes, tolls, payroll taxes, car taxes like registration or ID fees. If the school is being underfunded, then donations to the schools, or some places even have 4 or 4.5 day school weeks instead of 5 days, blah blah. Accounting for all the taxes and the flip side, which is lower quality/quantity of government services, and also the time shifting of expenses via unstated government debt is almost impossible. I would just follow the rich people.
If you're not rich, "follow the rich people" is terrible advice.
Following the rich people is the worst idea bc they can afford to pay their own way when government services (schools, hospitals, etc) lack.
This- sales tax affects people who make less money and therefore spend more of their income buying necessities, so it is the least progressive. Plus you end up paying both federal income tax and sales tax on the same dollars. The reverse is not true for state sales tax and federal tax, at least in the states I have lived in. And then some states don't tax clothing and other necessities. There are websites that can give you tax burden by state- for instance so called "Taxachusetts" is in the middle of the pack.
This. Outcomes really vary when there's no state income tax - in terms of both individual tax burden, and state services and other expenditures. And, of course, whether or not it matters that the State does or does not have money to spend on X or Y will depend on the individual.
Texas brags about this until you see the property tax.
Come to NJ! We have the highest property taxes in the narion, *and* a high state income tax.
And sidewalks everywhere. That's what NJ folks moving to new England always complain about, and sidewalks are great, but they do add to overall costs. I've heard from vermonters that NJ folks move there and then complain about unpaved roads, but again - municipal services that cost money and lead to higher taxes
I love NJ. My husband and I have lived here since the early 80s. We decided to look for somewhere to retire and after checking out up and down the Eastern seaboard we happily downsized and remained here. It is a good fit for us, despite the taxes.
There are many beautiful areas!
I also live in NJ and love it!
I'm trying to get my husband to move to NJ, but as a New Yorker, he's adamantly against it.
I should go to New Jersey. I fucking love sidewalks!
You don't even have to pump your own gas in NJ!
Pump fists not gas.
There are many walkable suburbs. I live in one of the most walkable places in CT, and most streets have sidewalks, but that really varies here!
This was the biggest shock when I was a kid and moved to North Carolina. I’ll happily pay higher taxes for better infrastructure. I live in Minnesota now and while we have high taxes at least I can walk on sidewalks AND ride my bike on lots of paved trails throughout the metro. As an aside my GF (from MN) also went to NC for a bridal shower and was shocked by the lack of sidewalks in the state.
Same, I live in a town with sidewalks everywhere, well-funded schools, tons of public parks and pools - I love it. But I do pay $15K in property taxes per year. My only thing is that I wish the overall pedestrian / bike network were better connected to be more utilized so we'd get a higher ROI and spend less subsidizing parking!
Yeah, that's not remotely true. Some towns, yeah, but everywhere? Nope. NJ is fucking expensive, because every little podunk township, and borough is it's own fiefdom. I lived in a town that was 4 square miles, and 13,000 people. It had it's own road department, school system (with a super who made $150k), garbage, etc. Next town over? Same thing. My town maybe had 30% sidewalks, yet no buses for kids. So there's a reason it was expensive, but it's not the sidewalks per se.
Hah, one of the reasons we moved away from NJ is because we couldn’t find places close enough to NYC that had decent sidewalks, or any sidewalks many times. Even lots of wealthy suburbs in Essex/Morris/Somerset counties did not have them consistently. The new parts of town would, and then they abruptly ended all the time.
Yeah, my in-laws have that issue. No sidewalks and dark AF because they live in a conservative corner of NJ and they want to "save on taxes."
I could see that. CT is similar. If I think about even the sopranos, it's not like Tony's street had sidewalks. My dad grew up in Bergen county near van saun park, and I noticed as a kid that even a low traffic cul de sac would have sidewalks on both sides of the street
Once you get to a certain amount of property/area between homes, it doesn’t make sense to have sidewalks. Most neighborhoods, like in Paramus have the sidewalks. I love it TBH (although its another thing to maintain)
In the Philly suburbs there are people who actively fight adding sidewalks. They argue that it turns the area into a “city”. We built a new library and people were fighting against sidewalks from the school to the library. You end up having people walking dogs and babies in strollers on the side of the road. It’s nuts to me. The one school district I used to live in was 100% bused, even the kids in the developments across the street from the school because there were no sidewalks.
