Top 10 Worst Tax States for Retirees

[PaddyMac]

Interesting how the tax-friendly states are mostly hot and humid. I don't think you can ever compare states to retire to without looking at the big picture - I would gladly pay more in taxes to have a dry heat and lots of artists nearby etc. Was reading a magazine in the doc's office today called Places to Retire (I think it was called - if not, something similar). Everyone who commented on why they picked that place in particular mentioned the weather, how friendly the people were, things to do, etc. I don't remember any mention of taxes!

 

[meierlde]

Also you have to look at what the sales tax applies to. In Texas, Groceries, prescription and non prescription drug are not taxable. There are also a couple of 'sales tax holidays' prior to back to school on clothing, school supplies and such. Also you have to consider the state tax vs a stat+municipality tax. Many areas in Texas do not have the municipality tax. Also property taxes vary. In my area we have a Municipal Water District, with a high tax, low property values, no municipality tax, no income tax, property tax frozen for over 65 (both county and school). Bottom line, however, while I believe the cost of government is significantly lower than say CA. or NY. it is most likely not far off of most states. And, DW ain't moving so it is really a mute point.

To boot you can to some extent control property taxes by choosing not to live within city limits (easier outside the metro areas), of course you do get to pay for trash collection. Its a good bit harder near metros because if you buy in a development it will likley be in a Municipal Utility District. City taxes can increase the tax bill by 1/4 easily.

 

[calmloki]

Interesting how the tax-friendly states are mostly hot and humid. I don't think you can ever compare states to retire to without looking at the big picture - I would gladly pay more in taxes to have a dry heat and lots of artists nearby etc....

Wyoming.
"I would gladly pay more in taxes to have a dry heat and lots of antelope nearby etc..." FTFY

 

[Alan]

Louisiana is listed as one of the 10 tax friendly States, which may well be true if you live there, but I'm retired, not living in Louisiana and it isn't very tax friendly to me. About 40% of my pension income comes from the company in Louisiana I used to work for. It is a non-qualified pension and I don't pay FICA or Medicare, but I do have to pay LA State income tax on that income.

 

[ShokWaveRider]

Notice how most are freezing cold in the winter, so what do you expect?

SWR

 

[kcowan]

I think you pick the place where you think you will be happiest and then deal with taxes. I have a friend who bought a place in Ireland for its 8% tax rate, tried living there, then sold out (before the meltdown), and decided that paying taxes was worth it!

 

[braumeister]

I think you pick the place where you think you will be happiest and then deal with taxes.

Yep, that's pretty much it.
Alaska is a very tax friendly state for retirees, but people don't often include it in these lists. Maybe something to do with the climate?