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In many places, this information is readily available online. In Ohio, I can go to my county auditor's website, lookup my address, and the property tax paid/due/delinquent is part of the information given.
It needs to be in a place where they can't avoid seeing it. Most renters don't care about property tax because they don't get a bill from the county.
The one state I feel doesn't fall into the "states are gonna get their money category" is Florida. Florida has high property taxes, but not not anywhere close to as high as Texas and sales taxes are relatively low around 7% compared to Tennessee at around 9%. I always hear that states with no income taxes have worse schools but thats not true at all. Franklin county in TN, has some of the best schools in the country and so do counties in TX and FL. Most people in NY or California send their kids to private schools. You will pay more in TX, TN and FL for car insurance and property insurance, as well as flood insurance in FL and TX but it comes down to how much money you make. If you make 70k a year, it really doesn't matter one way or the other. If you make over 150k, living in a no income tax state is going to free up about an extra 8 or 9k a year, which is a pretty nice car payment or vacation.
1) States have to get revenue somewhere. If they don't have a sales tax, they get it somewhere else. If they have a lower property tax system, maybe income taxes are high. And so forth.
2) Some states just don't spend as much. And that tends to show in their educational systems, their health care systems, they're crime rates, their general quality of life.
But, as to point 1, there *is* a considerable difference in tax "bite" from state to state.
The idea that "they will get you one way or another" is an oversimplification. Several low tax states get revenue from mining or oil extraction (TX, WY) and simply tax their residents less.
On point 2 - which one of the Founding Fathers said, essentially, that the government that is powerful enough to do for you, is powerful enough to do *to* you? I am very much OK with the Western practice of letting people fend for themselves.
If you like the political environment in NY better than say WA - fine, it's a question of individual preference or even taste. But to compare apples to apples - consider how much less the total tax bite is in DE compared to CT - same region, same climate, but CT just costs more, without providing anything of value as far as I can tell - (full disclosure - not a fan of the Northeast, never lived there, have visited for work briefly, but would not live there, period. So maybe CT provides something for the connoisseur of things Northeastern, that is lost on me.)
But to say that low tax states like WA or even DE are undesirable, that they don't provide a good quality of life, not sure where you are getting that.
Now, of course, in this thread we are talking tax bite, which does not tell the entire tale of a desirable or undesirable location. But, it's part of it!
Speaking only of property taxes right now, are there other states that have something similar to Prop 13 in CA? I think it would be tough to retire here in Minnesota because the property taxes are already high and would only go up- even if you have planned well for retirement property taxes would take a huge chunk out of your limited income here if you wanted to stay in your home. I can't even imagine owning a home in NJ-wow that is $$$$$$ for property taxes.
Everyone talks about the high property taxes on the east cost but they aren't cheap in much of the midwest. Property taxes in IL (2.32%) are just a few basis points less than NJ (2.36%).
And though sales tax for IL is a relatively modest 6.25%, many cities add to that. I pay a total of 8.75% sales tax in a moderately sized city in the middle of nowhere! So yes, very high on both those fronts - it's not evening out for me in IL...maybe other states.
In KS, they tax us on everything and for a lower cost of living state, the taxes are not that way! So, no, in KS nothing "evens out". They still can't bring in enough revenue either so keep cutting the services. It's a mess!
Speaking only of property taxes right now, are there other states that have something similar to Prop 13 in CA? I think it would be tough to retire here in Minnesota because the property taxes are already high and would only go up- even if you have planned well for retirement property taxes would take a huge chunk out of your limited income here if you wanted to stay in your home. I can't even imagine owning a home in NJ-wow that is $$$$$$ for property taxes.
Washington had it's own version called I-747 and eventually it was tossed by a single judge... it was in effect for a few years.
Property taxes are paid by everyone who lives in the state (if you rent it's tacked on to your rent payment, so yes even renters pay property taxes). In general this is the most "fair" tax distribution because it's directly related to how much money you spend on housing. A rented hovel will have a lower tax bill than an owned mansion.