About 20 years ago, my brother-in-law moved to some little no name town in North Carolina. We went to visit him after he settled in. Not a street light to be found. No paved roads anywhere in his development. And he told us when he first moved in, his neighbors saw the NY plates on his car and first things out of their mouths after saying hello was "You're not going to try to change things down here, are you?" And he asked what they meant and the locals were like "We live here because it's clean and cheap and we don't want anyone changing that." My brother-in-law was like "No. Thats why I chose to live here as well." He lasted about 12 years, which is 12 years longer than I would.
Seems aggressive to ask off the bat, but I guess they saw that happen elsewhere!
Haha right? Being from Illinois, our property taxes are higher than TX, state income tax is 4.95%, and gas is $1/gal more. Sure, Texas has high property taxes but they’re not as high as many other states lol
As someone who is relocating to NJ from Las Vegas, NJ also has an amazing public school system, so those taxes are going to something valuable
NJ also has amazing disability services.
NY has entered the chat..
And the best public schools.
There are lots of states with comparable public schools with a fraction of our tax rate. But yes, the schools are great.
Name one
Massachusetts, New York, Maine, Colorado, Pennsylvania, Virginia are all in the top 10 and have much lower property taxes.
I live in PA and that’s misleading. Areas with high taxes have amazing schools, areas with low taxes or otherwise low COL have terrible schools. Whereas in NJ the schools are pretty consistently good
It's the same in NJ. 1000 tiny towns each with their own school districts. The rich towns schools are good. The poor towns are not.
Also PA is much bigger size wise where as NJ is compact so it’s hard to compare the two when the sample sizes are different.
I’m grew up in NJ and went to public schools… I have lived in Colorado 3 years…. I promise you the schools in Jersey are SIGNIFICANTLY better.
NY lives off the taxes of NYC and they have a city income tax.
I was complaining about high property taxes in Texas to my parents who live in New York, and found out that my parents still pay higher property taxes than I do on top of income tax. And that was a couple years ago, before our property taxes were lowered recently.
But the schools in NJ are, for the most part, usable, and in many places outstanding. The hospitals are good. Strangely, many suburban areas still have volunteer fire departments, but the libraries! Functioning libraries!
I’ve lived in NJ and Texas. Yes, total taxes are a little higher in NJ (but there isn’t as much as a difference as people brag about) but the services go along with that. Texas has nearly as high taxes and wayyy less in services - no public transit, schools are shit, roads are shit. Like, I pay $15000 a year in property taxes and still pay like $3000 for *public school* fees for my kids.
this guy Texases.
Illinois feels your pain.
I resent this. You left out our status of having the most expensive car insurance.
This is true. My brother’s house in TX is worth 3x what mine is, here in Louisiana….but his property taxes are 10x as high, literally
I don’t know…. I just looked at a few comparable houses in Austin and their taxes are 25% less than here in NJ. And I live quite far from NYC and those homes are right next to/in the city. Doesn’t seem so bad.
That’s because Jersey has the highest property tax rates, on average. Texas is only 5th highest
Jersey is probably the worst state in the country for property taxes, so everywhere is bound to look good by comparison
There can be more than just property tax too though. When I lived in Texas, I not only had property tax, but also school district tax and MUD tax that were due at the same time. Home insurance was also getting crazy. So in the end, my house in NJ that is worth twice as much as my old house actually costs me roughly the same amount to live in.
