Political Opinion

The Lobby
15309

Pros and Cons of Living in a State With No Income Tax

Every U.S. citizen is responsible for paying federal income tax, and some taxpayers also must pay a separate state income tax. As of 2023, just nine states don’t impose any additional income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming.

At first glance, it might seem as if there’s no reason to live in a state with income tax, as it simply adds an additional financial burden to your budget. But there are both pros and cons to living in a state with certain tax advantages.

Pro: You’ll Have To Pay Only Federal Income Tax

The top federal income tax bracket is 37%. If you find yourself in that bracket, you’ll already be forking over a significant amount of your income to the federal government. Adding state income tax on top of that, especially in a high-tax state like California, can push your total income tax bill to over 50%. Rates like that are enough to push some high earners away from high-tax states like California to no-tax states like Texas.

Con: Other Taxes Might Be Higher

States that have no income tax aren’t excessively wealthy and benevolent. They simply have a different structure for raising revenue. With no income tax dollars coming in, these states must get that revenue from other sources.

Typically, this translates to higher sales taxes, property taxes and/or gasoline taxes. For example, homeowners in New Hampshire and Texas pay some of the highest property taxes in the country, at 1.89% and 1.6%. Washington charges the third-highest gasoline taxes in the country, at 49.4 cents per gallon.

While you might not have to pay state income tax, your overall tax bill actually might end up being higher, depending on your lifestyle. If you don’t own property and you use public transportation, for example, your tax bill likely will be significantly lower. But if you own some expensive real estate and drive a gas-guzzling car for your daily commute, your tax bill could be significant.

Con: Lower Infrastructure and Education Spending

In some cases, having no state income tax does translate to lower revenue for individual states. In turn, this may result in lower state spending on basic services. According to a 2021 analysis by the U.S. Census Bureau, South Dakota and Wyoming — two states with no income tax — spent the least amount on education of all 50 states.

Other states with no income tax revenue may lower spending in other areas, such as infrastructure. As a resident, you’ll have to decide whether that tradeoff is worth it.

Is It Better To Live in a State With No Income Tax?

At the end of the day, whether or not it’s better to live in a state with no income tax depends in part on your personal financial situation — but there are other considerations as well. For example, quality of life and the lifestyle you choose to live are also important.

From a strictly financial standpoint, it’s important to remember that the amount you earn plays a large role in your tax situation. If you’re a single taxpayer living in California and earning $1 million per year, for example, tax rates reach a whopping 13.3%. However, if you earn a low-to-moderate wage, tax rates are not that onerous, even in California. As with any financial question, there’s no black-and-white answer to whether it’s preferential to live in a state with no income tax, as a number of personal factors come into play.

https://www.gobankingrates.com/taxes/tax-laws/pros-cons-states-with-no-income-tax/

15310

I mentioned taxes as a con in the second paragraph, so a pro for those who leave and head to TX or FL.

But I tend to agree with @SmallPaul. The taxes, if not collected as state income tax, are collected by other means.

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15311

Dang, Dennis. I was at .50 till I read that Goldman guy. I’ll split the diff and go with you. 0.25.

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15312

Yes. Tourist tax surcharge on hotels and cars in Florida.

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15313

State governments need to generate revenue somewhere to survive.

15314

Hey @dudebro Another short sighted poster’s attempt to paint a picture by posting selective data… I’m just ignoring all the rest of your waffle…

You know… Earthquake’s, Flood’s, Famine, Plague and Locust’s…

  • The population of California in 2022 was 39,029,342, a 0.29% decline from 2021.
  • The population of California in 2021 was 39,142,991, a 0.91% decline from 2020.
  • The population of California in 2020 was 39,501,653, a 0.16% increase from 2019.
  • The population of California in 2019 was 39,437,610, a 0% increase from 2018.

California’s population demographic… Which displays your claims as BS about the Golden State’s population growth slowing since the early 2000’s…

Facts… Not opinions if you want to play this game!!

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So lets look at REAL Data and see what has really happened since the early 2000’s…

Population growth rolled over the top in 2018 and started to decline from 2020 and beyond… Now what major event took place in 2018 (pre-CV) and started to effect population growth in 2020…

No, no, no, It’s Weather, Fire, Earthquakes, Drought, Cost of living, Housing, Taxes, Employment or everything else but… (D) Gavin Newsome’s term as the Governor in ineffective control…

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15316

There is something in here to make both of you happy.

