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Some people can move to a place where their income isn't going to change very much, because they have a skill that's in demand. If that's the case, look at places where housing costs and per capita income are much lower, so even if the tax burden per capita is the same as a place with higher incomes and higher housing costs, the actual numbers would be far lower.
For example, Arkansas and Washington are the same percentage tax burden per capita income, but in Seattle you're not likely to get a real nice house for 350 thousand dollars, but for 350 thousand dollars in Little Rock you can get two nice houses in nice neighborhoods.
Some people can move to a place where their income isn't going to change very much, because they have a skill that's in demand. If that's the case, look at places where housing costs and per capita income are much lower, so even if the tax burden per capita is the same as a place with higher incomes and higher housing costs, the actual numbers would be far lower.
For example, Arkansas and Washington are the same percentage tax burden per capita income, but in Seattle you're not likely to get a real nice house for 350 thousand dollars, but for 350 thousand dollars in Little Rock you can get two nice houses in nice neighborhoods.
The message from the tax code in Florida is: set up a small business, preferably sole proprietorship, whose revenues do not depend, at least not significantly, on the local economy and live very modestly in terms of housing (high property taxes and insurance costs).
If you are in some of the more densely populated regions of Florida, add living very modestly in terms of vehicles and health needs due to high insurance costs.
I suppose the same applies to Texas and other high property tax/no state income tax states.
Of course, many people in Florida do the opposite: they earn their income elsewhere, buy an expensive property, often as non-residents, thus paying the full property tax rate, and, if residents, paying high health care and car insurance rates.
Each state sets their own income tax brackets at different income levels.
One state might have the highest tax bracket but if it does not kick-in until an AGI well above your income level then who cares?
We moved to Maine, and we have found that most folks around here whine about our 'high' taxes. But my income is low enough that we are below the lowest income tax bracket, so we pay no income taxes. But if you had a much higher income level, then you would be paying income taxes.
I have learned that Maine sets one mil rate for property taxes [different for each county], and then each town / city adds onto that mil rate whatever the town needs for it's services. By living outside of the incorporated towns, lowers our property taxes by 80%. So to live in a high services city with a higher cost-of-living would cost you much higher property taxes.
Then folks complain about Maine's high vehicle 'excise' taxes. Which are simply vehicle property taxes, but Maine changed the name so it sounds like a brand new kind of tax. We have three older vehicles that are each taxed between $5 to $15 each year. Only new vehicles have a 'high' property tax. So it goes right back to your standard of living, own new vehicles and you pay higher excise taxes.
Over all we have seen that living in this 'high' taxed state; that those high taxes only apply to high income folks, who live in the cities, who set for themselves a high standard-of-living.
Whereas a lower income pays no income taxes; living rurally has much lower property taxes; driving old cars the tax burden is much less; and it makes this 'high' taxed state into a very low taxed state.
I must presume that it is similar in other states as well.
I lived in TX before I moved to WA and I'm considering it. But...property taxes are crazy, sales tax isn't much different than here, so I"m wondering if it's really a move in the right direction.
I have found the only way to know the impact on your budget is to evaluate places by modeling the way you live in that environment.
For instance you already see that sales taxes are the same between TX and WA but property taxes are more than double in TX. But property values are 30% higher in WA... utilities in WA are half of what it is in TX and less is used... etc. etc.
It will vary depending upon how you earn, spend, and live your life. I think it is important to first set your priorities regarding what you want from life and then find a cost effective way to satisfy those priorities.
I live consistently regardless of where I live. I cook at home, I don't live in something bigger than I need, I drive an older car and will until it dies, then buy another used car, I thrift shop, that's just me. And I do this because I am single, I depend on myself for my livlihood, I"m a simple person, and I'm trying to stash as much away for retirement as possible. I would, however, like to buy a little house. I only need something small--2 bd room 1 bath..nothing over 900 sq feet, a little land to grow a garden. This is how I live.
I understand about the income tax issues. One of the states has three tax brackets and the highest one tops out at what I consider poverty level income. Sales tax on food, higher than average sales tax, low low property tax, low insurance rates etc. Another state has 6 tax level brackets and I wouldn't fit into the top one, no tax on food or utilities, lower property taxes than where I am now but higher than other places.
I guess I'm looking at this because I don't want to consider anywhere where I can't afford a home, and regardless of how thrifty I am in WA state, there is no way I can afford a home, and I make decent money, but I refuse to have a mortage payment that's anything over a third of my monthly income. So in a sense, how you live doesn't always dictate if you can live the life you want if the cost of living and tax stuff is cost prohibitive.
Anyway...yes my income would probably adjust down accordingly to cost of living, regardless of the demand of my field. That's what the research has told me. Companies do try to get the most for the least amount of money, regardless of education and so forth, but I digress.
Thanks guys.
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