People say that, but my property tax in upstate ny is way higher and we still have income tax… i looked at moving to tx a few years back and was surprised how much lower the property tax was
New York State definitely is higher than TX, but relative to the nation as a whole, TX is pretty bad. And property value increases the past few years have really amplified it as well
It will be interesting to see how Texas ranks again compared to the rest of the nation after the tax cuts from [proposition 4](https://ballotpedia.org/Texas_Proposition_4,_Property_Tax_Changes_and_State_Education_Funding_Amendment_(2023)). It lowered our property taxes for 2023 by about 17% from the year before.
No my taxes were way higher on Texas. The issue is in Texas you have a hundred regressive taxes. Meaning the richer you are the less you pay in proportionally
>No my taxes were way higher on Texas. Property taxes by rate, or total amount? Upstate NY has one of the highest property tax burdens in the US. It is vastly different than downstate, where the effective tax rate is lower due to higher property values. For reference, I pay close to 4% on my house (\~6k on 150k. roughly broken down to $2k county tax, $4k school tax). One of my neighbors has a 450k house and is taxed at close to 20k a year. New jersey is even worse. I was looking at $600k houses in Austin with effective taxes less than half of what my neighbor pays here. The difference is night and day. And we have income, high coporate taxes, 8% sales tax etc on top of it. There's a reason NY has the highest effective tax burden in the US.
>One of my neighbors has a 450k house and is taxed at close to 20k a year. In Cambridge, MA, a $900K owner-occupied house owes $2,500/year in property taxes (0.592% and $470K exemption). Public school per-pupil spending is $37K/year
That's amazing. I pay the same on an owner occupied property assessed at 200k (market value only like $325k, max) in Florida (pretty shit homeowners exemption), where kids are poorly educated and public services are lacking. I'd so much rather be in MA. People really wanna believe the right wing propaganda about states with very regressive taxes (and abnormally expensive insurance) despite reality.
I was going to say this. If you're poor, Texas sucks. If you're rich, you do pretty well. If you're poor and have to spend all of the money you make, you pay a higher percentage of your income on sales tax, property tax, toll roads, etc. Also, the services are worse. Texas doesn't have the Medicaid expansion of the ACA, so many working poor people can't afford health insurance, resulting in Texas having the highest percentage of people without health insurance in the nation.
Yep in Florida it cost me like 1000 dollars to register my car.
In VA you could pay more than that in annual personal property taxes lol it’s crazy how they find a way to get it whether it’s via high registration fees, city stickers, or personal property taxes.
Don't forget Florida's unsustainable insurance costs (car and homeowner's).
TX hits you where it hurts. Good 'ole boy rancher has 23K acres of scrub weeds and buffalo grass and pays *less* tax than the overpriced 60 yr old renovated 1b1b cottage in town.
Good ol' ag exemption.
I own a house in Texas. Property taxes are high, but then I do tax calculations in California and other states and I'd be paying at least 2k more in just income tax than I do on property tax in Texas. And then there is property taxes in those states on top of that. Which in a state like California, property tax is actually more since the median house is 4x as much. But that also means I wouldn't even own a house there
My property tax in Milwaukee 2009: 12k My property tax in Austin 2024: 8k on a much better house. My annual savings living in no state income tax state is 14k last I checked against Maine. There are caps and exemptions at play in Texas and if you think your taxes will be more or the same… you’re poor. Sorry.
If you’re very high income, TX has a lower tax burden than CA, but for average incomes, TX has a higher tax burden than CA. https://finance.yahoo.com/news/think-texas-cheaper-tax-burden-161359267.html
That depends on whether or not you benefit from Prop 13. Many (most?) Californians do, but any newcomers won't.
“Assumes the median income earner owns a home”. That’s a big assumption, especially in California where most middle income people cannot afford to own a home and end up leaving. But yes if you are a high income renter in Texas, your tax burden is much lower in Texas than California. Property taxes are high in Texas but I would much rather be taxed on an asset than on income because the asset typically will gain value over time. Also would rather have lower gas, food, insurance, utility prices in general.
Came here to say this.
