Was moving from a no income tax state to an income tax state really that bad?
Was moving from a no income tax state to an income tax state really that bad?
Some background:
Married, no kids.
About $220k combined gross income.
Currently living in a no income tax state. We have been living way below our means as far as car and house these past few years so not a lot of baseline as far as property taxes. Thinking about moving to AZ (Tucson) or NM (Las Cruces). Thinking $400-$500k for a home.
We have done the cost estimates and all on the tax costs (~$6-9K/yr) but I was was wondering for those folks that actually make the move from no-tax to tax; what your real life experience has been as far as how much the cost impacted your finances?
Married, no kids.
About $220k combined gross income.
Currently living in a no income tax state. We have been living way below our means as far as car and house these past few years so not a lot of baseline as far as property taxes. Thinking about moving to AZ (Tucson) or NM (Las Cruces). Thinking $400-$500k for a home.
We have done the cost estimates and all on the tax costs (~$6-9K/yr) but I was was wondering for those folks that actually make the move from no-tax to tax; what your real life experience has been as far as how much the cost impacted your finances?
Last edited by MikeZ on Thu Dec 15, 2022 12:39 pm, edited 1 time in total.
-
- Posts: 123
- Joined: Sun Jul 10, 2022 11:21 am
Re: Was moving from a no income tax state to an income tax state really that bad?
I moved to Arizona a few years ago and was really happy with the property tax rate. IT has a flat 2.5% income tax rate with deductions similar to the Fed tax, but the property tax is reasonable or even cheap.
Re: Was moving from a no income tax state to an income tax state really that bad?
I've lived in a lot of places with a wide range of income tax rates. One was a zero income tax rate but it is where I grew up. I left at 18 and never looked back -- not enough money on the planet to get me back there. But I digress. I vowed early to not be swayed by money decisions as the primary factor on where I lived; life is too short, as they say. One of my favorite places -- possibly top of my list (outside the US) was the highest tax rate jurisdiction I've ever lived in by far.
Income taxes may only be part of the financial equation. I currently live in a fairly high tax state (MD) but my property taxes are very low. My property taxes in Milwaukee in 2003 were higher than my income tax in MD with comparable valuation.
Income taxes may only be part of the financial equation. I currently live in a fairly high tax state (MD) but my property taxes are very low. My property taxes in Milwaukee in 2003 were higher than my income tax in MD with comparable valuation.
Stay hydrated; don't sweat the small stuff
Re: Was moving from a no income tax state to an income tax state really that bad?
Your baseline comparison needs to include all of the relevant costs which may or may not change when you make a move. Some of those will include:MikeZ wrote: ↑Thu Dec 15, 2022 12:22 pm Some background:
Married, no kids.
About $220k combined gross income.
Currently living in a no income tax state. We have been living way below our means as far as car and house these past few years so not a lot of baseline as far as property taxes. Thinking about moving to AZ (Tucson) or NM (Las Cruces). Thinking $400-$500k for a home.
We have done the cost estimates and all on the tax costs (~$6-9K/yr) but I was was wondering for those folks that actually make the move from no-tax to tax; what your real life experience has been as far as how much the cost impacted your finances?
- real estate taxes
- home insurance
- utilities (all)
- car insurance
- local user fees and taxes
- groceries and leisure
-
- Posts: 5978
- Joined: Mon Aug 22, 2016 3:22 pm
Re: Was moving from a no income tax state to an income tax state really that bad?
Moved from WA to AZ. For us, house and everything else, for the most part is cheaper. Balances out.
-
- Posts: 1157
- Joined: Sun Nov 30, 2014 6:58 pm
Re: Was moving from a no income tax state to an income tax state really that bad?
I moved from Dallas, Texas (no state income taxes and, at the time, relatively low cost of living) to inner-city Chicago, Illinois (state income tax and high cost of living). I chose to move to experience the different lifestyle. I have moved myself a few times around the country. I don't let taxes stop me from living where I want to be at that point in time. No regrets at the time and none now (living in my 7th location around this country)
-
- Posts: 231
- Joined: Thu Apr 21, 2022 9:04 pm
Re: Was moving from a no income tax state to an income tax state really that bad?
