taxes by state

[JoeWras]

Many years ago I lived in S. Florida (Palm Beach to Miami area). Many of my neighbors were snowbirds from NY. They lived in FL just enough to show residency and went back up north for the hot months.

I hated it.

I didn't like not having full time neighbors. I was trying to lay down roots, and ironically both the young people (looking for work) and the old people (snowbirds) had no roots. It was not fun to live there full time. Although I admit come this time of year (May), it was great because we finally got the place to ourselves.

Anyway, now that I'm on the other side, I wonder how it would feel to be a snowbird? Not sure I could live there 100% time due to heat and hurricanes. But some days when I pay my state tax bill, I yearn for my days in the Sunshine state.

BTW cj: many municipalities in NC already have a rain tax (impermeable surface/waterway improvement) tax. We're ahead of you. Our councilpeople say they got the idea from some other city. Maybe you got it from us. But you are behind.

 

[eridanus]

The retirement tax would be hard to stomach but, really, griping about gas taxes? Gas taxes are a pass-through tax. They're used (and then some) for infrastructure such as...roads and bridges. You people drive on non-toll roads, don't you?

 

[cj]

The retirement tax would be hard to stomach but, really, griping about gas taxes? Gas taxes are a pass-through tax. They're used (and then some) for infrastructure such as...roads and bridges. You people drive on non-toll roads, don't you?

Of course I drive on roads. But in Maryland, they never use the taxes for what they are intended. We pay gas taxes already, which supposedly go into the transportation fund. However, they have raided it time and again for other purposes, and voila - not enough taxes for roads and bridges. In the discussion for the additional 20 cents, they discussed putting the new $$ into a "lock box", only to be used for transportation, but that provision was removed in the final bill. So there is no guarantee that the gas tax will be used for roads and bridges.

Don't get me started, or this will have to be moved to the politics section.

 

[Andre1969]

The retirement tax would be hard to stomach but, really, griping about gas taxes? Gas taxes are a pass-through tax. They're used (and then some) for infrastructure such as...roads and bridges. You people drive on non-toll roads, don't you?

In Maryland, I think they're used to pad the politicians' pockets!

 

[eridanus]

Of course I drive on roads. But in Maryland, they never use the taxes for what they are intended. We pay gas taxes already, which supposedly go into the transportation fund. However, they have raided it time and again for other purposes, and voila - not enough taxes for roads and bridges. In the discussion for the additional 20 cents, they discussed putting the new $$ into a "lock box", only to be used for transportation, but that provision was removed in the final bill. So there is no guarantee that the gas tax will be used for roads and bridges.

Don't get me started, or this will have to be moved to the politics section.

Ah, that makes more sense. It's just a disguised general revenue tax.

 

[meierlde]

As pointed out one of the variables to consider relates to how much house one wants to buy. In Tx for example although there is no state income tax property taxes are higher, so if you want to live in a desirable area in a metro you will pay more. Live in the country and pay less, but the size of house will make a big difference (since that does relate to the assessed value and thus the taxes). Now the school taxes are essentially equalized across Tx one of the issues then is do you live in an incorporated area or an unincorporated area. (Although then one has to offset the cost of trash pickup say 450-500/year against the city taxes if they don't charge a trash fee).

 

[JoeWras]

As pointed out one of the variables to consider relates to how much house one wants to buy. In Tx for example although there is no state income tax property taxes are higher, so if you want to live in a desirable area in a metro you will pay more. Live in the country and pay less, but the size of house will make a big difference (since that does relate to the assessed value and thus the taxes). Now the school taxes are essentially equalized across Tx one of the issues then is do you live in an incorporated area or an unincorporated area. (Although then one has to offset the cost of trash pickup say 450-500/year against the city taxes if they don't charge a trash fee).

Yes. One of the things I liked about FL was the real estate taxes were not horrible either. Not sure if that's changed.

But beware! Water costs more. Insurance was sky high. FL is in a corner of the country, so if you want to travel, to other parts of the USA, it is more time and money. Etc.

There are many, many variables to take into consideration.

 

[ERhoosier]

I'm generally of the opinion that most states will get their tax $$ out of ya somehow (combo income/property/sales/etc), and some will [-]suck the life blood out of ya[/-] tax more heavily. As was said, sometimes local taxes can be VERY significant. That said, it is also important to look at budget deficits for an idea of where taxes are likely to go up to meet gov't "needs"-
State Budget Gaps: How Does Your State Rank?