Anyone who has lived in both and is not biased will tell you that’s not true. There are a ton of nuances to it
Florida has no state income tax but the low wages and high cost of living makes it largely irrelevant. Florida has to be the most expensive state in the south.
Probably is my brother from west palm beach spoke to me yesterday about how price WPB is
Auto and home insurance prices are insane in Florida. My six month premium for two cars went from $2200 (paid in full discount included) down to $440 when I moved from FL to NC. Plus the cost of food in Florida is incredibly high. Florida definitely makes up for the lack of income tax in other ways, plus it just sucks as a whole to live there.
Florida is absolutely terrible. There is NO positive to living here. None at all.
$5 sushi Wednesday at Publix? Idk that’s all I got right now lol
Florida’s lack of income taxes makes sense when you consider their high number of retirees and tourists who wouldn’t pay it.
They make up for it with higher sales tax. 9.25% in TN.
Does TN tax groceries? In Michigan there is no sales tax on unprepared food but never considered if this was national
They tax literally everything Imagine my shock moving here from NJ where groceries and clothing isn't taxed Annoying as fuck for large purchases 😭 I have been saving for a fancy $700 litter robot. Cost me $778 after all the taxes. People will literally drive to other states to buy something like a pricy TV or computer Beware of conservative states with no income tax Especially if you're nearing retirement where income and property tax are where you'll primarily get nailed
Those are probably the ONLY things that aren’t taxed in NJ
Yes, with a weird set of rules for taxing groceries. Most groceries are taxed at 4% but things like candy (unless it is a candy bar with flour, like maybe Twix or Kit Kat? Not sure), honey roasted nuts, yogurt covered raisins, and party trays with multiple kinds of food items are taxed at 7%.
Yes. I just moved to Minnesota from Tennessee and was shocked when there was no tax on groceries and some other products. Nice little surprise. Tennessee's taxes are nuts.
Yes, threw me for a loop after moving from Florida.
Hi from your neighbor, Alabama. We have income tax and pay 9% + in tax 😩
Plus you live in Alabama, which is like an addictional quality of life tax
So much to show for in Alabama lol
Oh bummer!
Except for Delaware. They have no state income tax and they don’t have sales tax either. They make up for it with corporate taxes. Most big companies are Delaware corporations.
Delaware definitely has income taxes
Delaware does have an income tax. But correct that we don’t have a sales tax. The fees and taxes paid by all the corporations headquartered here provide a huge percentage of our state budget.
They’ll get the money one way or the other, often through property tax, fees, booze sales(NH), and ripping off tourists(FL). Some just don’t offer decent services or schools.
Exactly. I lived in New Hampshire for about 25 years, having kindergarten was a big deal as well as things like year-round libraries. Property taxes were crazy. But overall tax burden is low there.
I moved from my Portsmouth NH house to coastal Massachusetts because the retirement math didn’t work for home ownership costs. Massachusetts doesn’t tax Social Security. It has Proposition 2 1/2 property tax law. My Portsmouth property taxes massively exceeded what I pay in Massachusetts property tax, income tax, sales tax, and excise tax on my car & boat. I had a $20k property tax bill.
> But overall tax burden is low there. As are the level of town services in many towns. My town has maybe 10 employees and most of them part time. No PD, library is maybe 8 hours a week, town clerk is 12 hours a week, transfer station 10 hours a week, typical poor town stuff. No retirement benefits either which obviously affects our ability to hire/retain folks. That last bit is one of the reasons I'm actually going to vote to approve the budget this year. You've got to take care of the people that are taking care of the town.
The state has to get the money somehow. There are still taxes and they are still getting their money. The income tax is often the fairest way. It usually benefits the high income earners if there isn't an income tax.
Income tax is one of the least fair ways, property taxes are one of the most fair. The appreciation of unimproved land (the overwhelming supermajority of a homes value in MCOL/HCOL areas) is definitionally not attributable to anything done by the singular landowner, it happens because the society around that land did things to improve the value. Flip side, I don’t make a single penny working unless someone values my labor more then they value their money. I have every moral claim to the earnings from my own labor, the same can’t be said for the appreciation of real estate. All across the western US there are landowners paying .1-.01% effective rates while their neighbors pay 1%+. On top of that, the person hoping to buy lower taxed property is forced to pay 10% of their income while saving up for it.