Richest States 2023

Determining the richest states comes down to the residents’ income and the local state government’s revenue. In this article, we’ll look at each state’s median household income and GDP to determine the wealthiest states in the U.S.

Richest U.S. States by Median Household Income

1. District of Columbia

D.C. has the highest median household income of any state of $92,266. D.C. has the highest educational attainment in the U.S., with 56.6% of adults having a Bachelor’s degree or higher. Despite this, the District still has a relatively high poverty rate of 13.5%.

2. Maryland

Maryland’s median income is the second-highest in the U.S. at $86,738. Maryland also has very high education attainment, with 40.2% of adults having a Bachelor’s degree or higher. Maryland also has one of the lowest poverty rates in the U.S. at 9%.

3. Massachusetts

Massachusetts, known for having high-quality education and high-paying jobs, is the third-richest state in terms of median income. Massachusett’s median income is $85,843. Massachusetts is the most educated state, known for having the second-highest percentage of adults with at least a Bachelor’s degree (43.7%) and the highest percentage of graduate and professional degree holders (32.4%).

4. New Jersey

New Jersey is the nation’s fourth-richest state, with a median household income of $85,751. New Jersey also ranks high for the quality of education and educational attainment among all states, including having the fourth-highest percentage of adults with a Bachelor’s degree at 38.9%. Additionally, New Jersey has the fifth-lowest poverty rate of 9.2%

5. Hawaii

Hawaii’s median household income is $83,102. This is the fifth-highest in the U.S., which is good because Hawaii has one of the highest costs of living of any state. Hawaii’s poverty rate is also relatively low at 9.3%.

Richest U.S. States by GDP

Ranking which states are the wealthiest looks much different than using median household income. GDP can be largely influenced by population, so, as evident below, the states with the largest GDPs tend to be the largest. Of the five richest states, three of the five states’ GDPs line up with their population ranks, except Florida and New York. New York has the third-largest GDP but the fourth-largest population, while Florida has the reverse. We will also note their respective median incomes for comparison.

1. California

California, the nation’s most populous state, has the largest state GDP of $3,120,386,000. California’s median household income is $80,440, the sixth-highest in the U.S.

2. Texas

The country’s second-most populous state, Texas, is also its second-richest state in terms of GDP. Texas’s GDP is $1,772,132,000. Texas’s median household income is $64,034, just below the national median.

3. New York

New York is the third-richest state in the United States, with a GDP of $1,705,127,000. New York’s median household income is the 15th-highest among all states at $72,108.

4. Florida

Florida is the fourth and final state with a GDP of over $1 trillion with $1,111,614,000. Florida’s median household income is below the national median at $59,227.

5. Illinois

Illinois has the nation’s fifth-highest GDP and is the fifth-most populous state. Illinois’s GDP is $785,671,000, and its median household income is $69,187.

Here are the 10 richest states: 2023

  1. New York - $83,388 Democratic

  2. Massachusetts - $82,277 Democratic

  3. Washington - $79,007 Democratic

  4. Connecticut - $78,440 Democratic

  5. California - $77,576 Democratic

  6. Delaware - $75,149 Democratic

  7. Illinois - $68,374 Democratic

  8. Alaska - $68,094 Republican

  9. Maryland - $67,894 Democratic

  10. North Dakota - $66,635 Republican

https://worldpopulationreview.com/state-rankings/richest-states-in-usa

https://en.wikipedia.org/wiki/List_of_current_United_States_governors

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15317

The 10 Poorest States In The United States For 2023

  1. Mississippi Republican

  2. Louisiana Democratic

  3. West Virginia Republican

  4. New Mexico Democratic

  5. Alabama Republican

  6. Arkansas Republican

  7. Kentucky Democratic

  8. South Carolina Republican

  9. Nevada Republican

  10. Michigan Democratic

15318

Nothing else matters when you have Ice Cream… A little Hump Day Humour…

Banking Stock Slide followed by the inevitable dead cat bounce… That’s going to hurt in the morning…

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15320

Fox news viewers didn’t get the memo that this is entertainment, or they can’t comprehend

Dangerous Weirdos as I mentioned before

Social media threats exploded after Tucker Carlson’s Jan. 6 claims, analysis finds

Tucker Carlson’s portrayal of the deadly Jan. 6 attack as a largely peaceful event on his prime-time Fox News show set off a dangerous new wave of social media chatter that includes death threats against Capitol police officers and Democratic leaders, according to experts who monitor extremism and a report from Advance Democracy shared exclusively with USA TODAY.