Personal Property Taxes (taxes on things like cars, boats, motorcycles, etc.) skew the taxes more toward the middle class and rich (the people who can own the most extra toys). Some states hide this tax in registration (tag) costs, others send a separate bill. Again, only people who live in and register their toys/vehicles in the state have to pay the tax.
Income taxes are only paid by people who work or live in the state. Lower income people generally get exemptions, and there are often exemptions on retirement income. This affects you if you live elsewhere and work in the state, or if you live in the state and work elsewhere.
Investment income taxes are paid by the richest citizens in the state, but calculating and collecting it can be complicated. Some states have exemptions for retirement investment income.
Sales taxes are paid by everyone who buys things in the state (or, legally, even if you buy things in other states and bring them into the state... this version is called a "Use" tax and most states have them). Some people illegally skip this by buying things online or buying things in adjacent states with lower taxes. A classic "flat tax", it is equally paid by the poor and rich. Except some states have exemptions on necessity items such as food which is where poor people spend most of their non-housing money.
Tourism taxes are paid by travelers. People (tourists or business travelers) who stay in hotels or rent cars.
And you're right, it evens out; the state gets its money one way or the other. But there are advantages and disadvantages to particular states depending on your income type. Tennessee, for example, has no personal income tax nor personal property taxes. We do have a very high sales taxes (9.25-9.75%, slightly reduced on food) and an investment income tax. So a general working-class person could do very well here, but an investment banker could do better elsewhere.
What doesn't even out is how much money states such as TN receives from states like NJ, in the form of NJ tax payer monies.
TN is in the top 10 at # 5 of being at the "receiving end".
NJ is #48.
TN (and TX, Alaska, Florida, South Dakota and every other state that takes without "income tax") needs to start taxing their "residents" income.... so every other state doesn't have to work to support y'all.
Last edited by Informed Info; 04-20-2016 at 11:27 PM..
TN (and TX, Alaska, Florida, South Dakota and every other state that takes without "income tax") needs to start taxing their "residents" income.... so every other state doesn't have to work to support y'all.
New Hampshire doesn't have a state income tax on earned income and it doesn't have a state sales tax. It does tax interest/dividends, meals/lodging, and property. You can pick a town with a large tax base relative to the number of children in the public schools and pay relatively low property taxes. How do they do it? The state is 94% white and 2 1/2% Asian. It always has a very low unemployment rate. It doesn't have the big city permanent underclass, illegals, and refugee problem. The population is largely affluent middle class that doesn't put much demand on social services. Welfare is administered at the town level, not via anonymous state bureaucracy so it is much more difficult to have welfare fraud. It's the Trump voter demographic, basically. With low tax revenues, most government services are fee-based and very limited.
In states with big populations of permanent underclass, immigrants, and refugees, you can either adopt the southern model where you offer the bare minimum of social services required by Federal law or you adopt the left coast/right coast model with enormous taxes to fund more generous social services for those people. With the original question posed in the thread, no, it doesn't all even out. If you live in a high tax state, make good income, and live in a nice home, you're going to pay in some way. If you live in a low tax state, your overall tax burden for the same income and level of housing is going to be much lower.
Uhh yes taxes! I currently live in Minnesota where according the chart I attached it is #19 out of all the states for high property taxes- however there is no tax in MN for food or clothing. Where as when we lived in California the property tax rates were much lower but they tax on clothing. Do you think it all adds up in the end? New Jersey has the #1 spot for property taxes ouch!!! This is not a debate about actually having to pay taxes- we all have to. Just more about how states do it all so different and is there a benefit to it? For example, NJ has the highest property tax rate- so is there a bigger break on other things that make it beneficial?
No there isn't a break on other things. My father owns a home, 3/1, 15 miles from Manhattan, in NJ in a large city. It's only worth about $100K and he pays about $500 a month just for property taxes. The only thing lower in NJ is gasoline and its maybe 10 to 15 cents less than some state with higher gas taxes, you don't have to pump it either, but saving a few bucks a week on gas does not make a difference.
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