States with no income tax

[Moemg]

No, I wasn't joking Florida is considering eliminating property taxes and raising the sales tax to 8.5%.At the very least they are going to roll back property taxes .Right now it's a crazy system .Nobody wants to move because of the hit they would take on property taxes .I pay $5,000 but if I sell the person who buys my house would be paying $12,000.If I decide to downsize I would end up paying less for the house and more for the taxes.

 

[Bikerdude]

States are going to get their money one way or another. If there are no income taxes, property taxes or sales taxes will be high, and if there is no sales tax, then income taxes or property taxes will be high, and so on.

The problem with an income tax vs. other forms is that the politicians get a tax increase each year without having to ask for it. You get a raise, the State gets a raise every year forever. With other forms of tax they have to battle it out in public and take the heat for it or push it down to the towns for property tax increases. If I had a choice I would vote for making it as difficult as possible to raise taxes.

 

[audreyh1]

Texas has no income tax but property taxes are horrible -- essentially equal to the typical mid-west income tax/property tax combo. My FIRE plan is to maintain a Texas address without property and "travel" which would avoid both taxes.

That's what I do - living in an RV. The worst thing was I had to pay a extra &%*()_)$ 1% "diesel" tax on my motorhome purchase, a tax that was NEVER intended to be applied to recreational vehicles, and one that was promptly rescinded the year after I bought mine!

But Texas real estate is pretty low valued compared to the east and west coasts and the NE US. So even though the tax rates are high, the actual value paid never seemed that high for me. You can live in a pretty nice house in a big city suburb for only $150,000.

I know lots of articles estimate total taxes paid per state by retirees, but they seem to assume high property value, and low taxable income. If taxable income is high - even if from investments alone - those state income taxes can quickly outgrow property taxes.

Audrey

 

[REWahoo]

But Texas real estate is pretty low valued compared to the east and west coasts and the NE US. So even though the tax rates are high, the actual value paid never seemed that high for me.

When my monthly property taxes hit $500 on a $200k house, they not only seemed high, they were. I stayed in TX but moved from the city to an unincorporated area where taxes on a $200k house are around $350/month. That still seems high to me, and unlike your one-time diesel tax, it goes on and on and on.

Look out! Damn scorpions...

 

[lrak]

When my monthly property taxes hit $500 on a $200k house, they not only seemed high, they were. I stayed in TX but moved from the city to an unincorporated area where taxes on a $200k house are around $350/month. That still seems high to me, and unlike your one-time diesel tax, it goes on and on and on.

You could always move to MA where the taxes are still $500/mo but the same house costs $400k instead of $200k. That way the tax rate is lower.

 

[lazygood4nothinbum]

Florida ,No income tax and maybe no property taxes in the future!

with various plans on the table and one being rushed through by the republicans, talk is not to eliminate property tax but to reduce them by about 20-30 percent which will likely raise sales tax by $.02. and even if state tax were eliminated you would still have local taxes, school board, etc. on your property tax bill. school board is the highest percentage of my property tax bill each year.

I hope your right. This is one screwed up state when it comes to property taxes. I have the same house as my neighbor except he has a pool. His taxes are $3800 and mine are 8K. He was here 3 years earlier and the homestead exemption saved him. This is why more people are leaving than coming to Florida.

but how will you feel in 10 years when you are paying $8k and your neighbor is paying $20k for the same house? i voted for & still like the "save our homes" amendment. a lot of us who paid taxes for a decade or two or three would have lost our homes in the last five years weren't it for this stopgap measure.

as to more people are leaving than coming, all the studies i've read show just the opposite. if i remember right, the last study i read shows that though we dropped from being in the top three growth states we are still the 7th fastest growing state.

here's one showing that over the next 50 years population is projected to grow from 18 to 36 million. of course, as mentioned, if greenland melts, it is anyone's guess. but barring world catastrophe, i don't see any let up in the traffic here.

BTW

Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. Two others, New Hampshire and Tennessee, tax only dividend and interest income.

actually florida recently repealed the intangible tax law. early retirees, come on down.

Nobody wants to move because of the hit they would take on property taxes .I pay $5,000 but if I sell the person who buys my house would be paying $12,000.If I decide to downsize I would end up paying less for the house and more for the taxes.

this simple solution to this would be to make the soh value portable.

 

[RP]

Interesting how several comment on Florida supposedly rolling back property taxes. I've lived in a number of states, Florida not one of them, but I never paid property tax to a state on a home. To a county and city? Yep, for sure. And in the states I have lived in 9and in states I am aware of the system workings) the state doesn't set homeowner property taxes. I'm interested in how this state reduction idea would/could be implemented.

