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Tax friendly is just a relative measure of comparing each state's tax expenses to other states. I guessing that income from rent or business ownership is taxed differently than salary income in some states, is why two family examples have those different income sources.
So there are 4 hypothetical families with different incomes as explained on the far left side of the article. The author figured their state taxes (income, sales, RE, and personal property/car/gas taxes) for every state. The state tax cost for each family type was then ranked in the first 4 major columns. The tax friendly column was the average of each state's score for all four family types. Alaska scored 9, 10, 3, 2, so its average was 6. That average number was graded on the curve to give 4 letter grades to the whole list in the tax friendly column.
It is a good state tax study since the data includes the other taxes in those states with no state income taxes.
Last edited by heyyou; 01-01-2008 at 12:53 AM.
Reason: clarification
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