The segment that aired last week downplayed the violence at the Capitol two years ago, recasting the Washington mob that breached the Capitol as an “orderly and meek” gathering of “sightseers.”

Carlson’s claims, which accompanied clips of Capitol security footage, drew an angry reaction from right-wing users who fired off threats on Twitter and in pro-Trump forums directed at politicians who have made public inquiries into the violence, especially the congressional Jan. 6 committee.

Those threats came in far greater numbers than before the broadcast, according to the Advance Democracy report.

https://finance.yahoo.com/news/exclusive-social-media-threats-exploded-120107000.html

Jen Psaki knocks Tucker Carlson for treating his audience ‘like they’re stupid’

https://www.yahoo.com/news/jen-psaki-knocks-tucker-carlson-145911483.html

15321

I am not saying this is wrong but I am curious how these year-by-year population numbers are arrived at without a census, and loss of population also means loss of congressional seats, so there is an incentive for states to fudge these numbers. is California and other sanctuary states counting the non-citizens they have invited in?

As a former Floridian now living in Ga, Florida has no income tax, Ga does. Sales tax varies by county but is as high as 9% here in Ga while Florida maxes out at 7.5% , and looking at my property taxes, the county I am in offers no homestead exemption, all counties in Florida do. I also own an RV and Ga charges an annual sales tax on all RV’s , Florida does not. My conclusion is, I am paying more in taxes here in Ga than I was in Fl. I am also retired so the Ga state income tax is not even affecting me. For someone still working FL is the clear winner for a lower overall tax bill.

I just might be moving back to FL

The demographics in Florida have me concerned. Florida has a lot of 55 and older communities the largest being The Villages north of Orlando. The youngest baby boomer is now 59 so who will they sell these homes to if there are no more baby boomers and what happens when the boomers start dying off, the oldest boomers are now in their mid 70’s

There is clearly going to be a big demographic shift over the next 10 to 20 years and I just might live to wittness it, Good or Bad

15322

I checked…you are welcomed back…:wink:

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15323

Thanks for the welcome back, here is a tax question? I had to pay sales tax in Ga to register my FL bought vehicle. If I do move back to FL, will FL want me to pay sales tax again?

Washington is not the only one with screwed up tax laws

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15324

Florida’s vehicle tax is not based on value. It’s a flat fee. Think it’s up to $75ish?

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15325

$75 bucks, Wow… That’s cheap!! Downunder vehicle tax (Registration) is $800…

I own two cars and a motorcycle, so I don’t see any change from $2500… Plus Insurance and maintenance…

Our overall minimum wage might be superior to Uncle Sam’s, but our tax system gives with one hand and gut punches you with the other…

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15326

Dayum! I know CA, when I lived there in the 80’s, had vehicle registration fees based on value of car.

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15327

So you look at this graph in green and don’t see declining growth from the left to the right? I don’t know what else to say other than get your eyes checked.

Yea, huge growth changes since 2020, can’t disagree there.

I don’t get what point you’re trying to make or think I’m trying to make.

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15328

I think this happened in 2020 or 2021 due to the Census in 2020. They lost a seat for the first time.

I think most states can look at least births, deaths, and other metrics like school enrollment and drivers license data.

Not sure how migration is measured, but that must factor in somewhere.

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15329

Here is another way to look at sales tax. When I moved to Florida many years ago, Sales tax was 4%

If you bought something for a dollar you paid 4 cents in tax.

Now fast forward to today and that dollar item because of inflation now costs 10 bucks, for a 10 times increase, but the tax on that $10 item is now 7.5% or 75 cents. That is a 19 times increase.

Is there any wonder the middle class is dying in America as governments, local, State, and National expand

Yes less government is a step in the right direction

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15330

When a state has no income taxes and needs to generate revenue, does less government equal less sale tax?