Depends on the state and your situation. I'm sitting at 13.3% in California. We came from WA. So yeah, it's bad.
-
- Posts: 18461
- Joined: Tue Dec 31, 2013 6:05 am
- Location: 26 miles, 385 yards west of Copley Square
Re: Was moving from a no income tax state to an income tax state really that bad?
You'd really want to analyze total tax in both places. I've always lived in Mass (sales tax, income tax, property tax, exise tax) but worked in New Hampshire for 8 years (no sales tax, no income tax, property tax, personal property tax). We analyzed all the taxes and for us, in the towns we considered, New Hampshire would have taxed us more than Mass.
Bogle: Smart Beta is stupid
Re: Was moving from a no income tax state to an income tax state really that bad?
It also depends on how your income changes, and how your expenses change.
If you're moving for a new job with more $$, that may be a benefit.
If your state with income tax has better and cheaper schools, better retiree benefits, or better healthcare options, that can be a plus, too
If you're moving for a new job with more $$, that may be a benefit.
If your state with income tax has better and cheaper schools, better retiree benefits, or better healthcare options, that can be a plus, too
Crom laughs at your Four Winds
Re: Was moving from a no income tax state to an income tax state really that bad?
People think nothing of spending hundreds of thousands of dollars to live in the neighborhood they want to but hesitate to spend money to live in the state they want to?
-
- Posts: 3314
- Joined: Wed Feb 03, 2010 9:17 am
Re: Was moving from a no income tax state to an income tax state really that bad?
I don’t have any experience with Arizona, but I do have some with New Mexico and with Texas.
Property taxes in NM are capped at 3% annual increases, as I understand it. Valuations are reset upon purchase. So you are sorta incentivized to buy the “right” house first.
Income taxes are a bit quirky, in that if your federal AGI is low (under $55k for MFJ), you can get a “low and middle income” tax credit, which incentivizes you to have tax exempt bonds even if your federal tax bracket would normally suggest that you shouldn’t. There is a also, at least for a few more years, a medical expense deduction that lets you reduce your NM taxable income anywhere from 10%, 15%, or (I think) 25%, depending on your income.
NM has also recently been flush with cash, so there were income tax rebate checks that went out last year and there is a talk of additional checks next year.
More to your point though, I figure that as long as our property and income taxes (combined) are less than what property taxes alone would be in Texas, we come out ahead. So far, based on my calculations, we have. But I am also not engaged in Roth conversions or much selling of stock or the like, as we just live off our dividends and interest. If we had a lot of capital gains or the like, things might be different.
And filing the NM income tax form is an additional hassle that we didn’t have in Texas, but it isn’t that bad. Although I do have to say that that instruction book could use a good proofreader and editor.
Las Cruces is a nice town. Too hot for me, but I’d certainly consider moving there otherwise. Caliche’s and Habaneros alone would make living there worth it.
Property taxes in NM are capped at 3% annual increases, as I understand it. Valuations are reset upon purchase. So you are sorta incentivized to buy the “right” house first.
Income taxes are a bit quirky, in that if your federal AGI is low (under $55k for MFJ), you can get a “low and middle income” tax credit, which incentivizes you to have tax exempt bonds even if your federal tax bracket would normally suggest that you shouldn’t. There is a also, at least for a few more years, a medical expense deduction that lets you reduce your NM taxable income anywhere from 10%, 15%, or (I think) 25%, depending on your income.
NM has also recently been flush with cash, so there were income tax rebate checks that went out last year and there is a talk of additional checks next year.
More to your point though, I figure that as long as our property and income taxes (combined) are less than what property taxes alone would be in Texas, we come out ahead. So far, based on my calculations, we have. But I am also not engaged in Roth conversions or much selling of stock or the like, as we just live off our dividends and interest. If we had a lot of capital gains or the like, things might be different.
And filing the NM income tax form is an additional hassle that we didn’t have in Texas, but it isn’t that bad. Although I do have to say that that instruction book could use a good proofreader and editor.