BTW (damn I sound like a promoter for Colorado now), the last house I owned there, would be about $170K or $180K in today's market and easiy a $400K house in Massachusetts from what I have seen .. property tax in city (Colorado Springs) about $2000 per year ... wanna move?

 

[73ss454]

Lazy, well I'll tell you how I'll feel. Everyone should pay the same taxes for the same services. Makes no sense that someone should pay more because they moved in later for the same services. Also the people that lived here are also locked into not being able to move for the same reason. Just plain stupid IMHO.
People can't downsize or move up and are just stuck in an unreasonable system.

 

[lazygood4nothinbum]

Lazy, well I'll tell you how I'll feel. Everyone should pay the same taxes for the same services. Makes no sense that someone should pay more because they moved in later for the same services. Also the people that lived here are also locked into not being able to move for the same reason. Just plain stupid IMHO.
People can't downsize or move up and are just stuck in an unreasonable system.

so can i just as easily argue that since i have been paying for 30 years to put the infrastructure in place so that you can enjoy your recent retirement here and pay the same taxes i'm paying, that i can charge you rent? or do you really think recent developments have payed their fair share of impact fees? i think this could be argued in both directions into infinity.

people would be better able to downsize if, as i already stated, they simply made soh portable.

Interesting how several comment on Florida supposedly rolling back property taxes. I've lived in a number of states, Florida not one of them, but I never paid property tax to a state on a home. To a county and city? Yep, for sure. And in the states I have lived in 9and in states I am aware of the system workings) the state doesn't set homeowner property taxes. I'm interested in how this state reduction idea would/could be implemented

sorry but i'm really not all that financially astute in these matters and so have accessed my 2006 prop tax bill. looks like it all goes to the county and is divided from there. i'll list the breakdown here on a ~$425k house but i'm afraid it is only going to upset 73ss454 even more:

broward county operating $238.05
capital projects 10.48
debt service 18.62
school board gen fund 219.85
capital outlay 118.33
debt service 8.35
sfwmd (water district) 12.51
okeechobee basin 13.79 (everglades restoration?)
everglades c.p. 4.40 ibid
north hospital district 80.67
children svc council 17.94
my muncipality 276.41
debt service 9.85
fl inland navigation (icw, etc) 1.70
assessment fire service 111.53
total (w/paid early discount) $1,096.78
next sucker's tax bill who buys my house $10,000

 

[73ss454]

No matter where you move, services, schools and other things were there before you arrived. Does that mean you should pay more because you got there later. Also if you move from Florida should the people from Florida send you money monthly because your tax money paid for schools, and other services. This is almost silly.

 

[sgeeeee]

Sales tax, income tax, property tax . . . Does it really matter how they get you?

What does matter is the total bill and what you get for it. I live in Arizona where we pay less total state taxes than a lot of places. And we get less to show for it too -- unless you count high scores on dropouts, crime, teen preganancy, illiteracy . . . as great things to show for your tax dollars.

 

[73ss454]

Makes no diff. at all as long as it's fair. Taxes are a fact of life and should be charged in a fair manner.

 

[lazygood4nothinbum]

This is almost silly.

precisely.

soh amendment wasn't voted in to get excessive taxes from new residents. it was instituted to protect those of us, especially those on a fixed income, from being priced out of their own houses. at the time we saw prices escalating, not by the real estate fever taking over this country but simply because florida had come into its own whereby density and population growth was driving up prices. nobody expected our values to increase 30% per year, not even when the speculators came in. so now the legislature is working to rectify what has obviously become out of whack.

but unless property taxes are eliminated, which i doubt they will entirely be, then soh is still desireable because this is still a growth state, urban & outlaying areas will still see densification, and prices will still rise. people will still need some form of protection from being tossed out of their homes. this would not even be an issue in a non growth state or one losing population. it is an issue where population increases and land is dear.

 

[73ss454]

Tell my why you think you should be protected. Why are you special? Do you really think it's a fair way to tax? Can you tell me any other place that taxes are charged this way?

If a law is voted on only by the people it protects it will surely pass. So everyone else should be screwed. As long as your protected it must be good. You win!

Last post on this subject.

 

[lazygood4nothinbum]

Can you tell me any other place that taxes are charged this way?

california.

and if other growth states like texas, nevada and arizona didn't have so much undeveloped land, it would be an issue there as well.


edit:

If a law is voted on only by the people it protects it will surely pass. So everyone else should be screwed. As long as your protected it must be good. You win!

once anyone declares homestead. they are also protected from the point at which they declare homestead. home free home free home free all.

 

[Outtahere]

You could always move to MA where the taxes are still $500/mo but the same house costs $400k instead of $200k. That way the tax rate is lower.

