Was moving from a no income tax state to an income tax state really that bad?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
Hebell
Posts: 954
Joined: Wed Aug 12, 2020 1:56 am
Location: Boca Raton, FL

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by Hebell »

Property taxes don't matter to my husband and me any more, as we plan to rent. After doing the starter home, large downtown luxury home, and Florida condominium, we only want a VERY nice apartment, or independent or assisted living when the time comes. We can get by with 750 sq ft. Easily. (Caring for two failing parents with too much stuff, and all the grief that ensued, had us radically downsizing in 2015. What a having little stuff has been)

But even with wonderful lookup tables from Kiplingers and Kitces, I think this tax season I will buy several different state add-ons to TurboTax. So I can change my home address and perturb the TurboTax state returns so I can evaluate a wide variation of what-if scenarios. (And add sales tax on top of the result based on my anticipated discretionary income)

Thanks to the previous writers who pointed out all sorts of arcane state taxes that just don't show up in the magazine articles.
Nyc10036
Posts: 1663
Joined: Wed Oct 05, 2016 6:29 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by Nyc10036 »

Hebell wrote: Sat Dec 17, 2022 2:47 pm Property taxes don't matter to my husband and me any more, as we plan to rent. After doing the starter home, large downtown luxury home, and Florida condominium, we only want a VERY nice apartment, or independent or assisted living when the time comes. We can get by with 750 sq ft. Easily. (Caring for two failing parents with too much stuff, and all the grief that ensued, had us radically downsizing in 2015. What a having little stuff has been)

But even with wonderful lookup tables from Kiplingers and Kitces, I think this tax season I will buy several different state add-ons to TurboTax. So I can change my home address and perturb the TurboTax state returns so I can evaluate a wide variation of what-if scenarios. (And add sales tax on top of the result based on my anticipated discretionary income)

Thanks to the previous writers who pointed out all sorts of arcane state taxes that just don't show up in the magazine articles.
You may rent, but your landlord has to pay taxes.
He has to make a profit.
If his taxes go up, your rent is following.
MarkerFM
Posts: 843
Joined: Fri Nov 30, 2018 3:18 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by MarkerFM »

Here's our situation. Sold house in Illinois to buy in Florida in 2015. RE taxes in FL are currently .6% of value, currently 1.6% on the IL house. FL RE tax has gone down by 9% in this time, the IL tax has gone up 48%. Florida has appreciated 118%, IL 24%.

Sales tax in FL: 7%, IL 8%.

No income tax of course in FL versus 4.95% in IL.

The kicker is the 16% death tax in IL where there is none in Florida.

As Mel said, indeed it is no wonder people are moving to Florida. Yes, insurance is higher (both auto and home), but doesn't begin to cover the tax hole.
User avatar
FrugalInvestor
Posts: 6213
Joined: Thu Nov 06, 2008 11:20 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by FrugalInvestor »

Arizona's income taxes were reduced in 2022 and they will be reduced again in 2023.....

https://ktar.com/story/5268424/arizona- ... ear-early/

And, no, it was a very good move for us. Other factors more than offset the state taxes.
Have a plan, stay the course and simplify. Then ignore the noise!
tj
Posts: 9317
Joined: Wed Dec 23, 2009 11:10 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by tj »

Mel Lindauer wrote: Thu Dec 15, 2022 2:51 pm
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.
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.
Florida has extremely high home and auto insurance premiums.
PowderDay9
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?

Post by PowderDay9 »

tj wrote: Sat Dec 17, 2022 8:11 pm
Mel Lindauer wrote: Thu Dec 15, 2022 2:51 pm
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.
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.
Florida has extremely high home and auto insurance premiums.
Maybe it's a little higher than other states but I wouldn't say extremely high.

Our home insurance did just go up a lot to $2000 a year. The last few years was between $1200-$1400.

Auto insurance for 2 cars/drivers is about $1800 a year and we have high limits at $1M bodily injury liability and $400k property damage liability.

So we're at about $4k for both coverages in FL. Even if these went to zero in another state, the state income tax would be multiples of this for us.

Florida is slightly above the national average for property insurance but surprisingly there are a bunch of states where it costs more.
smitcat
Posts: 13227
Joined: Mon Nov 07, 2016 9:51 am

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by smitcat »

quantAndHold wrote: Sat Dec 17, 2022 9:45 am I still don’t understand the fixation on taxes, especially income tax. Total cost of living is more important, isn’t it? I mean, for example, besides property tax, Texas and Florida have some of the highest homeowners, car, and health insurance rates in the country, and people living in those states pay thousands more for insurance every year than I do in California, for example.

Between New Mexico and Arizona, I would pick the place with the highest quality of life for me and my family. The difference in taxes is going to be a drop in the bucket.
"I still don’t understand the fixation on taxes, especially income tax. Total cost of living is more important, isn’t it?"
I agree entirely.
"I mean, for example, besides property tax, Texas and Florida have some of the highest homeowners, car, and health insurance rates in the country,"
States can be very large and things like homeowners' insurance and car insurance are levied by zip code.
In NY and in Florida those costs can vary by 2-3X dependent upon the zip code and/or the exact construction of the home.