Las Cruces is a nice town. Too hot for me, but I’d certainly consider moving there otherwise. Caliche’s and Habaneros alone would make living there worth it.
Most experiences are better imagined.
-
- Posts: 2032
- Joined: Sun Aug 23, 2020 2:23 pm
Re: Was moving from a no income tax state to an income tax state really that bad?
All states need to generate tax revenue in someway, no income tax states rely on other sources you will be paying into. IMO there is no free rides.
Re: Was moving from a no income tax state to an income tax state really that bad?
True; although some just scrape by with poor infrastructure, schools etc.DoubleComma wrote: ↑Thu Dec 15, 2022 1:19 pm All states need to generate tax revenue in someway, no income tax states rely on other sources you will be paying into. IMO there is no free rides.
Stay hydrated; don't sweat the small stuff
-
- Posts: 1552
- Joined: Thu Mar 01, 2018 11:49 am
- Location: In the desert
Re: Was moving from a no income tax state to an income tax state really that bad?
Well put. If you don’t get taxed one way, you will get taxed in another way. There are other state-specific costs that many don’t consider, e.g., cost of license plates, gasoline taxes, etc.DoubleComma wrote: ↑Thu Dec 15, 2022 1:19 pm All states need to generate tax revenue in someway, no income tax states rely on other sources you will be paying into. IMO there is no free rides.
-
- Posts: 1830
- Joined: Tue Feb 07, 2017 8:08 am
Re: Was moving from a no income tax state to an income tax state really that bad?
I would only look at the total figure when comparing one state to the other. How much more/less money can you save is the number that's going to have the most impact.
For example when I went from California to upstate New York my salary went down, but my cost of living also did by roughly the same amount.
But regarding state taxation, although they all earn money, some take a larger percentage than others (and some have a larger government to spend it on than others). While there is no "free lunch", there are "different size lunches."
For example when I went from California to upstate New York my salary went down, but my cost of living also did by roughly the same amount.
But regarding state taxation, although they all earn money, some take a larger percentage than others (and some have a larger government to spend it on than others). While there is no "free lunch", there are "different size lunches."
45% Total Stock Market | 52% Consumer Staples | 3% Short Term Reserves
Re: Was moving from a no income tax state to an income tax state really that bad?
Depending upon your specific circumstances you can come out well ahead or well behind dependent upon which state and area you choose.DoubleComma wrote: ↑Thu Dec 15, 2022 1:19 pm All states need to generate tax revenue in someway, no income tax states rely on other sources you will be paying into. IMO there is no free rides.
Re: Was moving from a no income tax state to an income tax state really that bad?
Sales tax can be a real hit for families with major expenses in high sales tax states. You never really see this all on one piece of paper so it can be overlooked.
Stay hydrated; don't sweat the small stuff
Re: Was moving from a no income tax state to an income tax state really that bad?
In general they get it from you somehow. For example, Texas has no income tax, but they are top 10 for property and sales/use tax burden. Oregon has no sales tax, but is second highest for property tax. Most states fall into the average range of 7-9% overall average tax burden, so it doesn't make a huge difference overall.
Although some states are just bad for every kind of tax, like New York...
Although some states are just bad for every kind of tax, like New York...
-
- Posts: 1405
- Joined: Tue Feb 14, 2012 11:31 am
Re: Was moving from a no income tax state to an income tax state really that bad?
No love for the great state of California?
- Californian here
.
To the OP, you make enough money and have the right attitude where the few % of income tax is unlikely to change your future financial security. Go be where you want to be!
-
- Posts: 410
- Joined: Fri Nov 19, 2021 12:38 pm
Re: Was moving from a no income tax state to an income tax state really that bad?
This. I pay my income tax and in exchange I get a state that consistently rates at or near the top in terms of qualify of life, human development index, and happiness.DoubleComma wrote: ↑Thu Dec 15, 2022 1:19 pm All states need to generate tax revenue in someway, no income tax states rely on other sources you will be paying into. IMO there is no free rides.