Would be counter-productive to move to a lower tax state only to have taxes skyrocket after you became a resident

 

[prototype]

Maybe I just missed it, but I saw no specific mention of local tax variations (e.g. county and municipal) as a factor. In my case (Virginia – state tax wise on the upper side of the middle of the pack of states (30th ? maybe). I live in NOVA (Fairfax County to be specific) and state allows localities to levy additional taxes and fees on certain items. I’ll use gas as an example, I don’t know the specific amount but gas is always 30 to 40 cents cheaper when I get a couple counties out. Property taxes are typically 30 cents per $100 lower (e.g. ~$0.80 vs $1.12) a few counties out (varies by county/municipality) . Fees for any home work/upgrades that require permitsand inspections from the county are lower. And most things are less expensive such as haircuts, car repairs/mechanics, home repairs/maintenance (assuming you are not a DIYer).

I know, people live in the D.C suburban area because the high paying jobs are here. But now that I am retired and don’t have to worry commuting I am looking at moving within state, just away from the high tax, high cost of living area of Northern Virginia. I can move few counties out, and I am still be near friends and family while still reasonably close to DC (not that I go down there often) and Dulles airport, plus everything is so much cheaper (taxes, services, more house for the money).

I just wanted to throw in that it may be just more the state tax rates on income, pensions, 401k/IRA withdrawals…, but the locality of the state you are in may be another factor also.

I imagine things are much the same when you retire/live in any prosperous metropolitan area (e.g. NYC area). I do agree with everyone posted that it’s more than just the tax/cost of living that needs to be factored in when making a move decision (e.g. family, friends, social and life style factors.)

 

[LoneAspen]

There are places in the United States that you could PAY me to live there (not just no taxes, but PAY me), and I wouldn't.

State and local taxes are just one data point among many when deciding where to live.

For example, Florida. I have family in Florida, and I enjoy visiting them sometimes. But I have zero desire to live there. Somebody could give me a nice home there and PAY me to live there, and I wouldn't.

 

[JoeWras]

Maybe I just missed it, but I saw no specific mention of local tax variations (e.g. county and municipal) as a factor.

And it doesn't stop at taxes.

Watch carefully the following, most of which are at local level:
- vehicle fees and stickers
- toll roads
- stormwater runoff fees (rain tax)
- garbage fees
- hazardous waste fees
- emergency center (911, etc.)
- water rates
- sewer rates
- local school districts
- local fire districts

A lot of these things are not always listed on those national tax stories. Some are insidious. My municipality is loath to raise taxes, so they keep adding new items to our water bill like hazardous waste and stormwater fees. When they do that, you can't deduct them either.

It gets complicated.

 

[Brat]

...
Net net, financially there would be some modest savings in moving from NYC to a lower tax location. These are not a big deal in the short run, but they would certainly add up over time. Measured against the "costs" of leaving friends behind, proximity to family, and some lifestyle issues, it is a tough call for now.

I plan to make the most of the summer in NYC and make a decision later this year.

Over time the most important factors are friends and family. Don't move.

 

[cj]

There are places in the United States that you could PAY me to live there (not just no taxes, but PAY me), and I wouldn't.

State and local taxes are just one data point among many when deciding where to live.

For example, Florida. I have family in Florida, and I enjoy visiting them sometimes. But I have zero desire to live there. Somebody could give me a nice home there and PAY me to live there, and I wouldn't.

I'm totally with you on that one. I have had family in Florida for almost 40 years. I've never really liked it there.

 

[walkinwood]

I found the cost of living calculator at Cost of Living Comparison to be a good place to start.

 

[ChrisC]

If taxes were the most important factor, we'd probably wind up in states we would have no other interest in living there. More important to us are climate and seasonal changes, mortality rates, health care, proximity to family or friends (geographically or next to first rate transportation centers) good cultural and health care facilities, and anyplace that would make my wife happy. If it were me, I'd be in NYC. But that would be a nonstarter for my wife. Funny, but where we currently live satisfies most of our criteria; yet, it makes neither of us happy. We're looking at NC where tax rates are very good for us.