FWIW...
- our home in Florida has more or less the same homeowner's insurance cost as our home in NY.
- our cars/trucks have the same insurance rates as they have in NY.
- Health care costs in Fl. about 15% higher
- sales tax rate much lower in Fl.
- utilities much lower in Fl.
- no income tax in Fl.
- costs and fees for cars, boats, parks, etc are higher in NY
smitcat
Posts: 13227
Joined: Mon Nov 07, 2016 9:51 am

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by smitcat »

tj wrote: Sat Dec 17, 2022 8:11 pm
Mel Lindauer wrote: Thu Dec 15, 2022 2:51 pm
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.
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.
Florida has extremely high home and auto insurance premiums.
Auto...
These costs depend upon the exact zip code you are in and can vary by up to 300%.
Home...
These costs vary dependent upon the exact location and the construction of the home, as one example they can vary by about 200% on the same sized next door homes dependent upon construction alone.
JackoC
Posts: 4710
Joined: Sun Aug 12, 2018 11:14 am

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by JackoC »

MikeZ wrote: Thu Dec 15, 2022 1:57 pm
beardsicles wrote: Thu Dec 15, 2022 1:45 pm
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.
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.
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.
Just starting on the thread, but I guess it didn't get too 'political' since it's got more pages and is still open. :happy But the idea there's some 'efficient market' in state taxes vs services that all evens out everywhere is just nonsense. Especially when it comes to 'infrastructure' in the traditional sense. If anything that's inversely related to overall taxation level empirically IME (not limited to the fact our state, NJ, is among the most highly taxed and the roads are terrible, I've also noticed it on nationwide road trips in a sporty car with stiff suspension :happy ). Education is more complicated along a number of axes, such as what really causes 'good schools', spending or the kids who go there? School performance also varies widely within almost any state (as does crime). And it's not necessarily personally relevant once your kids are grown or you don't have any, whereas everyone uses the roads and that's relatively (not absolutely) more uniform by state as a general rule IME.

I live in a high tax state. I've no immediate plan to move. But 'you get what you pay for': obviously not so. Especially if you make a higher income, in which case the system is *designed* for you to get less than what you pay as the only way others can get more than what they pay for. That's reality not an opinion. The opinion is how you feel about that (I don't waste time grumbling about it if I'm not going to move) and whether you actually move, which actually matters because it does *not* even out everywhere for people with at least fairly high incomes.
Nyc10036
Posts: 1663
Joined: Wed Oct 05, 2016 6:29 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by Nyc10036 »

JackoC wrote: Sun Dec 18, 2022 1:37 pm (not limited to the fact our state, NJ, is among the most highly taxed and the roads are terrible
Not as terrible as the roads Bucks and Montgomery counties outside Philadelphia.
I hate driving there when I have worked there.
At least where I live, NJ roads aren't that bad.
User avatar
TomatoTomahto
Posts: 17100
Joined: Mon Apr 11, 2011 1:48 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by TomatoTomahto »

Makefile wrote: Fri Dec 16, 2022 2:31 pm It seems state income tax differences are fairly easily overcome for other reasons--family, job, weather, etc.

How do people feel about state estate taxes, particularly the $1M holdouts?
We live in MA. The estate tax situation added complexity (and thus cost) to our estate plan; I literally had to ask our attorney for a flowchart describing the various trusts that have to be created after each of us dies. In MA, the estate tax percentage quickly rises to 16%, so it ain’t peanuts. If the estate is over $1M essentially the entire estate is subject to tax.

There has been talk of change, but I have not seen it.

All that said, we love Massachusetts and intend to remain here.
I get the FI part but not the RE part of FIRE.
guyfromct
Posts: 556
Joined: Sun Mar 13, 2022 12:43 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by guyfromct »

JackoC wrote: Sun Dec 18, 2022 1:37 pm
MikeZ wrote: Thu Dec 15, 2022 1:57 pm
beardsicles wrote: Thu Dec 15, 2022 1:45 pm
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.
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.
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.
Just starting on the thread, but I guess it didn't get too 'political' since it's got more pages and is still open. :happy But the idea there's some 'efficient market' in state taxes vs services that all evens out everywhere is just nonsense. Especially when it comes to 'infrastructure' in the traditional sense. If anything that's inversely related to overall taxation level empirically IME (not limited to the fact our state, NJ, is among the most highly taxed and the roads are terrible, I've also noticed it on nationwide road trips in a sporty car with stiff suspension :happy ). Education is more complicated along a number of axes, such as what really causes 'good schools', spending or the kids who go there? School performance also varies widely within almost any state (as does crime). And it's not necessarily personally relevant once your kids are grown or you don't have any, whereas everyone uses the roads and that's relatively (not absolutely) more uniform by state as a general rule IME.

I live in a high tax state. I've no immediate plan to move. But 'you get what you pay for': obviously not so. Especially if you make a higher income, in which case the system is *designed* for you to get less than what you pay as the only way others can get more than what they pay for. That's reality not an opinion. The opinion is how you feel about that (I don't waste time grumbling about it if I'm not going to move) and whether you actually move, which actually matters because it does *not* even out everywhere for people with at least fairly high incomes.
I’d go further and say there’s almost no correlation between school quality and state tax rates, that’s more a function of the local district, there are great schools in every state and those districts tend to combine high property values with high socioeconomic indicators. Roads are mostly local at least by mileage and road quality is hugely impacted by weather ceteris paribus roads up north with lots of freeze/thaw are far more susceptible to damage and potholes than in areas without that.
BernardShakey
Posts: 1134
Joined: Tue Jun 25, 2019 10:52 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by BernardShakey »

