The Most and Least Taxing States to Live and Retire In

[Bad_Daddy 2,209]

http://finance.yahoo.com/retirement/article/113611/most-least-taxing-states-bloomberg

5 Highest State Tax Burdens

1. Connecticut

Income tax: 5%

Sales tax: 6.35%

Property tax per capita: $2,381

Inheritance tax: 7.2% to 16% with $2 million exemption

High taxes in Connecticut are paired with the nation's highest income per capita--$56,001 per person in 2010, according to the Bureau of Economic Analysis. A sales tax increase took effect in July, raising the rate, from 6 percent to 6.35 percent, and adding a further 3 percentage-point levy on luxury goods such as expensive cars and boats. The state collects the third-highest property taxes per capita and is one of 14 states to tax Social Security income, according to CCH.

2. New Jersey

Income tax: 6.37%

Sales tax: 7%

Property tax per capita: $2,625

Inheritance tax: See note*

Regularly listed as a state with one of the highest tax burdens, New Jersey is cited by the Tax Foundation as having the country's highest property tax per capita. It is also one of 14 states to tax Social Security income, according to CCH.

* Transfer to a spouse, lineal descendant, or charitable organization is tax-free; transfer to children-in-law is taxed at 11 percent to 16 percent; all other transfers are taxed at 15 percent to 16 percent.

3. New York

Income tax: 7.85% (8.97% on income over $500,001)

Sales tax: 4%

Property tax per capita: $2,009

Inheritance tax: Estate taxes range from 0.8% to 16%

The high taxes paid by New Yorkers aren't helping to offset a big decline in revenue amid recession. An oft-suggested, ever-controversial stock transfer tax seems to be off the table. A smoke break to think about how much New York would make whenever a share changes hands is not recommended because the state has the country's highest cigarette tax, at $4.35 a pack.

4. Massachusetts

Income tax: 5.3% (flat tax rate)

Sales tax: 6.25%

Property tax per capita: $1,789

Inheritance tax: Estate taxes range from 0.8% to 16%

Even though Massachusetts residents are saddled with the highest amount of debt per person in the U.S.--$11,357 apiece in 2009, according to the Tax Foundation--it seems likely that the state income tax rate will be reduced this year. Voters moved to reduce it to 5 percent years ago but the change has been blocked by lawmakers. With a $2 billion increase in tax revenue due to a strengthening economy--$723 million over the projected take--the tax rate will likely go from 5.3 percent to 5.25 percent, according to MassLive.

5. Maryland

Income tax: 5.5%

Sales tax: 6%

Property tax per capita: $1,171

Inheritance tax: See note*

Sales tax increases are in the cards for Maryland residents. In 2010, income tax brought in $6.2 billion, compared to $3.8 billion in sales tax. With a budget deficit of more than $1 billion looming, lawmakers are looking at tax increases on gasoline, medicine, online shopping, and snacks. A proposed increase in the sales tax on alcohol, from 6 percent to 9 percent, is expected to add $84.8 million to Maryland's 2012 revenue.

* Spouse and linear-descendant and sibling transfer is tax-free; all other transfers are taxed at 10 percent.

5 Lowest State Tax Burdens

1. Mississippi

Income tax: 5%

Sales tax: 7%

Property tax per capita: $785

Inheritance tax: None

Savers will be gratified to find that recent rule changes in Mississippi exempt all IRAs from income tax. The change makes Mississippi one of four states to allow citizens to contribute to retirement accounts without paying state income tax on the money. Mississippi has no inheritance or estate tax.

2. South Carolina

Income tax: 7%

Sales tax: 6%

Property tax per capita: $963

Inheritance tax: None

South Carolina had the least tax collections per person in 2009 (the most recent year available), according to the Tax Foundation. including corporate taxes. If you are looking to get married, the state has a $50 tax credit for prior counseling.

3. Tennessee

Income tax: None

Sales tax: 7%

Property tax per capita: $752

Inheritance tax: See note*

Tennessee does not tax income, apart from a 6 percent levy on interest and dividends. Capital gains are exempt. Still, investors should be aware that the state inheritance tax allows tax-free transfer only to a spouse.

* Transfer to a spouse is tax-free; all other transfers are taxed at 5.5 percent to 9.5 percent.

4. Alabama

Income tax: 5%*

Sales tax: 4%*

Property tax per capita: $495**

Inheritance tax: None*

With low state debt, Alabama ranks among the states with the lowest taxes collected per capita--$1,770 per person in 2009, according to U.S. Census data and the Tax Foundation. It also has the lowest state and local property tax collections per person. At least one obsolete tax law remains on the books--Alabama's tax for the neediest Confederate veterans from the Civil War. The tax now supports the 102-acre Confederate Memorial Park, built on the site of the Old Soldiers Home for Confederate Veterans and complete with a museum (left), according to an article by the Associated Press.

* Income (highest bracket available), sales, and inheritance tax information were provided by CCH, a Wolters Kluwer business.