 

[jerome len]

I'm amazed that we have heard so little about California; 10% to 13% income tax, 9% sales tax, high property taxes and a million little fees, assesments etc. Cost of utilities are high, nothing, as far as I can see, except fresh produce is cheap.

I pay a 4.25% income tax and have some distant family that live in California. Pay scales there are a little higher but it is expensive. Yet, none will leave....they love the weather, lifestyle and California is almost like its own country.

So.....it's hard to believe but life is more than taxes........for me I'm willing to pay my taxes....in spite of a hard winter.......it's all about friends, family, favorite restaurants, knowing my Doctors, etc.......great post......could we hear from the folks in California?

 

[M Paquette]

So.....it's hard to believe but life is more than taxes........for me I'm willing to pay my taxes....in spite of a hard winter.......it's all about friends, family, favorite restaurants, knowing my Doctors, etc.......great post......could we hear from the folks in California?

OK. The state is full. And we have earthquakes, poisonous spiders, wildfires, and the dreaded Flying Rats, er... seagulls. And zombies. Mustn't forget the undead. Makes them cranky. Oh, and did I mention earthquakes? Great yawning chasms, cities falling into the sea, and the risk that they'll trigger one of the volcanoes. For more on these risks, see the documentary film "Volcano". http://www.imdb.com/title/tt0120461/

On taxes... I'm ER, but have a decent income. (I won't be getting PPACA subsidies) On the last round of tax returns, my Federal effective rate was zero (0) percent, and the California effective rate I paid was four tenths (0.4) percent. Property taxes are capped at one percent of what I paid back in the late 80's, and can be adjusted upward a maximum two percent a year. Sales tax is just over eight percent where I live, and groceries are not taxed.

On utilities, for last month:
$93 gas & electric
$34 water & sewer
$46 garbage, recycling, and yard waste pickup
$0 snow plow service
$7.40 Sunblock lotion

 

[Brian99]

California. Yes an incredibly inefficient government has dominated the state for decades. Fire, earthquakes, drought. And depending on location - wall-to-wall development and people. Taxes, fees galore.

After migrating here as a young adult, the thought of returning To the MidWest was considered frequently. But through the years you become attached to the scenery, excitement and weather. Now, I would not consider a place with high humidity. Neighboring states (AZ especially) have been considered. But it seems we will likely move to a less densely populated part of CA.

Our taxable income will be substantially reduced in RE, which will ease the state tax burden.

But mostly it is the weather, beauty and access to the coastline that will keep us here.

 

[steelyman]

I don't see any reason to live in California except to be able to say, "I live in California". I've heard that many times (usually followed by how much they pay). To be fair, I'm looking forward to moving away myself from where I am.

 

[FIREd]

Moving to California from a low tax state in the southeast, I thought that the high CA taxes would be a hard pill to swallow. But it wasn't, even though our income is quite high (our CA effective tax rate was 8.1% last year and expected to be higher this year). At this point, higher taxes are more than offset by quality of life improvements. Not to say that we will stay here forever, but if we move out it probably won't have anything to do with taxes.

 

[steelyman]

I was thinking of starting a new thread on this, but maybe it belongs more in this existing one. The main issue I am talking about is traditional->Roth conversions, which I've never done since the first year Roth IRAs were available (I think that was 1998, and I came across an article that said you could double your contribution by starting a Roth in '98, opening up a traditional for '97 and immediately converting it, which I did but back then I think the annual limit was the princely sum of $2K).

Anyway, if all goes to plan, I will be moving from a state (IL) that does not tax the standard retirement sources including 401k/403b/457/IRA at all. I'm looking to move to a state that does (I'm moving because it's somewhere I've long wanted to live).

I have retirement accounts, mainly employer-type ones but not all, and there's a mix of standard and Roth accounts in there. I was thinking about this today and thought it might be good to do a conversion to a Roth before changing residency. I can't convert all of it because I'd like to stay within the 25% Federal marginal rate, but even a portion without state taxes seems like a good idea to me. But maybe I'm missing something, so that's why I'm dropping back to pass. Previously, I hadn't considered doing any conversions at all.

Related (but only barely) is that if one is doing only a partial conversion, does it matter which investments you move? It seems to me that those more likely to grow over time (e.g., stocks) would be preferable to those that are more steady (e.g., bonds).