Journeyman510 wrote: Fri Dec 16, 2022 6:32 pm
Mel Lindauer wrote: Fri Dec 16, 2022 6:01 pm
billaster wrote: Fri Dec 16, 2022 2:05 pm Sorry, Mel, but anecdotes are no substitute for data:

https://taxfoundation.org/state-local-tax-collections/

Florida collects about 35% from sales taxes, 38% from property taxes and 24% from other taxes. Property taxes are the single largest source of tax revenue in Florida.
1. I provided real-life data.
2. Using the link provided above, Florida ranks #42 in total tax burdens. So there are 41 states that have higher tax burdens. I'm perfectly happy with that low standing.
3. There are no state property taxes in Florida; they're all local.
4. A lot of the property taxes in Florida are paid by residents of other states who own condos and future retirement/winter homes in Florida. Since they aren't full-time residents of Florida, they don't qualify for the homestead exemption. That means that their taxes go up each year with the rapid increase in property values whereas homesteaded residents don't have that problem.
5. So again, lots of taxes are paid by tourists and non-residents, resulting in lower taxes for residents.
6. And another thing to consider is that, unlike many other states, there are no estate or inheritance taxes.

So, all things considered, I'm a happy Florida transplant resident. Now if we could just dispense with the occasional hurricane, it would be perfect. :beer
I'm surprised [Off-topic comment removed - moderator ClaycordJCA]California is only #7 on the list. :D
In CA, property taxes are capped at no more than 2% increase per year. So if you bought your house a long time ago, your property taxes haven't skyrocketed like they do in other states with no cap or a higher cap.

A lot of folks complain about the dollar value of their property taxes in CA because property valuations are high. But, they never seem to complain about that high valuation when they sell or pass the property along to their heirs. I have relatives in states where property values were flat for literally 10-15 years with a high property tax rate to boot.

The appreciation of my property in CA dwarfs the property tax burden. It's the Golden State in that sense.

Sales tax varies by region so a bit less onerous in some areas. State income tax rates are particularly high for the wealthy / high earners. For retirees with modest and even upper middle class retirement incomes, who have owned their own homes for decades, CA is not as expensive as lots of folks in other states make it out to be.

It's not cheap by any means --- and certainly, starting out here without a healthy income is a challenge, but don't believe all the slams from people who have never lived in the state. The cost of housing in CA is a bigger issue than the taxes.
An important key to investing is having a well-calibrated sense of your future regret.
JackoC
Posts: 4710
Joined: Sun Aug 12, 2018 11:14 am

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by JackoC »

Nyc10036 wrote: Sun Dec 18, 2022 2:08 pm
JackoC wrote: Sun Dec 18, 2022 1:37 pm (not limited to the fact our state, NJ, is among the most highly taxed and the roads are terrible
Not as terrible as the roads Bucks and Montgomery counties outside Philadelphia.
I hate driving there when I have worked there.
At least where I live, NJ roads aren't that bad.
They are pretty bad here in inner NY area, Hudson where we live and Bergen where we often drive on local errands. True though, it's not hard to beat the road quality in many places in PA. Obviously this is only partly about state tax/spend*, also it's just more expensive to keep roads in good shape where it freeze/thaws constantly in winter like NJ/PA vs. places where it never freezes or where the ground stays frozen continuously for a lot of the winter. But comes back to taxes being a real $ number and 'what you get' for those in any direct sense** loosely correlated at best.

*that's hard to disentangle for a lot of local services. There are significant transfers from state to local in NJ for both schools and general municipal budgets, and federal money finds its way into both as well.
**'feeling good' about your state/local taxes is fine if you do (not to be debated here), but I think can be distinguished from tangible benefit in govt services *you* get in a direct and practical sense.
User avatar
Raraculus
Posts: 336
Joined: Sat Jul 20, 2019 10:43 am

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by Raraculus »

jebmke wrote: Thu Dec 15, 2022 12:46 pmI vowed early to not be swayed by money decisions as the primary factor on where I lived; life is too short, as they say.
That! I've been reading this thread (& other similar threads) with great interest. I would very much like to move away from my HCOL residence to a MCOL/LCOL residence upon retirement. I can see that the overall tax burden really doesn't vary all that much between the states, even in states with zero income taxes. Those states will make up for it by taxing in other areas of daily life.

Rather, I look to the quality of life and ordinary costs. It does me no good to move to another HCOL area, even if it's in a zero income tax state. I'm thinking of moving to a somewhat mountainous area in retirement. I would try to move to a MCOL area, as I feel that has the best bang for the buck - they usually have services, doctors, hospitals, airport, etc. all at a reasonable cost. Those states have income taxes, and I'm increasingly okay with that.
smitcat
Posts: 13227
Joined: Mon Nov 07, 2016 9:51 am

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by smitcat »

Raraculus wrote: Fri Dec 23, 2022 6:22 pm
jebmke wrote: Thu Dec 15, 2022 12:46 pmI vowed early to not be swayed by money decisions as the primary factor on where I lived; life is too short, as they say.
That! I've been reading this thread (& other similar threads) with great interest. I would very much like to move away from my HCOL residence to a MCOL/LCOL residence upon retirement. I can see that the overall tax burden really doesn't vary all that much between the states, even in states with zero income taxes. Those states will make up for it by taxing in other areas of daily life.