** Property tax statistics are derived from a Tax Foundation analysis of 2008 U.S. Census Bureau data.

5. Alaska

Income tax: None

Sales tax: None

Property tax per capita: $1,559

Inheritance tax: None

Alaska gets significant income from corporate taxes, mostly from the oil-and-gas industry. The state collects high revenue per person--$7,145 in 2009, according to the Tax Foundation--without collecting income, sales, or inheritance tax. Local investors don't pay state tax on capital gains because there is no income tax. However, at $1,559 per person, property taxes are relatively high.

[The_Dude 1,142]

Of the lowest tax states, I wouldn't consider living in anyone. I guess you get what you pay for, in the form of taxes.

[Saddle Bronc 124]

Three of the low-tax states (TN, AL and SC) are nice--and three of the high-tax (Garbage State, Empire State and Taxachussets) ones are absolutely horrid (couldn't rate CT).

[The_Dude 1,142]

Three of the low-tax states (TN, AL and SC) are nice--and three of the high-tax (Garbage State, Empire State and Taxachussets) ones are absolutely horrid (couldn't rate CT).

So is this yet another assesment you've made about an entire geographic region based on your extensive 3 days spent there?

[john_and_marlene 162]

http://kiplinger.com/tools/retiree_map/

[KAT & A 0]

Of the lowest tax states, I wouldn't consider living in anyone. I guess you get what you pay for, in the form of taxes.

[mawilson 2,133]

Retire in Alaska?

[Danno 1,228]

MIght be interesting to see how these states compared in population growth.

I would bet more New Yorkers are relocating south than the other way around.

[The_Dude 1,142]

MIght be interesting to see how these states compared in population growth.

I would bet more New Yorkers are relocating south than the other way around.

Danno, dont' play coy, you know there are a lot of people who migrate south when they retire. Lower cost of living means a more comfortable life when you are supported by wages from New York. Retired people also don't necissarily need many of the resources that cities, counties and states provide, so lower taxes are appropriate for them. In hindsight, I would ammend my first response. I would retire in South Carolina, I have lived there before and liked it, I just wouldn't try and get a job there.

[Danno 1,228]

Danno, dont' play coy, you know there are a lot of people who migrate south when they retire. Lower cost of living means a more comfortable life when you are supported by wages from New York. Retired people also don't necissarily need many of the resources that cities, counties and states provide, so lower taxes are appropriate for them. In hindsight, I would ammend my first response. I would retire in South Carolina, I have lived there before and liked it, I just wouldn't try and get a job there.

What you say has some truth to it

it is also true a lot of younger people and family have relocated South.

I run into Northerners on a continuos basis, in fact, they are all over the place in my area and I am one of them.

The recent census also showed a huge migration of Blacks moving south as well.

CHeck it out.

http://www.brookings.edu/reports/2004/05demographics_frey.aspx

[웃 910]

Interesting. When I think of these low tax states I think hill billy's, farms, uneducated mountain dwellers. For the high tax states I think wall street executives, highly educated, highly paid, highly intelligent, doctors, lawyers, scholars, etc.

5 Highest State Tax Burdens

Connecticut

New Jersey

New York

Massachusetts

Maryland

5 Lowest State Tax Burdens

Mississippi

South Carolina

Tennessee

Alabama

Alaska

[The_Dude 1,142]

What you say has some truth to it

it is also true a lot of younger people and family have relocated South.

I run into Northerners on a continuos basis, in fact, they are all over the place in my area and I am one of them.

The recent census also showed a huge migration of Blacks moving south as well.

CHeck it out.

http://www.brookings.edu/reports/2004/05demographics_frey.aspx

I knew quite a few people when I was in university whose parents came down on a parents weekend, saw the prices of consumer goods, and home prices, then realized they could retire almost 8-10 years ahead of schedule if they relocated down there after retirement. I would consider it, you can get a nice home for 150K down there. In most metro areas, 150K will buy you alot of cardboard boxes and some tape.

[Mr. Big Dog 10,747]

I run into Northerners on a continuos basis, in fact, they are all over the place in my area and I am one of them.

No surprise seeing that Charlotte is often referred to as Wall Street South. The financial industry has been moving jobs that are not front office out of NYC for years now. Charlotte (as well as Raleigh-Durham) is one of the places where these jobs move. Dallas, TX and Tampa, FL are also candidates to receive those jobs.

[Captain Oates 911]

People of all colors are moving south because:

A There are no jobs in the North

B The 'job creaters' (they who must not be taxed) - are creating some non-union, slave wages, workplaces in the south

Why would anyone move to the South if they weren't hungry and desperate ? For the sophistication and enlightened and educated nature of of the locals ? They have deputies called Ennis - I saw it on Dukes of Hazzard

In Central Washington, the humidity is 15 % and cars last forever. Some cars round here are 60 and 70 year old classics. Its nice in summer and hardly under freezing at its coldest (I lived in Milwaukee and jeez)

There is NO INCOME TAX

A retired person has already bought all the stuff he needs so the 8% sales tax is no burden

House insurance is reasonable (see Florida where I used to live !)

Property taxes are mild

Lots to do (baking cookies, going to church, teasing rattlesnakes)

No contest

[rsn 135]

New York does suck ####