State-by-state tax data info (pensions, moving, gorgeous, federal)
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Cheapest and nicest rarely are found in the same place.
It depends what ones pleasure is
We live in an Ag County (translates to cheap) on 25 acres on a remote road --- we look like we're in No Man's Land but we are less than 15 miles from two towns with hospitals and good doctors.
A county deputy lives a thousand feet thru the woods from us
Hardly a lifestyle for everyone but it's cheap, nice, peaceful and drop-dead gorgeous
I saw that article yesterday. As usual, there are some flaws in their methodology. My state exempts most of our Retirement Income, so that particular bullet point missed the mark completely.
Real Estate Tax ?? On a state-wide basis ?? Not really representative of a specific Market Area.
Did they account for Gasoline Tax ?? My state has the lowest in the nation.
Kiplinger's magazine does the best job of these state by state surveys....check their website for the latest.
Last edited by FiveLoaves; 02-21-2018 at 07:47 AM..
I saw that article yesterday. As usual, there are some flaws in their methodology. My state exempts most of our Retirement Income, so that particular bullet point missed the mark completely.
Real Estate Tax ?? On a state-wide basis ?? Not really representative of a specific Market Area.
Did they account for Gasoline Tax ?? My state has the lowest in the nation.
Kiplinger's magazine does the best job of these state by state surveys....check their website for the latest.
Note that while Alaska has low taxes, the cost of living is very high.
Ohio comes out as above average on state taxes, but when I try to compare taxes to other states I find there are things that the state tax charts do not take into consideration:
Ohio does not have a personal property tax on automobiles, does not require annual safety inspections, and with the exception of a handful of counties, does not require emission checks. You can now buy a four year license plate sticker, so that you only have to visit the Ohio BMV every 4 years when you renew your driver's license (assuming your plate and driver's license are in synch). All of this combined makes licensing your vehicle cheap and easy.
I retired last year. My part-time job pays a whole lot less, so my payments to the City and the school district are much lower. There is no local income tax in the rural area where I live, and the school district tax is only on earned income.
I am investing in the Vanguard Ohio Municipal Bond Fund, which is exempt from federal, state, and local taxes for Ohio residents. Unfortunately, I still have to pay capital gains taxes. This tax shelter is not available in all states: https://investor.vanguard.com/mutual...th-end-returns
The Ohio sales tax does not apply to groceries, or food consumed off premises. That makes a difference in sales tax.
I noticed that some states exclude pension income from state taxation (not Ohio), but only if the pension was earned within that state. So moving would not lower my taxes.
Basing something on the 'tax burden' is misleading. The total state revenue from all sources, divided by the population does give you a number. But that number does not mean that any specific person is paying that amount. Corporations also pay taxes, does that stop a person from retiring? No.
I live in the oldest state, the state with the highest percentage of retirees.
I pay no state income taxes because many pensions are exempted from taxes in this state.
This is the fifth home that I have owned, it is the largest home I have owned and it's property taxes are by far the lowest of all the previous homes I have owned. So to say that this state has 'high' property taxes is a pill that I can not swallow.
Here is another chart based on cost of living rather than state taxes:
Ohio comes out as above average on state taxes, but when I try to compare taxes to other states I find there are things that the state tax charts do not take into consideration:
Ohio does not have a personal property tax on automobiles, does not require annual safety inspections, and with the exception of a handful of counties, does not require emission checks. You can now buy a four year license plate sticker, so that you only have to visit the Ohio BMV every 4 years when you renew your driver's license (assuming your plate and driver's license are in synch). All of this combined makes licensing your vehicle cheap and easy.
I retired last year. My part-time job pays a whole lot less, so my payments to the City and the school district are much lower. There is no local income tax in the rural area where I live, and the school district tax is only on earned income.
I am investing in the Vanguard Ohio Municipal Bond Fund, which is exempt from federal, state, and local taxes for Ohio residents. Unfortunately, I still have to pay capital gains taxes. This tax shelter is not available in all states: https://investor.vanguard.com/mutual...th-end-returns
The Ohio sales tax does not apply to groceries, or food consumed off premises. That makes a difference in sales tax.
I noticed that some states exclude pension income from state taxation (not Ohio), but only if the pension was earned within that state. So moving would not lower my taxes.
If Ohio is a low tax state, why does Vanguard offer a tax-exempt fund? They offer tax-exempt funds for MA, NJ, NY, CA, PA, and Ohio. What do they all have in common? States with a sizable population and a HIGH tax rate. You don't see anything for Texas or Florida, do you?
One of the major factors in moving my business from the Cleveland to the Chicago area in 2000 was that my marginal tax rate went down 7.5%. There were several other factors but that was a pretty significant one.
Most of the benefits you mention are not uncommon to most states. Most states don't have a personal property tax and a good many states do not tax food consumed off premises or medications.
And that does not include the higher property tax rates in Wayne Co. which are in the top 25% as a % of value in the nation.
The states ranked 10 and 40 differ from each other by only 1.7 points (8.6% to 10.3%). Which means in a retirement income of 20K, the difference between highish and lowish is only a dollar a day. Not enough to offset many of the other considerations that are in your evaluation of a place to retire.
The tax load can be weighted, for or against your lifestyle. For example, if you plan to own your home, the high property tax in Texas will offset the zero income tax, which is meaningless since your SS would (probably) not be income-taxed at all in any state.
The progressiveness of taxes is relevant. As state with high tax bite may be taking it mostly from upper-income people, not the typical pensioner. A high sales tax won't affect a retiree much, because they don't consume much.
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