re: States without income tax - how much of an effect does it have on standard of living?

quote:

---

Is it really helpful for people to get more money in their pocket

---

How can this not be helpful?

quote:

---

How can this not be helpful?

---

Because as others have mentioned, property taxes, sales tax, and other hidden taxes could potentially be worse.

Though it seems like in most states without state income tax, it's better.

quote:

---

Because as others have mentioned, property taxes, sales tax, and other hidden taxes could potentially be worse.

---

Yeah but you can control these (somewhat) by where you live and what you buy

quote:

---

Though it seems like in most states without state income tax, it's better.

---

Bc it is

This article from Bankrate makes an argument that states without income tax place a heavier burden on the poor while giving a break to the wealthy.

quote:

---

The main benefit, proponents say, is that states with no income tax become a beacon for growth. They’re better at creating jobs and keeping a core of young, educated workers from moving to other states. Others, however, are not so sure.

“It’s a way to disguise taxes to people,” says Curtis Skinner, a labor economist at Columbia University. States still need to balance their budgets, and critics like Skinner say the substitute for income taxes tends to be a system that puts an unfair amount of pressure on the poor.

---

quote:

---

Gov. Bobby Jindal wants Louisiana to be the next state to get rid of the income tax.

“We need to do more to stay competitive,” Jindal told state lawmakers in 2013. “States with no income taxes are outperforming other states in terms of economic growth and population growth.”

---

quote:

---

But does this really happen? A variety of economic policy groups have pushed back over the past few years, raising questions about whether any of those claims are true.

The Institute on Taxation and Economic Policy points out, for example, that states with no income tax haven’t really created more jobs than others. Texas, which is at the center of America’s oil industry, has certainly outperformed the national average in job creation as energy prices surged over the past decade. But job growth trailed population growth in the other eight no-income-tax states, according to a 2013 ITEP report.

Meanwhile, the Center on Budget and Policy Priorities, or CBPP, noted that a state’s income taxes have little influence over whether people ultimately decide to live there.

---

quote:

---

An income tax is a classic tool for redistributing wealth. It’s usually “progressive” in nature, meaning that it taxes higher earners at a greater rate than lower earners. Other taxes typically don’t have that Robin Hood-like characteristic.

---

quote:

---

If you’re someone who thinks the government should take an active role in shaping society, then you’ll probably agree that a state income tax is a good thing. It allows the state to redistribute wealth from rich to poor, and policymakers can use state tax incentives to encourage people to give to charities, buy solar panels or promote other initiatives.

If you think the government should stay out of the society-shaping business, then you might very well be comfortable living in one of America’s nine no-income-tax states.

---

quote:

---

It's less painful to deal with the taxes when you see a direct benefit, as opposed to just contributing to a general fund that is squandered yearly.

---

This is something that is really attractive to me as my #1 question in moving anywhere is "What are the schools like?"

We're not ones to seek luxury and we're really frugal. However, settling for lower incomes can often mean you sacrifice the educational opportunities for your children. It'd be nice to get a little more money in my pocket to seek areas that invest in their community's public education.

quote:

---

Rent is lower in Dallas

---

Do you live in the ghetto?

ETA: I take that back. It seems to be right on par with other big cities and way cheaper than cities like Austin and Denver.

Look at the overall tax burden more than just income tax. For example the State-Local tax burden of Louisiana is 7.6% equal to that of Texas, and lower than the 8.9% of Florida.

LINK

To be honest, you can simplify it much more. You make 150k, I think that's a 6% state tax bracket in LA. So ~9,000 in taxes before dealing with any deductions (which could be significant). Where I live, that's around a 300-320k house's property tax. Probably pretty spot on for where someone making that money is going to live. So it breaks nearly dead even.

quote:

---

Look at the overall tax burden more than just income tax. For example the State-Local tax burden of Louisiana is 7.6% equal to that of Texas, and lower than the 8.9% of Florida.

---

That still doesn't paint the picture of the standard of living.

What are you getting with those tax dollars?

That's what separates TX from LA.

It depends.

What you want to look at is total tax burden. The lower you are on that list, the better. Texas is 34 of 50, Florida is 45 of 50.

LINK

Some states like Texas have a good reputation for having no state income tax, but property taxes are sky high. In many places, property tax can almost amount to a second mortgage payment. It is probably the best state in the country to be a high earning business owner, but taking a W2 job or 1099 not so much.

Florida is better, but less culturally southern in parts...but then again so is Texas (south of a line from El Paso to Austin to Houston) and if you are going to live in an area with a large number of Hispanics I find the cubans and south americans of Florida preferable to the Mexicsns and central americans in Texas.

Tennessee is pretty awesome.