You're not far from the truth. When dh and I met we both had homes of our own, his in NH mine just over the border in MA, both about the same value, his taxes were half what mine were. Fast forward 10 years and he was paying double what I was when he sold it, he was glad to get out of NH.

 

[Targeting40]

SOH is currently being challenged in court and I predict it will be proved unconstitutional this year. When SOH was originally approved for the Florida ballot 3 of the 4 Supreme Court justices voted against the measure stating it would eventually become unconsitutional as property values increased. The only way it would be constitutional is to cap EVERY PROPERTY at the same rate. Or if you applied it to a specific group of people, such as Seniors, as it was originally intended then it would also pass consitutional muster.

 

[73ss454]

SOH is currently being challenged in court and I predict it will be proved unconstitutional this year. When SOH was originally approved for the Florida ballot 3 of the 4 Supreme Court justices voted against the measure stating it would eventually become unconsitutional as property values increased. The only way it would be constitutional is to cap EVERY PROPERTY at the same rate. Or if you applied it to a specific group of people, such as Seniors, as it was originally intended then it would also pass consitutional muster.
[/quote

Take it easy your going to make Lazy nervous.

 

[lazygood4nothinbum]

SOH is currently being challenged in court and I predict it will be proved unconstitutional this year. When SOH was originally approved for the Florida ballot 3 of the 4 Supreme Court justices voted against the measure stating it would eventually become unconsitutional as property values increased. The only way it would be constitutional is to cap EVERY PROPERTY at the same rate. Or if you applied it to a specific group of people, such as Seniors, as it was originally intended then it would also pass consitutional muster.

though i don't know the tax ramifications, i personally have no problem with capping all existing owners. haven't heard anything about this. how is it that something would be constitutional at $1 but unconsititutional at $2?

 

[lazygood4nothinbum]

Take it easy your going to make Lazy nervous.

nah. my fire plan calls for selling in 5 years. no dirt out of my garden.

 

[Bikerdude]

Sales tax, income tax, property tax . . . Does it really matter how they get you?

What does matter is the total bill and what you get for it. I live in Arizona where we pay less total state taxes than a lot of places. And we get less to show for it too -- unless you count high scores on dropouts, crime, teen preganancy, illiteracy . . . as great things to show for your tax dollars.

We pay through the nose in CT for State and local tax. $6,000 for a $300K house plus 5.5% income tax plus 6% sales tax plus highest gas tax. We have crappy education, high city crime, crack babies and traffic problems. And the answer is always "we need more money". For the last 50 years I've been here "more money" has produced more problems and less for "working" people in every case.

Middle class and retired people are moving out (tax payers). Emigrants, uneducated non English speaking are moving in for the generous social services. We know which party is gaining voters.

As the ratio continues to change, taxes have to go up for the people left behind who for what ever reason can't move to a less expensive State. If this continues, as I expect it will, there will continue to be a Blue state to Red State transfer of population going forward. Ct is currently scheduled to lose a seat in Congress in the next 2 years.

This is not a statement just an observation.

 

[Brat]

I might welcome an income tax here. As long as it hits workers more than retirees, it should be a net benefit for us (assuming sales tax and property taxes go down).

I wonder how life is down in the southern portion of WA. No income tax, and a short drive to OR with no sales tax.

WA residents who work in Oregon pay Oregon income tax. It used to be that SW WA residents shopped in OR almost exclusively. Now the traffic on the interstate bridge is so bad (and gas prices so high) they seem to be buying mostly high-ticket items in OR. The Costco with the highest sales/sq ft is the one on the south side of the Columbia River near PDX.

When I moved to WA and did consulting gigs I discovered that WA has a gross receipts tax on businesses.

 

[donheff]

Tell my why you think you should be protected. Why are you special? Do you really think it's a fair way to tax? Can you tell me any other place that taxes are charged this way?

DC holds owners real property taxes to a maximum 10%/year rise. Buyers pay the full rate. When we have markets like 2000-2005 the rise could force low and fixed income owners to sell and move out of town. New buyers already have the choice to decide where and when to go. Now that the market has cooled, the rates will slowly equalize - but we have a little time and possibly inflation assistance to help with the bump up. It seems fair enough to me.

 

[Brat]

In Multnomah County in Oregon the property taxable value increase of a home is 3%/yr. New construction or condo conversion sets the start point. Big advantage for homes 7 years or older as there has been a huge run-up in real estate prices.

 

[Bimmerbill]

True NH has no sales tax or income tax. But, they make up for that with high property taxes.

I pay $5000 yearly on a house valued at $259K by the tax office. The vast majority of that is school tax.