Saturday, April 30, 2016

StateTaxes—All Things Considered

Figure 1.  Top 10 states in the US with the highest tax burden 


As Harry Dent said in his article:
Like It Or Not, It's The Democrats' Era And Your Taxes Are Going Up

Assuming his prediction is correct, in which state, should a retiree reside to reduce his/her tax burden?



State Taxes


There are three major state/local taxes to be considered:
  1. State income tax
  2. Sales/local tax
  3. Property tax

In a map, AARP has shown nicely which states do not have income tax, sales tax or taxes on social security.

When a state comes to raise its revenues, each could be very different —except in each being heavily dependent on one main source of tax. For example,  Oregon state— which has no sales tax — relies far more heavily on income taxes than any other state (see below chart —click to enlarge).


Comparing states for overall tax burden is a bit tricky and sometimes confusing.  Based on different consensus, survey year, methodology used in comparison, you may get different rankings.  For example, see the rankings based on different categories:

Median Real Household Incomes


 Real median household income is among the most important measures of economic well being.  Read [4] for what real median household income is. 

A clearer picture emerges when we divide households by age groups. The graph below, by Doug Short, shows this breakout, and note especially the approximately 50% decline in income for the retired age cohort.

In below article
its ranking is based on the effective tax rate for single taxpayers earning a taxable income of $50,000. Maybe it can be used as a guideline for a retiree's consideration.