Re: Was moving from a no income tax state to an income tax state really that bad?
Not trying to turn this thread political. We have traveled in an RV to 48 states in the past three years. TL;DR there are some high tax areas with terrible roads, run down infrastructure, high crime, and poor public services and low tax areas with good roads, low crime, good infrastructure, and good public services and vice versa. I bet if you dropped any person on this forum into a random city they would not be able to tell you the tax rate if they did not know it beforehand.beardsicles wrote: ↑Thu Dec 15, 2022 1:45 pmThis. I pay my income tax and in exchange I get a state that consistently rates at or near the top in terms of qualify of life, human development index, and happiness.DoubleComma wrote: ↑Thu Dec 15, 2022 1:19 pm All states need to generate tax revenue in someway, no income tax states rely on other sources you will be paying into. IMO there is no free rides.
Re: Was moving from a no income tax state to an income tax state really that bad?
It looks like you'd have to be earning well over $1 million a year to get into that bracket. Hopefully the good outweighs the bad for you.Journeyman510 wrote: ↑Thu Dec 15, 2022 1:08 pm Depends on the state and your situation. I'm sitting at 13.3% in California. We came from WA. So yeah, it's bad.
-
- Posts: 424
- Joined: Sun Apr 24, 2022 10:30 pm
Re: Was moving from a no income tax state to an income tax state really that bad?
The problem with CA income taxes starts much earlier -- a single filer has the 9.3% income tax rate starting at $61,215. And the sales tax rate in LA County (with 25% of the state population) is anywhere from 9.50% to 10.25%.LilyFleur wrote: ↑Thu Dec 15, 2022 1:58 pmIt looks like you'd have to be earning well over $1 million a year to get into that bracket. Hopefully the good outweighs the bad for you.Journeyman510 wrote: ↑Thu Dec 15, 2022 1:08 pm Depends on the state and your situation. I'm sitting at 13.3% in California. We came from WA. So yeah, it's bad.
-
- Posts: 1405
- Joined: Tue Feb 14, 2012 11:31 am
Re: Was moving from a no income tax state to an income tax state really that bad?
WestCoastPhan wrote: ↑Thu Dec 15, 2022 2:08 pmThe problem with CA income taxes starts much earlier -- a single filer has the 9.3% income tax rate starting at $61,215. And the sales tax rate in LA County (with 25% of the state population) is anywhere from 9.50% to 10.25%.LilyFleur wrote: ↑Thu Dec 15, 2022 1:58 pmIt looks like you'd have to be earning well over $1 million a year to get into that bracket. Hopefully the good outweighs the bad for you.Journeyman510 wrote: ↑Thu Dec 15, 2022 1:08 pm Depends on the state and your situation. I'm sitting at 13.3% in California. We came from WA. So yeah, it's bad.
At least it's not 10.75% like me up in norCal.
-
- Posts: 299
- Joined: Thu Aug 27, 2020 9:22 pm
Re: Was moving from a no income tax state to an income tax state really that bad?
Long term, which location has a more secure water supply?
I think Tucson would feel more like a “city”- more to do, more entertainment options, reasonable drive to Phoenix, decent airport, and good medical.
There isn’t a lot to do in Las Cruces.
Re: Was moving from a no income tax state to an income tax state really that bad?
I'm going to be moving from a no income tax state to one with an income tax. Based on my income guesstimate of $35k (single filer, no dependents) for 2023 my state taxes will be $566.47. For federal taxes I will pay roughly $0 as the income is from qualified dividends.
So, no it shouldn't be that big of a deal in my case.
If you retire early you will want to keep your income as low as possible so that you can get the largest ACA subsidy and also stay withing the threshold to pay $0 federal taxes (up to like $40k for a single filer).
So, no it shouldn't be that big of a deal in my case.
If you retire early you will want to keep your income as low as possible so that you can get the largest ACA subsidy and also stay withing the threshold to pay $0 federal taxes (up to like $40k for a single filer).
Retired in 2022 at the age of 46. Living off of dividends.
Re: Was moving from a no income tax state to an income tax state really that bad?