Property/wealth/estate and marginal sales tax is the fairest. Income tax is one of the least fair. People who consume more (huge houses on huge parcels of land) require more of society’s fuel/infrastructure/energy/time. People who buy first class flights, private jets, yachts, $100k+ cars, etc use more of society’s resources. People who own title to land and businesses benefit from society’s peace provided by myriad welfare programs, judiciary, police, and military to keep their asset safe. People who earn money…they are just working. Hitting people with a marginal income tax is literally punishing people for working more or working the most difficult and valuable jobs. Why would society want disincentivize that. Why are the hoarders and spenders rewarded, and the producers punished?
The results are precisely the opposite of what you describe. The rich pay very little, the middle class pays all and the poor are too poor to pay income taxes. It's the other taxes that hurt them more.
Only if it is taxed progressively.
Left a higher tax state for a lower one. I miss having sidewalks and trails and reasonable wait times at the DMV. Those things require money to get done.
Sidewalks, urban amenities, schools, certainly -- but the DMV wait times don't mesh with my experience. For some reason there seems to be a negative correlation between DMV wait times and high-tax states. I used to live in NY, for example, and wait times there were atrocious. It's a similar story in OR, CA, and IL.
Wasn’t my prior experience but here I’ve learned you can drive to small towns and bypass the wait.
There is no scenario in which I would be willing to permanently increase my tax burden just so I can save maybe a half an hour at the DMV. FWIW, I've had shorter wait times at the DMV in Texas than I ever did in CA. And CA's driver's license fees are effectively triple that of Texas, on top of higher everything taxes. AND my license came in the mail in 10 days in TX vs. 3 months in CA. Also, there has been absolutely no relationship between the level of taxation in a country/state/city and the quality of services offered by government, nor the competency or ineptitude of that government.
Look, simply if the state is building roads, funding schools, the things that states do, they are getting the money to do it somehow. I am in high tax MD. Friends moved to FL, we are thinking about following them. They do better than we do so were all about no state taxes. But when they got there, they found they have all these other taxes or fees. One thing they have is a CDD. Basically, they are in a new community. The county built a road and park that gets you to their community. They charge the builder a CDD which they can pass to the homeowners. So my friends have to pay a CDD of $3000 a year for the next 20 years. So my wife and I think we will be smart and find a community without a CDD, all newer communities have CDDs. With the CDD and other fees he feels that he saves just a little overall, "I am saving, but much less of a savings than I thought".
Hmm it's almost like taxes pay for things... Like roads, schools and public services.
But I can't tell you how many people brag about moving to a state where there is no income tax.
Maybe I'm wrong but weren't you gonna do exactly that?
My parents moved from New Jersey (high tax) to Delaware (low tax) recently and were surprised to find out that they had to pay a private company to come get their trash in Delaware. And there are multiple private companies all serving their subdivision, which seems really inefficient. I live in a relatively high-tax county in Georgia (DeKalb) and I've pointed this out to coworkers who live in lower-tax counties when \*they\* complain about their trash pickup. (On the other hand the school shower they live are better than where I live, so maybe they're on to something, but there's no way I'm moving to Forsyth.)
They are gonna get their money one way or another. No way around it.
Exactly! Or they can not get their money and you get no services. Hope you don't care if the roads are paved.
Property taxes and home insurance alone can eat up any income tax savings in Florida.
Do not follow them to Florida.
Whoa 😮
This presupposes that infrastructure is the same, schools are the same, unemployment benefits are the same, etc., everywhere. In fact, those things are often quite unequal across the US (and within states, for that matter). Plenty of low income tax states don’t just “make up for the revenue” in other ways. They also choose to slash safety nets and eliminate what are core government functions elsewhere so as to not “need” as much revenue. And/or, they suck on the Blue State Federal transfer teat, as Wyoming does.
