Are you thinking of moving soon? Here are the best cities for taxes
The past few weeks have been a maelstrom of costs for families as both New York and the federal government consider new tax hikes. Faced with massive budget deficits, the Empire State passed its raft of tax increases targeting the wealthy. Some Manhattan residents could see their marginal tax rates skyrocket to more than 50 percent. The White House also seeks hefty tax hikes on high earners and business owners.
The sharp increases underscore a trend of residents bolting from high tax environs, like New York, California, and Illinois for more competitive ones. The hikes come during a time of economic tumult and an exodus caused by the pandemic. Within specific low tax places are cities with combined diminished rates and affordable standards of living.
To determine the cities with the lowest tax rates, income and corporate tax rates must be considered, along with sales, property, and vehicle tax rates. Adding them together reveals how much a married couple earning $100,000, with a home worth the local median value, would likely pay in a normal calendar year. They purchase a $10,000 car and spend half of their income on items with a sales tax. They also make $50,000 from corporate income from the small business they own and run.
The numbers below do not account for specific deductions that families may use, but they are rounded out tax costs based on clear cut data. The desirability of cities, determined by migration inflows and job prospects, is also taken into account with tax rates. There may be lower tax rates in a tiny town but not as much demand for new residents.
The capital of the Lone Star State has among the best standards of living in Texas and is one of the fastest growing cities in the nation. Residents in the diverse proper benefit from no income or corporate tax burdens. The sales tax for the married couple above would be $4,125, their property tax would be $4,970, and their car tax would be $625.
Knoxville is a midsize city in the south with massive recent growing pains. The rate of incoming residents is so great that there is a housing shortage there. The income tax for the married couple would be $0, their corporate tax would be $3,250, their sales tax would be $4,625, their property tax would be $1,160, and their car tax would be $780.
The greater Phoenix area has been a top growing region of the nation in the last decade. Located just outside of this proper, Scottsdale attracts residents with tax rates much lower than many nearby cities in California. The income tax for the married couple would be $2,110, their corporate tax would be $2,450, their sales tax would be $4,025, their property tax would be $1,440, and their car tax would be $805.
The success of the Sunshine State in navigating the coronavirus has been incredibly strong. Tallahassee is not the largest city in Florida, but it has an advantage as the capital. It also has a labor shortage thanks to its growth. The income tax for the married couple above would be $0, their corporate tax would be $2,290, their sales tax would be $3,750, their property tax would be $1,850, and their car tax would be $675.
Idaho is a winner among states Americans flock to. Nampa comes with lower tax rates than Boise but high employment and residential growth. The income tax for the married couple would be $2,110, their corporate tax would be $3,460, their sales tax would be $3,000, their property tax would be $1,30, and their car tax would be $600.
Albany, New York
Most of the fastest population growth in the nation is in red states. But many families are also moving within blue states from the largest cities to smaller metros with lower tax rates. Albany is similar in size as Midland and does not come with the extreme high cost of living in New York. The income tax for the married couple would be $4,590, their corporate tax would be $3,250, their sales tax would be $4,000, their property tax would be $4,465, and their car tax would be $800.
The massive wave of residents leaving high tax jurisdictions for low tax ones is not going to end anytime soon. Between sharply increased tax levies and the pandemic, this has been a time for introspection. Many families with heavy costs of living could come to the difficult but logical conclusion that there is no choice but to hire a moving truck. The stark variation in tax costs are not lost on ordinary families.
This moment is one that blue states will likely miss, as liberal lawmakers in these jurisdictions continue to blame weather, the tax deduction, or the coronavirus for their recent population losses. The lesson also spotlights the disconnect between average families and their social betters, with the former paying the price for political spending or, in thousands of cases, refusing to by moving elsewhere to save their money.
Kristin Tate is a libertarian author and an analyst for Young Americans for Liberty. She is a Robert Novak journalism fellow at the Fund for American Studies. Her newest book is “The Liberal Invasion of Red State America.”