We often hear about the highest taxed states such as New York, California and Illinois and I thought you might like to see the flip side of that coin. The list you are about to see takes income taxes, property taxes and sales taxes into account and they give you a better understanding about just how much living in a high tax state really costs you.
A prime example was baseball super star Bryce Harper. He was offered more money by LA and SF but signed with Philadelphia and in state taxes alone, he will save 33 million dollars over the life of his contract.
Yes, you’re going to have to leave the contiguous states and head north if you want to escape oppressive taxes. Alaska has no income tax and no general sales tax. According to 24/7 Wall Street, the state and local tax burden is about 6.5 percent of Alaskans’ income, the lowest number on the list. You just have to put up with some very long winters.
2. South Dakota
Another chilly Northern state is in close competition for the lowest taxes in America. Residents of South Dakota pay only 7.1 percent of their income in state and local taxes, thanks to no income tax. Unlike Alaska, however, this state does have a general sales tax, and a pretty high one at that.
Ah, the wide-open skies of Wyoming. The least-populated state in the union is also fairly lenient with its tax structure. Again, there is no state income tax, and although there is a sales tax it’s fairly low. People living there pay about 7.1 percent of their income in state and local taxes, tied with South Dakota.
This scenic Southern state may have an income tax, but it’s barely noticeable: In fact, people pay only $49 per capita in state income tax, and that’s no typo. Overall, the tax burden is 7.3 percent of income, making Tennessee a pretty appealing place to live.
Another Southern state with fairly low taxes, Louisiana does have both sales and income taxes, but they’re kept pretty low. On average, 7.6 percent of income goes to state and local taxes, earning this locale good marks on the list.
The Lone Star State has long been associated with liberty and freedom, and it lives up to that reputation during tax season. This red state has no income tax, making it very attractive for businesses and families alike. Although it does have a pretty high sales tax, residents pay only 7.6 percent of their income in state and local taxes.
7. New Hampshire
Moving away from the South and to the northeast corner of America, the Granite State is a bit of a low-tax gem in a usually liberal area of the nation. There’s no sales tax, and the per-capita annual income tax amount is only $66. Overall, the state and local tax burden is 7.9 percent of income.
This state perhaps most famous for entertainment and gambling has been seen as a tax haven for decades, and with good reason. Like many other places on this list, there’s no income tax in Nevada, although its sales tax is a bit steep. People pay around 8.1 percent of their income in state and local taxes.
9. South Carolina
We’re back to the South for the last two entries on the low-tax list. Residents of South Carolina pay 8.4 percent of their income in state and local taxes, and although there are both income and sales taxes, they are relatively low.
You know how to spell it, but you might not have known that this often humid state is pretty competitive when it comes to tax rates. Although residents don’t tend to earn as much as in other nearby states, they pay about 8.4 percent of those earnings in state and local taxes, keeping Mississippi on the low end nationally.
Here’s an interesting fact: Of those 10 lowest-taxed states in America, eight of them have Republican governors. It turns out that conservative principles aren’t just good in theory — they tend to work out pretty well in practice.