Advertisement

bruce-mars-558705-unsplash.jpg

Advertisement Headline

Curabitur vel gravida neque. Sed non imperdiet elit. Maecenas in pretium dolor, sit amet rutrum.

Weather data not found.
Error 400: bad query
Weather data not found.
Error 400: bad query

Tax-Free Dream Or Costly Nightmare? The Truth About Living In States With No Income Tax


Tax-Free Dream Or Costly Nightmare? The Truth About Living In States With No Income Tax

Tax-Free Dream Or Costly Nightmare? The Truth About Living In States With No Income Tax

Ditching income taxes sounds like a dream for many Americans, and the nine states offering that see their fair share of interest.

Although you may initially keep more of your paycheck, the story doesn’t end there. These states often make up for lost revenue by increasing other costs, which are climbing fast.

Don’t Miss:

Some states without an income tax have higher housing costs, utilities or other expenses. Property taxes may be substantial, especially in areas with high housing costs, and sales taxes can add up quickly on everyday purchases like groceries.

While the lack of income tax might seem like a win, it’s important to consider the overall financial picture before moving to a no-income-tax state. The states with no income taxes are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming.

Realtor.com data shows nationwide listing prices rose, on average, 46.6% between May 2019 and May 2024. Two-thirds of no-income-tax states saw home prices skyrocket even higher over the past five years. Wyoming takes the crown with an 82% increase, followed by New Hampshire, South Dakota and Tennessee with jumps of 76.5%, 65% and 52.7%, respectively.

Trending: Warren Buffett once said, “If you don’t find a way to make money while you sleep, you will work until you die.” Here’s how you can collect passive rental income without being a landlord.

Even states with slower price growth like Texas, Washington and Florida (between 26% and 36%) might leave you feeling nickeled and dimed by other costs. Home insurance costs soared in Texas and Florida because of the risk of property damage from climate-related events.

“The emigration away from high-tax states like California, Illinois and New York and into no-tax states is driving up property values due to increased demand for housing said Miles Romney, assistant professor in the Department of Accounting at Florida State University’s College of Business. “But the supply is relatively constrained.”

How Low-Tax States Stack Up

State

State sales tax

Property tax effective rate

Average property tax

Average annual home insurance

Worth noting

Alaska

0%

0.95%

$3,947

$1,116

Local sales tax can be as high as 7.5%

Florida

6%

0.76%

$4,476

$10,996

Costliest home insurance

Nevada

6.85%

0.48%

$2,660

$1,224

Gambling provides significant revenue

New Hampshire

0%

1.25%

$7,172

$1,225

State collects tax on dividends and interest

South Dakota

4.5%

1.01%

$3,408

$2,562

State collects sales tax on purchases that are often exempt elsewhere

Tennessee

7%

0.44%

$1,695

$2,470

State collects sales tax on purchases that are often exempt elsewhere

Texas

6.25%

1.2%

$4,464

$4,456

Oil industry provides the state’s significant revenue

Washington

6.5%

0.8%

$5,640

$1,437

State charges 7% on capital gains over $250,000

Wyoming

4%

0.53%

$2,930

$2,159

State charges sales tax on some personal care items like feminine hygiene and diapers

National

4%-7%

1.1%

$2,690

$2,377

 

Source: Realtor.com

“States with no income taxes may not be as affordable [as] one would think for a couple of different reasons,” Realtor.com Senior Economist Ralph McLaughlin said. “First, wealthy households may seek to establish residency in such states in order to avoid paying income tax. This would mean the state would have a wealthier population base, and a wealthier base tends to be correlated with higher home prices. Second, states that have no income tax will need to make up for lost revenue in other ways, which may be from a combination of higher property and sales taxes.”

Keep Reading:

“ACTIVE INVESTORS’ SECRET WEAPON” Supercharge Your Stock Market Game with the #1 “news & everything else” trading tool: Benzinga Pro – Click here to start Your 14-Day Trial Now!

Get the latest stock analysis from Benzinga?

This article Tax-Free Dream Or Costly Nightmare? The Truth About Living In States With No Income Tax originally appeared on Benzinga.com

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.



Source link

Advertisement

bruce-mars-558705-unsplash.jpg

Advertisement Headline

Curabitur vel gravida neque. Sed non imperdiet elit. Maecenas in pretium dolor, sit amet rutrum.

Disclaimer

It’s about the importance of the case in our view, we may discuss the case with the respective client, and we may allow the respective lawyers to provide their opinion on argued cases. This is an important task. Both over and under-performance of the lawyers can lead to bad laws that will affect the entire society and those who come after them. We must be able to have a critical view of such important and consequential performances and roles in our society.