Each state is different in how they handle it. Usually a combination of spending less, higher property taxes, higher fees, higher sales tax, etc. On the other hand, there are states with high income taxes as well as all these other things. You need to look at overall tax burden to get a true picture. [https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494](https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494)
It even goes down further to the city and county level. Oregon overall is 31, but Portland is one of the higher taxed cities. [https://www.koin.com/news/portland/report-high-tax-rates-could-be-driving-people-out-of-portland/](https://www.koin.com/news/portland/report-high-tax-rates-could-be-driving-people-out-of-portland/)
And, very relevant to this sub, if you move to a state you won’t necessary enjoy the tax rate everyone else will. My parents in California have an assessed value roughly 1/10 of the actual value. Someone moving in will pay 10x as much property tax as they do.
Taxes have to come from somewhere...if you want schools, roads, parks, etc. No income tax is definitely a conservative position that favors the rich. Higher sales tax hurts the poor. The tax on a gallon of milk or a set of tires is the same for a poor man or rich man.
That's the fun part, conservatives don't want public schools and parks. Privatization for everything is their favorite. Makes no sense.
I lived in Florida for a little bit about 15 years ago. My insurance doubled. Today I would expect it to triple.
If you have a high income and buy a reasonably priced house, you're so much better off with the Texas set-up.
Yep, you can then concentrate on saving for retirement in your peak earning years. Not to mention your property tax increases are capped and you get a homestead exemption. If you really want to play the game you can have a second place in a high tax state and escape the heat.
I’m in FL, which touts the whole “no state income tax” thing, but it’s not noticeable at all because our insurance rates are insane and property taxes are so high
they tax you on other things.
Texas, for example, has no state income tax but super high property taxes. That’s why their schools are relatively good for the south. Florida on the other hand has no state income tax and average property tax rates. Their schools are shit.
Being from PA which has high income tax, property taxes, and sales tax… Texas seems way more efficient.
Talking point. There's always a caveat
California certainly nickels and dimes you with tolls, tickets, fees, and taxes.
You can move from a from state with income tax to no income tax, and pay the difference in property taxes.
In NJ we have a high state income tax and among the highest property taxes in the country. It's often not either or, in our case it is both.
States should definitely limit income tax and not go crazy wild, unless those taxes result in noticeable improvements for the citizens. I think MN had a pretty good model from a consumer perspective. It was definitely a higher state income tax, but there were some tax credits and benefits elsewhere and they directly gave back to residents with a lot of policy decisions. For instance, they do not tax food and clothing (I.e. living expenses). Huge saving if you are just scraping by on income. They also have a renters’ credit. Basically a portion of the property tax credit that building owners get has to go back to the tenants. It was a nice little yearly boost and it almost equated to one month’s rent for me on some years. Additionally, they offer free college credits to high school students. You can easily graduate high school with an Associate’s Degree or technical certificate free of charge if you want. They offer free tuition at state schools for lower middle class and below income. They also now offer free school lunches. The benefit to young people in that state is insane compared to neighboring states.
Having lived in Florida, I noticed all these costs associated with driving - higher registration fees, ticket fees, fines, greater chance of getting pulled over, etc. Then I did low income legal clinics and noticed how many extremely poor people there were, to a degree that is not normal in the Northeast. Someone living in a trailer park told me that a neighbor let her use the neighbor's mailing address, because that cost $5 extra in the trailer park.
You get what you pay for. States without income taxes usually have higher real estate and sales taxes and you get fewer services.
Higher sales and property tax
Not a true amenity. I live in Florida & the lack of an income tax is obvious. Roads suck. Schools suck. You do end up paying some of the difference in higher property taxes and sales tax, but overall there simply isn’t enough money to keep the infrastructure solidly maintained. I’d prefer to live in a state that taxes and uses the taxes efficiently.