Rather, I look to the quality of life and ordinary costs. It does me no good to move to another HCOL area, even if it's in a zero income tax state. I'm thinking of moving to a somewhat mountainous area in retirement. I would try to move to a MCOL area, as I feel that has the best bang for the buck - they usually have services, doctors, hospitals, airport, etc. all at a reasonable cost. Those states have income taxes, and I'm increasingly okay with that.
"Those states will make up for it by taxing in other areas of daily life."
Not in our case.
bsteiner
Posts: 9151
Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by bsteiner »

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.
Top estate tax rates: Washington 20%, California 0%.
bsteiner
Posts: 9151
Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by bsteiner »

the_wiki wrote: Thu Dec 15, 2022 1:38 pm 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...
NYC can be a tax haven for some retirees. The property tax on homes is low (you can have a $1 million house in Brooklyn and only pay a few thousand dollars in property taxes). Federal and New York state and local government pensions are exempt from NYS and NYC income tax.

If you don't have chlidren, have a modest estate, and are leaving your estate to nieces and nephews, NJ's inheritance tax is 15% to 16%, whereas New York's estate tax has a $6,110,000 exclusion amount.
bsteiner
Posts: 9151
Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by bsteiner »

PowderDay9 wrote: Fri Dec 16, 2022 10:20 am ... New York state spends and taxes at about twice the dollar amount per capita as Florida. Does New York state provide twice as much benefit as Florida? Are their services, roads, etc twice as good? ...
...
Some are, some aren't.

Any list of top school districts or top high schools will have many more in New York than in Florida (or any other state).

New York has much less violent crime than Florida.

New York does a better job of plowing the snow than Florida.

The NYC area has better public transportation.

The courts in Florida process probate petitions much more quickly than in New York.
sandan
Posts: 629
Joined: Wed Apr 03, 2013 12:48 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by sandan »

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?
For a 220k household living substantially below their means, its a non-issue. The 401k limits etc. are quite generous for tax management.

If a household was heavily in debt, needed high cash flow during working years / retirement, they will have little or no flexibility to adjust.
spammagnet
Posts: 2477
Joined: Wed Apr 27, 2016 9:42 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by spammagnet »

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?
Consider a subscription to Maxifiplanner. You can model your current circumstances, then model the move and compare them. You'll have to estimate the change in earnings and housing cost yourself but, because it calculates all taxes in all states, it will take care of all of the tax effects. The output is quite detailed.

NB: there's Kool-Aid drinking involved. Rather than you telling it your cost of living needs, you tell it your gross income, planned savings contributions and fixed costs like housing. You enter future large expenses like college (if you had kids) or whatever. It figures out taxes and other fixed costs like Medicare, then tells you how much is left to maintain smooth discretionary spending.

Even if you don't embrace that strategy long-term, the comparison results will be informative and helpful in your decision.

In your case, I think the cost of a subscription for one year is more then justified.

I'm just a user and derive no benefit from this reply.

Edit: spellcheck word replacement error
Last edited by spammagnet on Mon Dec 26, 2022 9:28 pm, edited 1 time in total.
Soon2BXProgrammer
Posts: 3289
Joined: Mon Nov 24, 2014 10:30 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by Soon2BXProgrammer »

Nyc10036 wrote: Fri Dec 16, 2022 6:36 pm
Mel Lindauer wrote: Fri Dec 16, 2022 6:01 pm
3. There are no state property taxes in Florida; they're all local.
Are there any places with state property taxes?
Aren't all proprety taxes local?
Taxes are taxes.
I know WA had state wide property taxes. (And then local ones as well) There are probably other states.
Earned 43 (and counting) credit hours of financial planning related education from a regionally accredited university, but I am not your advisor.
Maverick3320
Posts: 1102
Joined: Tue May 12, 2015 2:59 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by Maverick3320 »

billaster wrote: Thu Dec 15, 2022 11:06 pm
hachiko wrote: Thu Dec 15, 2022 9:22 pm 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.
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.
Sounds like Florida is doing a better job.
Maverick3320
Posts: 1102
Joined: Tue May 12, 2015 2:59 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by Maverick3320 »

billaster wrote: Fri Dec 16, 2022 7:44 pm
smitcat wrote: Fri Dec 16, 2022 7:36 pm The facts are...
- we own homes in two states
- each home is about the same size
- each home is about the same value.
- one homes property taxes are about 1/2 the other home
The home with 50% of the property taxes is in a state which has no income tax.
You can utilize these facts whichever way you like.
Like I said, everyone's individual tax rate is their own. You tax rate is your own. Mel made a claim about Florida taxes in general which was false. I simply provided the facts.
Another anecdote: my parents (retired) used to split time between Wisconsin and Florida, while claiming residency in WI and doing roughly half the year in each location.

They claimed residency in Florida and they are saving approximately 6K/year in taxes.
User avatar
sunny_socal
Posts: 2732
Joined: Tue Mar 24, 2015 4:22 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by sunny_socal »

jebmke wrote: Thu Dec 15, 2022 1:22 pm
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.
True; although some just scrape by with poor infrastructure, schools etc.
And some, like CA, have high taxes and poor infrastructure & schools!
OpenMinded1
Posts: 1568
Joined: Wed Feb 05, 2020 8:27 am

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by OpenMinded1 »

MarkerFM wrote: Sat Dec 17, 2022 4:07 pm Here's our situation. Sold house in Illinois to buy in Florida in 2015. RE taxes in FL are currently .6% of value, currently 1.6% on the IL house. FL RE tax has gone down by 9% in this time, the IL tax has gone up 48%. Florida has appreciated 118%, IL 24%.