We were wanting a larger lot for our home (1+ Acre) . We are coming to the conclusion that you price that out in both cities, we are thinking it's a wash because you would be a lot closer to the city center in Las Cruces than Tucson for the same $.Sprucebark wrote: ↑Thu Dec 15, 2022 2:20 pmLong term, which location has a more secure water supply?
I think Tucson would feel more like a “city”- more to do, more entertainment options, reasonable drive to Phoenix, decent airport, and good medical.
There isn’t a lot to do in Las Cruces.
Re: Was moving from a no income tax state to an income tax state really that bad?
I live the Dallas area, and the combination of property and sales taxes is pretty oppressive. As someone noted earlier, sales taxes add up quickly, but by design you tend to not pay much attention to them. Early in my career I said I'd never live in an income tax state, but I don't have that view anymore.
Re: Was moving from a no income tax state to an income tax state really that bad?
I'm well aware, as I am single.WestCoastPhan wrote: ↑Thu Dec 15, 2022 2:08 pmThe problem with CA income taxes starts much earlier -- a single filer has the 9.3% income tax rate starting at $61,215. And the sales tax rate in LA County (with 25% of the state population) is anywhere from 9.50% to 10.25%.LilyFleur wrote: ↑Thu Dec 15, 2022 1:58 pmIt looks like you'd have to be earning well over $1 million a year to get into that bracket. Hopefully the good outweighs the bad for you.Journeyman510 wrote: ↑Thu Dec 15, 2022 1:08 pm Depends on the state and your situation. I'm sitting at 13.3% in California. We came from WA. So yeah, it's bad.
It's a choice.
Because my children (in their 20s) live near me, I won't be moving away for the foreseeable future.
I try to focus on the positives: getting to see my young adult children, living near my friends, being able to walk out my front door and take a walk outside in beautiful weather most days out of the year.
- Mel Lindauer
- Moderator
- Posts: 35757
- Joined: Mon Feb 19, 2007 7:49 pm
- Location: Daytona Beach Shores, Florida
- Contact:
Re: Was moving from a no income tax state to an income tax state really that bad?
That's not true here in Florida. Residents pay no income tax and real estate taxes are very low when compared to PA, where I came from. Here in Florida, tourists generate a huge part of our state's revenue and the homesteaded residents get the benefit.DoubleComma wrote: ↑Thu Dec 15, 2022 1:19 pm All states need to generate tax revenue in someway, no income tax states rely on other sources you will be paying into. IMO there is no free rides.
Best Regards - Mel |
|
Semper Fi
Re: Was moving from a no income tax state to an income tax state really that bad?
deleted
Last edited by Zeno on Sat Dec 17, 2022 3:01 pm, edited 1 time in total.
Re: Was moving from a no income tax state to an income tax state really that bad?
The emphasis on financial consequences is understandable but obviously there are other considerations: family; jobs; quality of jobs; schools; services; utilities like roads and water; weather; "culture" meaning the arts and culture meaning the kind of people who will be your neighbors; crime and types of crime; health care; transportation; educational attainment; entertainment. I have lived in many states and worked in several nations and traveled extensively but I know that in the final analysis home is where the heart is.
Re: Was moving from a no income tax state to an income tax state really that bad?
+1. This is a consideration for anywhere in the desert SW (or in the West overall, actually).Sprucebark wrote: ↑Thu Dec 15, 2022 2:20 pmLong term, which location has a more secure water supply?
I think Tucson would feel more like a “city”- more to do, more entertainment options, reasonable drive to Phoenix, decent airport, and good medical.
There isn’t a lot to do in Las Cruces.
I would not let state tax influence my decision in any way. (Well, maybe if it was California...)
Move to the place you like the best. There are always plusses and minuses to taxes. Here in PA we get no deduction for retirement contribs, but they are untaxed coming out. If you're worried about an extra few percent of tax on your pay, I'd find some way to economize in some other way while moving to the place you like the most.
Re: Was moving from a no income tax state to an income tax state really that bad?