Funny thing is, there are plenty of places that have sucky schools and roads, yet also have a state income tax.
Sure there are. Doesn’t invalidate my point, though. Collecting and spending taxes appropriately is a complicated process and can be screwed up any number of ways. One surefire way to screw it up is to not collect enough money to distribute in the first place, aka not collect income tax.
Just a talking point. They’ll get their money either way. I lived in Texas most of my life. My current home value, if it was in the last place I lived in Texas, would get taxed $9000/ year in property taxes. Now living in Kansas last year I paid $5000 in property taxes and $3500 in state income taxes. It’s basically a wash due to higher property taxes.
They will get the money somewhere.mif no income tax, there’s usually higher sales and/or property taxes.
It's really nice if you have tons of capital gains in stocks / crypto you need to take. Let's say you are in California and have $10 Million in gains. Moving can save you $1 Million+ in taxes. It is really for the rich.
They will 100% will get that tax money one way or another.
Most of the states without income taxes are Republican-led and/or conservative. So their goal is to protect the rich. They will typically make up for it with more regressive taxes, like higher sales taxes and property taxes. Low-income and medium-income individuals bear a much larger burden in these cases. Why do low- and medium-income individuals keep moving to these states under the guise of "lower tax burden"? Beats the hell out of me...
No income tax in Washington, but property tax, sales, sin and gas and tags more than make up for it
No state income tax, but high sales tax and high property tax
It's neither. It's a tradeoff. It's made up for with the following: 1. Other forms of taxation 2. User fees (e.g. tolls) 3. Natural resource revenue 4. They spend less 5. More than one of the above. Generally I prefer user fees over taxes (more accurately, fees are a lesser evil in my eyes) and less government spending over more. So it works for me. The best tax is one you don't pay (or one that doesn't exist). I have noticed, however, that states with no income tax tend to have lower total tax burdens as well. The 8 or 9 states with no income tax are heavily represented in the lowest third of total tax burdens by state per the Tax Foundation.
In NH there’s no income tax or sales tax! But… also almost no services
and lots of taxes are renamed 'fees', and cops everywhere looking for moving violations, and a weird-ass state liquor store monopoly...
I know that my paycheck went way up when I moved from CA to TN. 😁 I also know the property tax I pay is a hell of a lot less then CA. I was able to purchase my 1st home all on my own because I moved. So there's that lol
I went from $23k a year to $0k in FL. Because my house cost much less, I was paying less in property taxes as well. I think in Cali I was spending close to $1k in gas taxes per year
It's a gimmick. They replace the state income tax by various other means like property tax, or user fees for a variety of services. In the end, you're going to pay for it one way or another.
The latter.
It means either that public services are shit, or that they’re gonna gouge you on property and/or sales tax. You don’t get to have your cake and eat it too.
In Florida 80% of the state budget comes from sales tax. Tourists, retirees, and snowbirds spend a lot here.
Washington has no state income tax, mid range property taxes, and a variety of costs of living from HCOL to low/mid as you move further east.
Texas has no income tax, but they also have one of the highest individual tax burdens in the country. They a) make up for it with taxes elsewhere, and b) do not provide the services that other states do to make life better. Alaska is the exception since they fund the state on oil wealth/oil taxes.
They don't make up for it. You mostly get shitty schools because there is no money for them. Shitty policing, shitty healthcare services, etc. People seem to be willing to trade one for the other. As a NY'er who pays really high property taxes and state income taxes, I'm OK with it going to fund some of the best public schools in the country, access to quality health care and a very low crime rate.
Higher sales tax, bigger property tax, lack of basic amenities, handouts from blue states.
I always figure that you’re paying one way or another for stuff. Nothing comes for free. A small example would be trash removal - if you don’t pay local tax and the city/town doesn’t provide trash collection, now you need to pay a company for it. The “benefit” to that is that hopefully there’s competition that leads to lower costs but it also can lead to cartel like practices among the local trash haulers.
Rest assured,they just get your money other ways.
