No matter how you feel about the way our government spends our money, none of us wants to pay more tax than we absolutely must. So where can we go to avoid a high tax bill?
States that have no income tax
Seven states do not tax wage earners on their income. They are Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. Two others - New Hampshire and Tennessee - tax some types of income, such as interest and dividends, but not wages. But before you get excited about packing up and moving, you should know that taxpayers in some of those states actually bear tax burdens that are among the heaviest in the country. That’s because some of those states more than make up for the lack of income taxes by taxing heavily in other areas, like property, retail goods and commodities like alcohol and tobacco.
If you really despise paying taxes, the number you need to pay attention to is the “effective tax rate.” In other words, at the end of the year, how much of your money has gone to taxes of all kinds, including property taxes, sales taxes and excise taxes as well as income taxes on wages or investment earnings? What we see upon closer examination is that in some (not all) no-income-tax states, the other taxes more than outweigh the income tax savings, resulting in a heavier overall tax burden for the 99 percent, and in particular for the taxpayers with incomes in the lowest 80 percent. (This data is based on the 2012 tax year and effective tax rates calculated by the Institute on Taxation and Economic Policy.)
Home affordability and other lifestyle issues
It won’t do you much good to know you can save money on taxes by moving to a certain place if you can’t afford to live in that place. Historically, the median U.S. home price has been around 2.6 times the median U.S. annual income. A similar number - two-and-a-half - is the benchmark that the past few generations of homebuyers have used to measure affordability. If you earn $100,000 per year, you can likely afford a home with a price tag around $250,000, give or take a few thousand dollars. For the purposes of this article, housing affordability will assume a 20 percent down payment and a 25 percent ratio of principal and interest to income.
Other factors to consider are quality of life issues. Although a certain segment of the population are true urbanites who crave convenience and culture, more people value quiet and space. And urban or rural, we all want our children to be safe and inspired at school. We enjoy public attractions like theaters, museums and state campgrounds. We desire low crime rates. So, with full acknowledgement that lifestyle criteria are subjective and depend on each person’s preferences and priorities, we’ll identify cities in tax-advantaged states that have the most to offer their residents.
Best cities for people who hate paying taxes
Washington, District of Columbia
Mount Pleasant, South Carolina
Las Vegas, Nevada
Portsmouth, New Hampshire
[ ... ]
Mount Pleasant, South Carolina
South Carolina offers favorable tax rates to residents at all income levels. Don’t let Mount Pleasant's small population - 72,000 - fool you. The city is just a few miles from Charleston and North Charleston, so it enjoys many big city benefits while holding onto its smaller community feel.
CNN and Yahoo! Voices both rank Mount Pleasant in the top 100 best places to live. Influencing factors include its miles of coastline and beaches and a highly rated public school system. Mount Pleasant enjoys a mild climate, with lows in the winter that nearly always remain above freezing, and has dozens of libraries and several museums. At least 22 golf courses are in close proximity, and restaurants number about one thousand.
Although Mount Pleasant is part of a larger metro area, local employment opportunities are good and few residents (only 6.4 percent) find that they must commute long distances (45 minutes or longer) for work. Unemployment in South Carolina is 6.4 percent, neither high nor low compared to the rest of the country.
If you love the ocean and beach, Mount Pleasant really is a wonderful place to live. Many of its favorite attractions - a maritime museum, a bridge walk, a water taxi and a water park - involve life on or near the water. The military has a strong presence here so expect to enjoy attractions and events related to the armed forces, like warships and fighter jets to discover and tour. Mount Pleasant is about halfway between Myrtle Beach and Hilton Head, two popular destination cities.
The crime rate is well below the national average. GreatSchools.org gives the Mount Pleasant education system an overall rating of 9 out of 10, which is outstanding.
Money is good here, too, with a median household income of over $76,000. The median home sale price is $329,500 (Q1 2014). The price range in the surrounding area varies widely and the housing market is stable. Neighboring zip codes show average home sale prices of $230,000, $160,000, even $45,000. A qualified homebuyer does not need deep pockets to find someplace suitable and pleasant to live in Mount Pleasant or the surrounding area.
Read Article >
Real Estate, Mount Pleasant, The Insider