Sales tax in FL: 7%, IL 8%.

No income tax of course in FL versus 4.95% in IL.

The kicker is the 16% death tax in IL where there is none in Florida.

As Mel said, indeed it is no wonder people are moving to Florida. Yes, insurance is higher (both auto and home), but doesn't begin to cover the tax hole.
Is it actually a "death tax"? Does everybody pay it since everybody dies, or just those with estates valued above a certain amount? Maybe it's an inheritance tax? If yes, does the spouse of the deceased have to pay 16% of what he or she inherits, or is the 16% only for others inheriting money?
Last edited by OpenMinded1 on Wed Dec 28, 2022 9:21 am, edited 3 times in total.
hachiko
Posts: 941
Joined: Fri Mar 17, 2017 1:56 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by hachiko »

Maverick3320 wrote: Tue Dec 27, 2022 3:03 am
billaster wrote: Thu Dec 15, 2022 11:06 pm
hachiko wrote: Thu Dec 15, 2022 9:22 pm 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.
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.
Sounds like Florida is doing a better job.
Doing a better job at what? The poster just said Florida's economy is much smaller. Why is that "better"? I'm also not saying it's doing a worse job, it just is what it is, I don't understand how one is better or worse.
Made money. Lost money. Learned to stop counting.
hachiko
Posts: 941
Joined: Fri Mar 17, 2017 1:56 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by hachiko »

sunny_socal wrote: Wed Dec 28, 2022 1:48 am
jebmke wrote: Thu Dec 15, 2022 1:22 pm
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.
True; although some just scrape by with poor infrastructure, schools etc.
And some, like CA, have high taxes and poor infrastructure & schools!
Yeah, the UC system is so bad compared to other public schools around the country. :confused
Made money. Lost money. Learned to stop counting.
MarkerFM
Posts: 843
Joined: Fri Nov 30, 2018 3:18 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by MarkerFM »

OpenMinded1 wrote: Wed Dec 28, 2022 9:17 am
MarkerFM wrote: Sat Dec 17, 2022 4:07 pm Here's our situation. Sold house in Illinois to buy in Florida in 2015. RE taxes in FL are currently .6% of value, currently 1.6% on the IL house. FL RE tax has gone down by 9% in this time, the IL tax has gone up 48%. Florida has appreciated 118%, IL 24%.

Sales tax in FL: 7%, IL 8%.

No income tax of course in FL versus 4.95% in IL.

The kicker is the 16% death tax in IL where there is none in Florida.

As Mel said, indeed it is no wonder people are moving to Florida. Yes, insurance is higher (both auto and home), but doesn't begin to cover the tax hole.
Is it actually a "death tax"? Does everybody pay it since everybody dies, or just those with estates valued above a certain amount? Maybe it's an inheritance tax? If yes, does the spouse of the deceased have to pay 16% of what he or she inherits, or is the 16% only for others inheriting money?
There is no inheritance tax in Illinois. The tax is levied on a couple's assets when the second one dies. Therefore, a death tax. Some escape it because they don't have assets more than a certain amount. Therefore, a death tax on the rich only.
Northern Flicker
Posts: 15288
Joined: Fri Apr 10, 2015 12:29 am

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by Northern Flicker »

State tax loads:

https://taxfoundation.org/tax-burden-by-state-2022/

Caveat: the rankings vary by income and other variables
guyfromct
Posts: 556
Joined: Sun Mar 13, 2022 12:43 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by guyfromct »

hachiko wrote: Wed Dec 28, 2022 9:20 am
sunny_socal wrote: Wed Dec 28, 2022 1:48 am
jebmke wrote: Thu Dec 15, 2022 1:22 pm
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.
True; although some just scrape by with poor infrastructure, schools etc.
And some, like CA, have high taxes and poor infrastructure & schools!
Yeah, the UC system is so bad compared to other public schools around the country. :confused
I think they meant primary/secondary education which varies tremendously by locale. The UC system is interesting, it has a mix of schools which vary from excellent to undistinguished.
WhiteMaxima
Posts: 3323
Joined: Thu May 19, 2016 5:04 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by WhiteMaxima »

it is bad. Roth conversion will have to pay state tax.
Northern Flicker
Posts: 15288
Joined: Fri Apr 10, 2015 12:29 am

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by Northern Flicker »

WhiteMaxima wrote: Wed Dec 28, 2022 1:32 pm it is bad. Roth conversion will have to pay state tax.
It creates additional bias to trad assets over Roth assets, but that is not inherently bad. During accumulation, it means that tax-deferred contributions get a larger tax deferral benefit. And if Roth conversions are done in the same state as where accumulated, you are just paying the tax once.

What is to be avoided is high trad accumulation in a state without income tax, then retiring in a state with high income tax. Also suboptimal would be Roth accumulation in a state with high income tax, then retiring in a state without income tax.
Last edited by Northern Flicker on Fri Dec 30, 2022 1:31 pm, edited 1 time in total.
User avatar
sunny_socal
Posts: 2732
Joined: Tue Mar 24, 2015 4:22 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by sunny_socal »

hachiko wrote: Wed Dec 28, 2022 9:20 am
sunny_socal wrote: Wed Dec 28, 2022 1:48 am
jebmke wrote: Thu Dec 15, 2022 1:22 pm
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.
True; although some just scrape by with poor infrastructure, schools etc.
And some, like CA, have high taxes and poor infrastructure & schools!
Yeah, the UC system is so bad compared to other public schools around the country. :confused
UC system is very expensive even for locals. A colleague was saving in anticipation of paying $50k/year for his kids.