I agree.dagsboro wrote: ↑Thu Dec 15, 2022 2:59 pm The emphasis on financial consequences is understandable but obviously there are other considerations: family; jobs; quality of jobs; schools; services; utilities like roads and water; weather; "culture" meaning the arts and culture meaning the kind of people who will be your neighbors; crime and types of crime; health care; transportation; educational attainment; entertainment. I have lived in many states and worked in several nations and traveled extensively but I know that in the final analysis home is where the heart is.
-
- Posts: 16
- Joined: Mon Jan 18, 2021 5:44 pm
Re: Was moving from a no income tax state to an income tax state really that bad?
I'm familiar with Tucson and have had family live there for decades. The taxes are low and the cost of living is very reasonable. There are also a ton of outdoor activities (hiking, biking, national parks, mountains, etc) available if that's of interest to you.
-
- Posts: 62
- Joined: Wed Apr 07, 2021 8:56 pm
Re: Was moving from a no income tax state to an income tax state really that bad?
The same is most likely true for NevadaMel Lindauer wrote: ↑Thu Dec 15, 2022 2:51 pmThat's not true here in Florida. Residents pay no income tax and real estate taxes are very low when compared to PA, where I came from. Here in Florida, tourists generate a huge part of our state's revenue and the homesteaded residents get the benefit.DoubleComma wrote: ↑Thu Dec 15, 2022 1:19 pm All states need to generate tax revenue in someway, no income tax states rely on other sources you will be paying into. IMO there is no free rides.
-
- Posts: 299
- Joined: Thu Aug 27, 2020 9:22 pm
Re: Was moving from a no income tax state to an income tax state really that bad?
That’s a large lot. You will find those on the outskirts of Tucson- some nice ones, but a lot of them look like something out of a mad max movie!! The land itself is kind of unremarkable- it will be dry, dusty, and you won’t really be able to grow much on it without intensive effort and watering. It’s pretty much scrubland full of mesquite, cactus, and ocotillo. You don’t see very many green yards in Tucson (I presume it’s a water saving regulation). I think you would be better off getting a nice house in the main town area and forget the acre.MikeZ wrote: ↑Thu Dec 15, 2022 2:24 pmWe were wanting a larger lot for our home (1+ Acre) . We are coming to the conclusion that you price that out in both cities, we are thinking it's a wash because you would be a lot closer to the city center in Las Cruces than Tucson for the same $.Sprucebark wrote: ↑Thu Dec 15, 2022 2:20 pmLong term, which location has a more secure water supply?
I think Tucson would feel more like a “city”- more to do, more entertainment options, reasonable drive to Phoenix, decent airport, and good medical.
There isn’t a lot to do in Las Cruces.
Once you get your nice house, you can adopt a desert tortoise.
https://www.azgfd.com/wildlife/nongamem ... ptivecare/
“Adopters should also consider that healthy tortoises can live upwards of 80-100 years and should have a long-term plan in place in either a will or other succession plan as the tortoise may outlive its caretaker.”
If you cast a wider net and look down the highway 19 corridor you will find some nice places there that have some land.
-
- Posts: 231
- Joined: Thu Apr 21, 2022 9:04 pm
Re: Was moving from a no income tax state to an income tax state really that bad?
There is a reason I haven't moved. California also taxes capital gains as income so my long term capital gains is pushing 40%. But at least I have great roads, amazing public schools, low crime, etc. Oh wait...I have none of that. The weather is pretty good.LilyFleur wrote: ↑Thu Dec 15, 2022 1:58 pmIt looks like you'd have to be earning well over $1 million a year to get into that bracket. Hopefully the good outweighs the bad for you.Journeyman510 wrote: ↑Thu Dec 15, 2022 1:08 pm Depends on the state and your situation. I'm sitting at 13.3% in California. We came from WA. So yeah, it's bad.
-
- Posts: 1000
- Joined: Fri Oct 12, 2018 12:29 pm
Re: Was moving from a no income tax state to an income tax state really that bad?
