Net impact of living in no-state-tax state ?

[marko]

Massachusetts property tax: $8500.

Need to withdraw $9000 from IRA just to pay the 5.3% income tax in order to pay the property tax. (Prop tax not deductible for state taxes.)

[Da Nag]

Quote:

Originally Posted by JoeWras I'm in high tech, but don't live in CA. Career wise, that is not optimal. Silicon Valley provides so many opportunities. And, of course, there's so much I'd want to do in CA, the Sierras and the west coast.

Nerd here as well, and I lived there until retiring to WA recently.

Even with a 50% reduction in income, we're saving almost $15K a year between property and income taxes. Getting out was a no-brainer.

Much as I hated living there, I must admit - I'll enjoy being a tourist.

[Corporateburnout]

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Originally Posted by nun Wow, I live in Boston and paid $6k on my two family home last year. The appraised value is $575k and I also get $15k in rent from the ground floor apartment.

Our state was unfairly labeled "taxashusetts" as it has reasonable RE taxes, sales tax @6% and income tax rate of 5.3%. Damn if it wasn't for the high property values, high cost of living, high food costs, high entertainment cost, high long term care cost it would be a great place to live

[Corporateburnout]

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Originally Posted by marko Massachusetts property tax: $8500. Need to withdraw $9000 from IRA just to pay the 5.3% income tax in order to pay the property tax. (Prop tax not deductible for state taxes.)

This is pretty high for MA. You must live in the ritzy side of town

[bondi688]

Quote:

Originally Posted by Corporateburnout Our state was unfairly labeled "taxashusetts" as it has reasonable RE taxes, sales tax @6% and income tax rate of 5.3%. Damn if it wasn't for the high property values, high cost of living, high food costs, high entertainment cost, high long term care cost it would be a great place to live

You forgot to include the courteous road warriors and the confusing layout of roads built over former cowpaths.

[Corporateburnout]

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Originally Posted by bondi688 You forgot to include the courteous road warriors.

I did. How do I forget to mention the best and most considerate drivers in the country?

[FIREd]

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Originally Posted by clifp Here are some data points from the states I am familiar with. I've purchased/sold three 2,000 square foot houses in the last dozen years. The CA and HI house are according to Zillow virtually the same value. $875K. The Las Vegas house 100K. The Vegas house is the newest and nicest. The location of the HI house is by far the best. The CA and HI neighborhoods are comparable upper middle, while the NV neighborhood is middle class. Property taxes CA $6,000 HI $2,600, NV $800 Sales Tax NV 8.1% CA 8.4% HI 4.65% but since Hawaii taxes is an excise tax and applies to everything including services like lawyers, plumbers, food and even rent the effective rate is much higher roughly double. Making sales tax in all three states comparable. Nevada has no income tax. For a couple making 100K the marginal rate is 8.25% in HI and 9.3% in CA, however HI taxes lower incomes more heavily. Hawaii doesn't tax a lot of retirement income. Overall I'd estimate that retired couple with 100K in income would pay roughly $4,000 in either state in income tax. So from a tax perspective it you'd pay an extra $9,000 to live in California, and $6,000 to live in Hawaii than a low cost state like NV. Along with a higher cost of living in both states. Like Shawn says it isn't clear to me what services that I get/got in Hawaii or California that I don't get in Nevada. All in all, I've actually found Nevada government more responsive.

Don't forget the California State Disability Insurance, 1% deducted from all taxable wages up to ~$100K.