A new analysis from the personal finance technology company MoneyGeek, found that all but one of the 10 most tax-friendly states experienced gains in population from 2019 to 2020. Alaska was the only top 10 most tax-friendly state that did not see a gain in population. Not surprisingly, Florida came in with an “A” grade as one of the top 5 most tax-friendly states. Conversely, seven of the 10 least tax-friendly states saw a decrease in population over the same time period of time.
How did the top states grade out?
MoneyGeek used a hypothetical profile of a married couple filing a joint tax return with an average gross income of $82,852 per year, a house valued at $346,000 and one dependent. Based on this profile, letter grades were assigned to each state based on state and local tax burdens. As for the states that came in with a letter grade of “A”, Wyoming, Nevada, Alaska, Florida, and Tennessee all received top marks. Overall, Wyoming ranked first with an estimated overall tax burden of $3,279 paid for state and local income, as well as sales and property taxes. This equated to 4% of their total income overall.
The remaining 5 states in the top 10 list received a grade of “B”. These states were: Washington, North Dakota, Arizona, South Dakota, and Delaware.
As for population changes, Alaska saw a decrease of 0.3% from 2019 to 2020. Meanwhile, Arizona recorded the largest gain in population at 1.8%.
As for the 10 least tax-friendly states, they were: Michigan, Nebraska, Vermont, Wisconsin, Iowa, New York, New Hampshire, New Jersey, Connecticut, and Illinois. Of these states, New York and Illinios saw the largest population declines at 0.6% each.
Although many of these results are not surprising, it does reinforce some of the factors contributing to the red-hot real estate market in South Florida. With many Americans suffering from tax fatigue and the likelihood of the situation only getting worse, we are seeing a migration to more tax-friendly states. Currently, there are seven states that do not have a state income tax. They are: Florida, Texas, Alaska, Wyoming, South Dakota, Nevada, & Washington.
Are you considering a move to South Florida? We can help. Contact Live South Florida Realty, Inc. today & let us guide your change in coordinates.