References

  1. Like It Or Not, It's The Democrats' Era And Your Taxes Are Going Up
  2. Taxes like Texas: Washington’s system among nation’s most unfair
  3. State and Local Sales Tax Rates in 2016 (Tax Foundation)
  4. Would The Real 'Real Median Household Income' Please Stand Up?
  5. Most Tax-Friendly States in the U.S.
    •  1. Delware 2. Wyoming 3. Alaska 4. Louisiana 5. Alabama 6. Mississippi 7. Arizona 8. New Mexico 9. Nevada 10. South Carolina
  6. Which States Tax Social Security Retirement Benefits?
    • Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Rhode Island, Utah, Vermont and West Virginia.
  7. Top 15 Most Tax-Friendly States for Retirees
    • 1. Alaska 2. Wyoming 3. Nevada 4. Mississippi 5. Georgia 6. Delaware 7. Arizona 8. Louisiana 9, South Dakota 10. Florida 11. Pennsylvania 12. South Carolina 13. Kentucky 14. Colorado 15. Arkansas 
  8. States With the Highest (and Lowest) Property Taxes
    • 1. New Jersey 2. Illinois 3. New Hampshire 4. Connecticut 5. Wisconsin 6. Texas 7. Nebraska 8. Michigan 9. Vermont 10. Rhode Island 11. New York 12. Ohio 13. Pennsylvania 14. Iowa 15. Kansas 16. South Dakota 17. Maine 18. Massachusetts 19. Minnesota 20. Alaska 21. North Dakota 22. Maryland 23. Washington 24. Oregon 25. Florida 26. Missouri 27. Georgia 28. Oklahoma 29. Nevada 30. Montana 31. Indiana 32. North Carolina 33. Kentucky 34. California 35. Mississippi 36. Arizona 37. Virginia 38. Tennessee 39. Idaho 40. New Mexico 41. Utah 42. Arkansas 43. Wyoming 44. Colorado 45. West Virginia 46. South Carolina 47. Delaware 48. Louisianan 49. Alabama 50. Hawaii
  9. The Best And Worst States For Taxes
    • Big three: income , sales and property taxes
    • 1. Wyoming 2. Alaska 3. South Dakota 4. Texas 5. Louisina 6. Tenessee 7. New Hampshire 8. Nevada 9. South Carolina 10. Alabama 11. Mississippi 12. Oklahoma 13. Montana 14. New Mexico 15. North Dakota 16. Georgia 17. Arizona 18. Missouri 19. Colorado 20. Florida 21. Virginia 22. Iowa 23. Utah 24. Washington 25. Kansas 26. Nebraska 27. Idaho 28. Kentucky 29. Indianna 30. Michigan 31. Haiwaii 32. West Virginia 33. Ohio 34. North Carolina 35. Oregon 36. Delaware 37. Maine 38. Illinois 39. Arkansas 40. Massachusettes 41. Pennsylvania 42. Vermont 43. Rhode Island 44. Maryland 45. Minnesota 46. Wisconsin 47. California 48. Connecticut 49. New Jersey 50. New York
  10. 15 States with the Highest Property Taxes
    • 1 New Jersey 2 Illinois 3 New Hampshire 4 Wisconsin 5 Texas 6 Connecticut 7 Nebraska 8 Michigan 9 Vermont 10 Rhode Island 11 New York 12 Ohio 13 Pennsylvania 14 Iowa 15 Kansas
  11. States With the Highest (and Lowest) Property Taxes
    • 1. New Jersey 2. Illinois 3. New Hampshire 4. Connecticut 5. Wisconsin 6. Texas 7. Nebraska 8. Michigan 9. Vermont 10. Rhode Island 11. New York 12. Ohio 13. Pennsylvania 14. Iowa 15. Kansas 16. South Dakota 17. Maine 18. Massachusetts 19. Minnesota 20. Alaska 21. North Dakota 22. Maryland 23. Washington 24. Oregon 25. Florida 26. Missouri 27. Georgia 28. Oklahoma 29. Nevada 30. Montana 31. Indiana 32. North Carolina 33. Kentucky 34. California 35. Mississippi 36. Arizona 37. Virginia 38. Tennessee 39. Idaho 40. New Mexico 41. Utah 42. Arkansas 43. Wyoming 44. Colorado 45. West Virginia 46. South Carolina 47. Delaware 48. Louisianan 49. Alabama 50. Hawaii
  12. 10 Major Cities With the Highest Sales Tax
    • 1. Seattle, WA 2. Oakland, CA 3. Chicago, IL 4. Memphis, TN 5. Nashville, TN 6.Los Angeles, CA 7. Long Beach, CA 8. New Orleans, LA 9. New York, NY 10. San Jose, CA, San Francisco, CA (tie)
  13. 10 Cities That Pay Some of the Highest Taxes in America
    • 1. Philadelphia, PA 2. Bridgeport, CT 3. Newark, NJ 4. Milwaukee, WI 5. Detroit, MI 6. Providence, RI 7. Baltimore, MD 8. Los Angels, CA 9. Portland, ME 10. Columbus, OH
  14. 15 Worst States for Taxes on Retirees
    • 1. Vermont 2. Connecticut 3. Rhode Island 4. Minnesota 5. Oregon 6. Montana 7. California 8. Nebraska 9. New Jersey 10 New York 11 Massachusetts 12. Utah 13. Indiana 14. Maine 15. North Dakota
  15. Kiplinger Tax Map
  16. The Worst States For Taxes
    • 1. New York 2. New Jersey 3. Connecticut 4. California 5. Wisconsin 6. Minnesota 7. Maryland 8. Rhode Island 9. Vermont 10. Pennsylvania 11. Massachusetts 12. Arkansas 13. Illinois 14. Maine 15. Delaware 16. Oregon 17. North Carolina 18. Ohio 19. West Virginia 20. Hawaii 21. Michigan 22. Indianan 23. Kentucky 24. Idaho 25 Nebraska 
    • Based on the effective tax rate for single taxpayers earning a taxable income of $50,000.
  17. Most Tax-Friendly States in the U.S.
    • 1. Delware 2. Wyoming 3. Alaska 4. Louisiana 5. Alabama 6. Mississippi 7. Arizona 8. New Mexico 9. Nevada 10. South Carolina
  18. Federal Estate Tax (Death Tax) Planning
  19. 10 Worst States in America to Make a Living in 2016
    • 1. Hawaii 2. Oregon 3. West Virginia 4. Maine 5. California 6. Vermont 7. New York 8. Montana 9. South Carolina 10. Rhode Island
  20. The 10 States People Are Fleeing
    • 1. New Jersey 2. New York 3. Illinois 4. Connecticut 5. Ohio 6. Kansas 7. Massachusetts 8. West Virginia 9. Mississippi 10. Maryland
  21. Tennessee To Become Income-Tax-Free State No. 8
    • “A lot of seniors come to Tennessee, and they get a surprise: We have a tax on people who have done things correctly by saving for retirement,” says Friday Burke, an enrolled agent in Brentwood, Tenn.
  22. 9 Worst U.S. States To Retire
    • 1. New York 2. Washington D.C. 3. California 4. Oregon 5. Hawaii 6. New Jersey 7. North Carolina 8. Minnesota 9. Illinois
  23. The Most Tax-Friendly States in the U.S. (Methodology used)
    • 1. Wyoming 2. Alaska 3. Florida 4. Nevada 5. Arizona 6. Louisiana 7. Alabama 8. South Dakota 9. Mississippi 10. Delaware 11. 
  24. Home Sales Showing Signs Of Stress
  25. What Americans pay in state income taxes, ranked from highest to lowest
    • California⤑Maine⤑Oregon⤑Minnesota⤑Iowa, New Jersey⤑Vermont⤑Washington, DC⤑ New York⤑ Hawaii⤑ Wisconsin⤑ Idaho⤑ South Carolina ⤑ Connecticut⤑ Arkansas⤑ Montana⤑ Nebraska⤑ Delaware⤑ West Virginia⤑ Georgia⤑ Kentucky⤑ Louisiana⤑ Missouri⤑ Rhode Island⤑ Maryland⤑ North Carolina⤑ Virginia⤑ Oklahoma⤑ Massachusetts⤑ Alabama⤑ Mississippi⤑ Utah⤑ Ohio⤑ New Mexico⤑ Colorado⤑ Kansas⤑ Arizona⤑ Michigan⤑ Illinois⤑ Indiana⤑ Pennsylvania⤑ North Dakota
    • Seven US states have no state income tax — Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. 
    • New Hampshire and Tennessee don't have a state income tax either, but they do tax interest and dividends at 5% and 6%.
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