It's the K-12 that are horrible. Easy to have good universities when they can charge private school prices.
muffins14
Posts: 5432
Joined: Wed Oct 26, 2016 4:14 am
Location: New York

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by muffins14 »

sunny_socal wrote: Fri Dec 30, 2022 7:34 am
hachiko wrote: Wed Dec 28, 2022 9:20 am
sunny_socal wrote: Wed Dec 28, 2022 1:48 am
jebmke wrote: Thu Dec 15, 2022 1:22 pm
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.
True; although some just scrape by with poor infrastructure, schools etc.
And some, like CA, have high taxes and poor infrastructure & schools!
Yeah, the UC system is so bad compared to other public schools around the country. :confused
UC system is very expensive even for locals. A colleague was saving in anticipation of paying $50k/year for his kids.

It's the K-12 that are horrible. Easy to have good universities when they can charge private school prices.
K-12 varies. Some are good.

Tuition at UC schools changes drastically with income. It’s is progressive, allowing lower-income people to attend university even if they are not wealthy. That helps create social mobility. Google search seems to show the price to be under 34k on average for the highest income, and under 8k for some

Between this and the “death tax” comment and a link from the tax foundation above, it’s clear that people get sucked into media narratives about tax/cost boogeymen vs careful consideration of individual real circumstances
Crom laughs at your Four Winds
hachiko
Posts: 941
Joined: Fri Mar 17, 2017 1:56 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by hachiko »

sunny_socal wrote: Fri Dec 30, 2022 7:34 am
hachiko wrote: Wed Dec 28, 2022 9:20 am
sunny_socal wrote: Wed Dec 28, 2022 1:48 am
jebmke wrote: Thu Dec 15, 2022 1:22 pm
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.
True; although some just scrape by with poor infrastructure, schools etc.
And some, like CA, have high taxes and poor infrastructure & schools!
Yeah, the UC system is so bad compared to other public schools around the country. :confused
UC system is very expensive even for locals. A colleague was saving in anticipation of paying $50k/year for his kids.

It's the K-12 that are horrible. Easy to have good universities when they can charge private school prices.
For out of state students - sure, it's the same price as a private school, but that's not the price for in state students. It's about $15k/year at UCLA: https://www.ucla.edu/admission/tuition-and-cost.

For K-12 I'm not super familiar with it, but there are definitely top quality public high schools in California. I guess it would depend on how we're comparing K-12 systems in various states.
Made money. Lost money. Learned to stop counting.
srt7
Posts: 1349
Joined: Mon Sep 29, 2014 12:19 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by srt7 »

Moved from Texas (No income tax, 8.25% sales tax, 2.75% property tax) to Colorado (4.55% income tax, 4.5% sales tax, 0.75% property tax). Did not notice much of a difference except higher quality of life and health. HHI is around $350K for context.

Like others mentioned states either make up for their lack of income tax revenue via other tax channels or offer a lower QOL with the low revenue they generate. I'd be more wary of states that go around advertising their "no income tax" as it seems like a sleight of hand or maybe that's the best feature their state offers?

Anyway, here's a link to the overall tax burden by state that might be helpful.
https://wallethub.com/edu/states-with-h ... rden/20494
Taking care of tomorrow while enjoying today.
srt7
Posts: 1349
Joined: Mon Sep 29, 2014 12:19 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by srt7 »

muffins14 wrote: Fri Dec 30, 2022 7:45 am
sunny_socal wrote: Fri Dec 30, 2022 7:34 am
hachiko wrote: Wed Dec 28, 2022 9:20 am
sunny_socal wrote: Wed Dec 28, 2022 1:48 am
jebmke wrote: Thu Dec 15, 2022 1:22 pm
True; although some just scrape by with poor infrastructure, schools etc.
And some, like CA, have high taxes and poor infrastructure & schools!
Yeah, the UC system is so bad compared to other public schools around the country. :confused
UC system is very expensive even for locals. A colleague was saving in anticipation of paying $50k/year for his kids.

It's the K-12 that are horrible. Easy to have good universities when they can charge private school prices.
K-12 varies. Some are good.

Tuition at UC schools changes drastically with income. It’s is progressive, allowing lower-income people to attend university even if they are not wealthy. That helps create social mobility. Google search seems to show the price to be under 34k on average for the highest income, and under 8k for some

Between this and the “death tax” comment and a link from the tax foundation above, it’s clear that people get sucked into media narratives about tax/cost boogeymen vs careful consideration of individual real circumstances
Very true. I lost count of how many people get sucked in to this media narrative. One should run numbers for their own personal situation.