+1Mel Lindauer wrote: ↑Thu Dec 15, 2022 2:51 pmThat's not true here in Florida. Residents pay no income tax and real estate taxes are very low when compared to PA, where I came from. Here in Florida, tourists generate a huge part of our state's revenue and the homesteaded residents get the benefit.DoubleComma wrote: ↑Thu Dec 15, 2022 1:19 pm All states need to generate tax revenue in someway, no income tax states rely on other sources you will be paying into. IMO there is no free rides.
I'm currently in FL but have lived in 7 states. The other 6 had a state income tax. Our overall taxes are substantially lower in FL. No state income tax, 6.5% sales tax, and our property tax is 0.6% of the current value of our house (partly due to the great homestead exemption in FL).
The calculation will be different for everyone and has a lot to do with your income. If you make $50k, then other taxes will make a big impact and may more than offset the amount of state income tax you have to pay. If you make $500k, it's much more likely that the state income tax you pay will dwarf all your other state and local taxes. The higher your income, the more benefit you get for living in no income tax states.
Last edited by PowderDay9 on Thu Dec 15, 2022 5:49 pm, edited 1 time in total.
Re: Was moving from a no income tax state to an income tax state really that bad?
About 10%.Mel Lindauer wrote: ↑Thu Dec 15, 2022 2:51 pm Here in Florida, tourists generate a huge part of our state's revenue.
Re: Was moving from a no income tax state to an income tax state really that bad?
I live in Las Cruces if you have any general questions.MikeZ wrote: ↑Thu Dec 15, 2022 12:22 pm Some background:
Married, no kids.
About $220k combined gross income.
Currently living in a no income tax state. We have been living way below our means as far as car and house these past few years so not a lot of baseline as far as property taxes. Thinking about moving to AZ (Tucson) or NM (Las Cruces). Thinking $400-$500k for a home.
We have done the cost estimates and all on the tax costs (~$6-9K/yr) but I was was wondering for those folks that actually make the move from no-tax to tax; what your real life experience has been as far as how much the cost impacted your finances?
I moved from TX and can't really tell a difference. There are state taxes here but they aren't bad, and the cost of living is pretty low so your $$$ goes a long way here compared to many other places. In TX the property taxes are outrageous. They are gonna get their $$$ somehow...
Re: Was moving from a no income tax state to an income tax state really that bad?
No impact. Employer paid me COLA to account for the differences.
not financial advice
- Mel Lindauer
- Moderator
- Posts: 35757
- Joined: Mon Feb 19, 2007 7:49 pm
- Location: Daytona Beach Shores, Florida
- Contact:
Re: Was moving from a no income tax state to an income tax state really that bad?
Don't know where you got your figures, but it was 23% in 2014 and I'm sure it's even more now.billaster wrote: ↑Thu Dec 15, 2022 5:40 pmAbout 10%.Mel Lindauer wrote: ↑Thu Dec 15, 2022 2:51 pm Here in Florida, tourists generate a huge part of our state's revenue.
https://www.visitflorida.org/about-us/w ... ast-facts/
And Florida also has no estate tax and no inheritance tax.
Best Regards - Mel |
|
Semper Fi
Re: Was moving from a no income tax state to an income tax state really that bad?
That 23% is a percentage of sales taxes only. Sales taxes are only about one-third of taxes collected in Florida so that 23% is closer to 8% of total taxes. Property taxes are the largest amount.Mel Lindauer wrote: ↑Thu Dec 15, 2022 8:07 pmDon't know where you got your figures, but it was 23% in 2014 and I'm sure it's even more now.billaster wrote: ↑Thu Dec 15, 2022 5:40 pmAbout 10%.Mel Lindauer wrote: ↑Thu Dec 15, 2022 2:51 pm Here in Florida, tourists generate a huge part of our state's revenue.
https://www.visitflorida.org/about-us/w ... ast-facts/
And Florida also has no estate tax and no inheritance tax.
-
- Posts: 27
- Joined: Fri Mar 26, 2021 11:14 am
Re: Was moving from a no income tax state to an income tax state really that bad?
My husband and I moved from TX to MA and don’t regret it. We have a baby now so we do play the game of if we lived in Texas we wouldn’t have to play taxes.