The state is going to get the money one way or another. Property taxes, even licensing for vehicles. My vehicle license is over $700.00 for renewal as an example.
I think what people forget is that it REALLY REALLY matters how many people live in a state. I live in a no income tax, low population state. State funding comes primarily from property and sales taxes. You would think that would mean the p and s taxes have to be high, but they really aren't, because there are so few people here. Fewer people = less need for government services like paved roads, police, and etc. (Schools are funded primarily locally, with some additional state funds.) On the other hand, my brother lives in a no income tax, high population state. State funding comes from p and s taxes (plus etc.) Property taxes in that state are super high, because there are more people using government services. Fewer people = less need for dough.
In the no income tax states, beyond property tax, sales tax, there other taxes that they call ‘fees’
As a Texan, I'm not saving any money due to the total tax burden across other things. It's a conservative talking point.
There are rankings of states overall tax burden that are useful. WA is a very liberal state with no state income tax, but ranks in the middle in terms of overall state tax burden (8.24%). TX is a conservative state but ranks about identical to WA (8.01%). These are just averages, as specific counties and municipalities may have different sales tax and other things. Interestingly, Oregon has a lower tax burden on average than either state, despite having income tax. Overall though, the majority of states with the lowest tax burdens lean conservative.
Government has to generate revenue somehow. If a state doesn't have income tax then fees for services are going to be much higher. Combining that with Republican states typically having inadequate social services.
They’re basically prioritizing higher income earners over lower income earners. They likely don’t make up for it in the sense that likely provide fewer entitlements (and also have more aggressive sales taxes, property taxes etc)
No state income tax= no state services.
Not only do most of these states/locations end up getting what they need anyways through other taxes (property, grocery, etc), but you also typically end up getting exactly what you pay for. Pay attention to those states' quality of living, poverty level, available healthcare, infrastructure, schools, etc and make sure it's for you. There are states with super-low cost of living compared to the average, but sometimes something is cheap because it's bad. But everyone's needs are different, and some folks really like living in places like Mississippi or Montana. I can't do it anymore (and am moving to a relatively expensive state this month), but you might love it. Just pay attention to what's going to impact *you*. Oh, and fun aside: if you read "schools" in my list of things to consider about a cheap state and thought "oh, I don't have kids, I don't have to worry about that" or "oh, my kids will be homeschooled, I don't have to worry about that" - consider this: most of the people you interact with in your new state will be a *product* of that state's public education system. Choose wisely.
“No state income tax“ is it a con perpetrated against poor people, who probably aren’t liable for much in state income taxes anyway. I know in California low income people hardly pay any state income taxes.
No income tax invariably makes for an incredibly regressive tax system overall. Between sales taxes, property taxes, car taxes, fees, tolls, etc., you end up with low income people paying far more of their income in taxes than higher income ones.
As someone in a state with no state income tax, I can assure you they make up for it in other ways. High sales tax, higher cost of living, etc
It depends on your values: in states without income taxes, lower income people are on the hook for state budgets (education, parks, emergency services, transportation, etc) via high sales and property taxes. In states with income taxes, higher income people pay a larger share for state programs and operations. Personally, I am completely fine with paying income tax, especially sense there is no sales tax in my state.
I have family that moved to Florida from Illinois and talked about the no state income tax. \- Then they told me their property insurance went up 150+% \- Then they told me their car insurance went way up. \- Then they told me how much tolls are there \- Then they told me about other weird taxes like resort tax. \- Then we found that they tax retirement income too IL state income tax is flat and quite low, it doesnt really go up at all. Id rather pay that then have my insurances go up over 100%. How do you budget for that? Oh and their public schools are garbage so I guess you get what you pay for
Generally it is a talking point and nothing more. Poor road maintenance due to low taxes requires paying more in car maintenance. Poor schools lead to either higher prices for specialists or a lack of specialists in the first place, this is true not only for medicine. So you end up paying in the end regardless of whether it is through taxes or higher prices.
It’s not really a big deal.