PSA: Don't compare great schools ratings across states. A school rated 7 in CA might be just as good as one rated 10 in another state. TBH I don't think their ratings matter much after they revamped their methodology a few years ago. But it's an easy comparison so people continue with it.
Taking care of tomorrow while enjoying today.
smitcat
Posts: 13227
Joined: Mon Nov 07, 2016 9:51 am

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by smitcat »

There is always a difference in the taxes you pay and the benefits you get.
Here is a good article with fairly updated data that speaks to tax burdens and tax collections.
https://taxfoundation.org/publications/ ... -rankings/

After these difference in taxes due to exportation additional differences can be looked up due to:
- servicing of debt is different by state
- overall tax collection and spending vary depending upon personal demographic tax spending priorities in each state
JackoC
Posts: 4710
Joined: Sun Aug 12, 2018 11:14 am

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by JackoC »

srt7 wrote: Fri Dec 30, 2022 9:28 am
muffins14 wrote: Fri Dec 30, 2022 7:45 am
sunny_socal wrote: Fri Dec 30, 2022 7:34 am
hachiko wrote: Wed Dec 28, 2022 9:20 am
sunny_socal wrote: Wed Dec 28, 2022 1:48 am

And some, like CA, have high taxes and poor infrastructure & schools!
Yeah, the UC system is so bad compared to other public schools around the country. :confused
UC system is very expensive even for locals. A colleague was saving in anticipation of paying $50k/year for his kids.

It's the K-12 that are horrible. Easy to have good universities when they can charge private school prices.
K-12 varies. Some are good.

Tuition at UC schools changes drastically with income. It’s is progressive, allowing lower-income people to attend university even if they are not wealthy. That helps create social mobility. Google search seems to show the price to be under 34k on average for the highest income, and under 8k for some

Between this and the “death tax” comment and a link from the tax foundation above, it’s clear that people get sucked into media narratives about tax/cost boogeymen vs careful consideration of individual real circumstances
Very true. I lost count of how many people get sucked in to this media narrative. One should run numbers for their own personal situation.

PSA: Don't compare great schools ratings across states. A school rated 7 in CA might be just as good as one rated 10 in another state. TBH I don't think their ratings matter much after they revamped their methodology a few years ago. But it's an easy comparison so people continue with it.
[Unnecessary comment removed by admin LadyGeek]

The correlation of what you pay in taxes and what you get in benefits in any direct sense is very loose at best. In fact the basic design of a modern welfare state tax system is that some must pay more for what they get (in any practical and direct sense) so others can pay less. If everybody got what they paid for in a direct practical sense, there wouldn't be a reason to perform the relevant functions publicly, everybody could just go get what they pay for privately. If people can just move away from high costs/taxes (relatively easier among states, impractical generally for US federal taxes) there have to be reasons besides 'you get what you pay for' holding them. Like high paying jobs, family ties, nice climate (though here in NJ not so much), etc. Those ties tend to weaken in later life. That's among the reasons many well off retirees flee NJ, which is neither a myth nor the product of a delusion by a 'narrative'. And a state estate tax is an even bigger reason to clear out if you might be subject (NJ repealed its a few years ago, for now). But obviously everyone has to consider this according to their own circumstances. *Some* people 'get what they pay for' in high tax/spend states, or more. Most people even in the states with the lowest thresholds of state estate tax wouldn't be subject.
Northern Flicker
Posts: 15288
Joined: Fri Apr 10, 2015 12:29 am

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by Northern Flicker »

If one experiences job loss, it is much preferred to be in a state that taxes income than in a state that taxes outgo.
GreenLawn
Posts: 322
Joined: Tue Jul 21, 2020 10:58 am

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by GreenLawn »

Total cost of living trumps any particular tax for me. State income tax is just one cell in a Cost of Living spreadsheet. It is convenient not to have file the state income tax paperwork, but software renders that a minimal exercise once a year.

It all depends on one's priorities. I grew up on the west coast so I'm a pampered pooch when it comes to climate. Many if not most states I wouldn't live in if the state paid me.

State vary wildly in many metrics - culture, climate, quality of schools and roads, etc. There are some HCOL cities I wouldn't or couldn't live in, but for the most part cost is just one of several variables I take into account.

For the record I moved from a no income tax state to an income tax state and my overall cost of living happens to be less. But the climate and other factors were much more of a consideration than the difference in cost.
koryg75
Posts: 121
Joined: Sun Feb 01, 2015 7:48 am

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by koryg75 »

jebmke wrote: Thu Dec 15, 2022 1:22 pm
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.
True; although some just scrape by with poor infrastructure, schools etc.
Not necessarily true. Many states pass the burden on to tourists and/or businesses.
wfrobinette
Posts: 1879
Joined: Fri Feb 20, 2015 2:14 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by wfrobinette »

billaster wrote: Thu Dec 15, 2022 1:15 pm 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?
People do all sorts of irrational things when it comes to money!

My MIL drives 20+ minutes each way to save $3 on a tank of gas.
Northern Flicker
Posts: 15288
Joined: Fri Apr 10, 2015 12:29 am

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by Northern Flicker »

CA and TX both have excellent university systems. State income tax is not the predictor of that.
OrangeKiwi
Posts: 301
Joined: Tue Oct 01, 2019 8:10 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by OrangeKiwi »

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.
Certain governments have far more debt than other governments, so it is not clear to me that all jurisdictions average out to the same. I would not worry about optimizing between a standard deviation plus or minus, but there are some places that have debt burdens multiple standard deviations from the mean.