It takes us about a second to remember why we moved and why we love MA better.
We also lived below our means and could continue to save. Make the jump! You can always move back!
It takes us about a second to remember why we moved and why we love MA better.
We also lived below our means and could continue to save. Make the jump! You can always move back!
Re: Was moving from a no income tax state to an income tax state really that bad?
It's what all states try to do to a certain extent. Tax those outside your borders more than those inside. That's why, in most states, hotel rooms, rental cars, sometimes restaurants are taxed at higher rates than other products. And many things that are bought only by people living there, for example, groceries, or downloadable software that is taxed based on the billing address of your credit card (i.e. probably where you vote) are not taxed at all.holawhatup1 wrote: ↑Thu Dec 15, 2022 4:04 pmThe same is most likely true for NevadaMel Lindauer wrote: ↑Thu Dec 15, 2022 2:51 pmThat's not true here in Florida. Residents pay no income tax and real estate taxes are very low when compared to PA, where I came from. Here in Florida, tourists generate a huge part of our state's revenue and the homesteaded residents get the benefit.DoubleComma wrote: ↑Thu Dec 15, 2022 1:19 pm All states need to generate tax revenue in someway, no income tax states rely on other sources you will be paying into. IMO there is no free rides.
Of course NV and FL have a unique ability to possibly push their taxation of nonresidents further because of the tourism the state attracts so they don't have to try to decrease tax rates to encourage tourism.
Made money. Lost money. Learned to stop counting.
Re: Was moving from a no income tax state to an income tax state really that bad?
States like New York and California pull in similar amounts of tourist revenue as Florida. But because Florida's economy is so much smaller, that same amount of tourist revenue represents a larger portion of its economy.
-
- Posts: 1000
- Joined: Fri Oct 12, 2018 12:29 pm
Re: Was moving from a no income tax state to an income tax state really that bad?
Not sure where you're seeing the 1/3 figure but multiple sources say around 80% of Florida State revenue comes from sales tax.billaster wrote: ↑Thu Dec 15, 2022 8:58 pmThat 23% is a percentage of sales taxes only. Sales taxes are only about one-third of taxes collected in Florida so that 23% is closer to 8% of total taxes. Property taxes are the largest amount.Mel Lindauer wrote: ↑Thu Dec 15, 2022 8:07 pmDon't know where you got your figures, but it was 23% in 2014 and I'm sure it's even more now.billaster wrote: ↑Thu Dec 15, 2022 5:40 pmAbout 10%.Mel Lindauer wrote: ↑Thu Dec 15, 2022 2:51 pm Here in Florida, tourists generate a huge part of our state's revenue.
https://www.visitflorida.org/about-us/w ... ast-facts/
And Florida also has no estate tax and no inheritance tax.
https://www.floridatrend.com/article/32 ... -its-money
Property taxes in Florida mostly go to the county and public schools.
- cheese_breath
- Posts: 11765
- Joined: Wed Sep 14, 2011 7:08 pm
Re: Was moving from a no income tax state to an income tax state really that bad?
One way or another the state is going to get the money it needs to run it's business. I moved from an income tax state (Michigan) to a no income tax state (Texas). Good deal, right? But the Texas property taxes are about twice what I paid in Michigan.
The surest way to know the future is when it becomes the past.
Re: Was moving from a no income tax state to an income tax state really that bad?
Through business taxes?Mel Lindauer wrote: ↑Thu Dec 15, 2022 2:51 pmThat's not true here in Florida. Residents pay no income tax and real estate taxes are very low when compared to PA, where I came from. Here in Florida, tourists generate a huge part of our state's revenue and the homesteaded residents get the benefit.DoubleComma wrote: ↑Thu Dec 15, 2022 1:19 pm All states need to generate tax revenue in someway, no income tax states rely on other sources you will be paying into. IMO there is no free rides.
“And how shall I think of you?' He considered a moment and then laughed. 'Think of me with my nose in a book!” |
― Susanna Clarke, Jonathan Strange & Mr Norrell