Warren Buffett mentions this in Feb 2019:

https://www.cnbc.com/2019/02/25/full-tr ... today.html
Buffett wrote: And-- you know, some of the-- it’s interesting to me when they talk about these relocation problems, you know, and New York and Amazon, all that sort of thing, you know-- I-- if I were relocating into some state that had a huge unfunded pension plan I’m walking into liabilities. ’Cause I mean, who knows whether they’re gonna get it from the corporate income tax or my employees-- you know, with personal income taxes or what. But that-- that liability isn’t gonna-- you can’t ship it offshore or anything like that. And those are big numbers, really big numbers. And they may come--you can delay a long time. I mean, they-- you’re getting pushed maybe somewhat. But the politicians are the ones that really haven’t attacked it in a good many states. And when you see what they would have to do-- I say to myself, “Why do I wanna build a plant there that has to sit there for 30 or 40 years?” ’Cause I’ll be here for the life of the pension-- plan-- and they will come after corporations, they’ll come after individuals. They-- just-- they’re gonna have to raise a lotta money.
Circe
Posts: 378
Joined: Thu Apr 21, 2022 7:16 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by Circe »

This 2022 article has good info on State's pension and other debt: https://www.pewtrusts.org/en/research-a ... -challenge

After New Jersey (20.2% of personal income), unfunded pension obligations were highest in Illinois (19.4%), Hawaii (18.0%), Alaska (16.3%), and New Mexico (15.7%).
South Dakota and Wisconsin were the only two states where pension plan savings exceeded the value of what they owed. Although South Dakota had a slight surplus, its unfunded liability as a share of personal income rounds to 0%.
Three states had unfunded liabilities equivalent to less than 1% of personal income: Tennessee (0.2%), New York (0.6%), and Washington (0.8%).
Forty-two states’ unfunded pension obligations grew relative to personal income from fiscal 2007 to fiscal 2019. Three states recorded double-digit increases: New Jersey (13.7 percentage points), Oregon (12.7 points), and Illinois (11.6 points).
Eight states managed to decrease their unfunded pension costs as a share of personal income since 2007: Oklahoma (-4.8 percentage points), West Virginia (-3.7 points), Rhode Island (-2.1 points), Maine (-1.5 points), Wisconsin (-1.2 points), Indiana and South Dakota (-0.6 points), and Tennessee (-0.5 points).
hachiko
Posts: 941
Joined: Fri Mar 17, 2017 1:56 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by hachiko »

OrangeKiwi wrote: Fri Dec 30, 2022 10:00 pm
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.
Certain governments have far more debt than other governments, so it is not clear to me that all jurisdictions average out to the same. I would not worry about optimizing between a standard deviation plus or minus, but there are some places that have debt burdens multiple standard deviations from the mean.

Warren Buffett mentions this in Feb 2019:

https://www.cnbc.com/2019/02/25/full-tr ... today.html
Buffett wrote: And-- you know, some of the-- it’s interesting to me when they talk about these relocation problems, you know, and New York and Amazon, all that sort of thing, you know-- I-- if I were relocating into some state that had a huge unfunded pension plan I’m walking into liabilities. ’Cause I mean, who knows whether they’re gonna get it from the corporate income tax or my employees-- you know, with personal income taxes or what. But that-- that liability isn’t gonna-- you can’t ship it offshore or anything like that. And those are big numbers, really big numbers. And they may come--you can delay a long time. I mean, they-- you’re getting pushed maybe somewhat. But the politicians are the ones that really haven’t attacked it in a good many states. And when you see what they would have to do-- I say to myself, “Why do I wanna build a plant there that has to sit there for 30 or 40 years?” ’Cause I’ll be here for the life of the pension-- plan-- and they will come after corporations, they’ll come after individuals. They-- just-- they’re gonna have to raise a lotta money.
Certainly true, and no doubt companies who are looking at shifting operations or opening new plants, etc. are (or should be) accounting for current taxes and projecting future taxes, of which the financial health of the various governments is a moderate to large factor.

However, that sort of analysis doesn't apply as much to individuals. It's much easier for individuals to move with a 3-5 year time frame if the tax structure changes and becomes unbearable. I'd also argue that when most individuals move they aren't looking to settle in that spot for 30 years.
Made money. Lost money. Learned to stop counting.
smooth_rough
Posts: 793
Joined: Sat Feb 12, 2022 1:14 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by smooth_rough »

Depends on your tax bracket, and the state you are moving to. If you are in top tax bracket and moving to CA, you will get killed on income tax.
smooth_rough
Posts: 793
Joined: Sat Feb 12, 2022 1:14 pm

Re: Was moving from a no income tax state to an income tax state really that bad?

Post by smooth_rough »

Nyc10036 wrote: Sat Dec 17, 2022 3:09 pm
Hebell wrote: Sat Dec 17, 2022 2:47 pm Property taxes don't matter to my husband and me any more, as we plan to rent. After doing the starter home, large downtown luxury home, and Florida condominium, we only want a VERY nice apartment, or independent or assisted living when the time comes. We can get by with 750 sq ft. Easily. (Caring for two failing parents with too much stuff, and all the grief that ensued, had us radically downsizing in 2015. What a having little stuff has been)

But even with wonderful lookup tables from Kiplingers and Kitces, I think this tax season I will buy several different state add-ons to TurboTax. So I can change my home address and perturb the TurboTax state returns so I can evaluate a wide variation of what-if scenarios. (And add sales tax on top of the result based on my anticipated discretionary income)

Thanks to the previous writers who pointed out all sorts of arcane state taxes that just don't show up in the magazine articles.
You may rent, but your landlord has to pay taxes.
He has to make a profit.
If his taxes go up, your rent is following.
Not always true. Landlord vacancy rate has more impact on rent increases than anything else.
Locked