I have been watching my parents complaining about the taxes all the time. Don’t your parents too? Probably we will understand when we become taxpayers. Keeping income tax rates lower increases the spending power of buyers and can increase aggregate demand, reaching greater economic growth.
Keeping all the tension aside, let’s discuss about 9 US states without income tax that are heaven for business!
1. Alaska
Alaska does not have a statewide commission or sales tax. The entire state and district tax burden on Alaska, including income, property, sales, and excise taxes, is only 5.10% of personal income, the lowest of all 50 states. For comparison, New York’s tax burden is 12.97% of revenue, according to WalletHub. All Alaskans receive an annual payment from the Alaska Perpetual Fund Foundation consisting of income and investment income from mineral rentals and returns. The dividend per citizen for 2019 is $3000.
The price of living in Alaska is high, primarily due to the remote location of the state. The state lines 45 out of 50 in affordability and 44 out of 50 on US News & World Report’s list of “Best Countries to Live in.”
2. Florida
This famous snowbird state is characterized by warm temperatures and a large elderly population. Florida’s sales and property taxes are above the national average. Still, the total tax burden is only 6.56%, the third-lowest in the country. Florida ranks 35th in terms of affordability, ten places higher than Alaska. However, it still isn’t as affordable as most states due to above-average living and housing costs. On the other hand, Florida is ranked 13th on the US News & World Report’s list of “Best Countries to Live in.”
3. Nevada
Nevada relies heavily on high sales tax revenues on groceries to clothing, sin taxes on alcohol and gambling. This results in a total state-imposed tax burden of 8.26% of Nevada’s income, the worst of all states with no income tax but still very respectable of all 50 states. However, the rising cost of living and housing puts Nevada just eight off the bottom (42) regarding affordability. The country ranks 37th on US News & World Report’s list of “Best Countries to Live In.”
Check out these largest mutual funds in the US.
4. South Dakota
Like many non-taxable states, South Dakota relies on tax revenue on cigarettes and alcohol. The Mount Rushmore home has higher-than-average property taxes but lower sales tax rates than many other states; In addition, it has a tax-free climate for retirees. The combination of high property taxes and South Dakota’s unique location as home to several major companies in the credit card industry all help keep the state’s residents’ income tax safe.
According to WalletHub, South Dakotans pay only 7.28% of their income in taxes, putting the state in eighth place in terms of the overall tax burden. The country ranks 14th in affordability and 20th on the list of “Best Countries to Live in the United States.
5. Texas
The Lone Star State will hate personal income taxes so much, it has decided to ban them in the state constitution. Just as infrastructure and services have to pay one way or another, Texas depends on sales and foot the bill. In some states, sales taxes can be as significant as 8.25%. Property taxes are also more expensive than in most states. The net result is a total tax burden of 8.18% of personal income. However, Texas’ real tax rate remains one of the lowest in the United States, with the state ranking 18th.
One advantage of living without tax is that the Job Cuts and Jobs Act (TCJA) — which imposed a $10,000 cap on state and local tax deductions (SALT) — likely won’t have as much of an impression as it does for residents of high-income areas. Tax states, such as California and New York.
6. Washington
Washington hosts a youth group and several major employers, thanks to the lack of a state-mandated corporate income tax. Residents pay high sales taxes and taxes, and gasoline is more expensive in Washington than in most other states. The state comes in at 19 out of 50, with an overall tax burden of 8.20%. An unusually higher-than-average cost of maintenance and housing hurts Washington, putting the bottom six-state at 44th within reach. Some residents might not value it, as the US and World Report ranked their report as the most suitable state to live in in 2019.
Get to know about the largest hedge funds in the US.
7. Wyoming
With an expected six people per square mile, Wyoming is the second least densely populated state, surpassed only by Alaska, which has roughly one person per square mile. Citizens pay neither personal or corporate income taxes nor retirement income taxes. They enjoy the low property and sales tax. The total tax burden—including income, income, sales, and indirect taxes as a percentage of personal income—is 7.51%, putting the country in tenth place.
Like Alaska, Wyoming taxes natural resources, particularly coal and oil, to make up for the lack of a personal income tax. The country ranks a respectable 28th in affordability and 31st in the “Best Countries to Live In” list.
8. Tennessee
Before 2016, Tennessee mainly levied income tax on investments, including interest and dividends, but did not pay wages. The law, passed in 2010, including a plan to reduce tax on unearned income by 1% until tax is removed by 2021. At 29 1.29 a gallon, the petrol tax is even higher.
As soon as the new law is fully implemented, Tennessee will attract prospective retirees who rely heavily on investment income. The overall tax burden of the state is 6.27%, which is the third-lowest in the country. Tennessee ranks 22nd in the rankings and 30th in the list of “Best Countries” in the US News & World Report in the Affordability category.
9. New Hampshire
New Hampshire does not tax income earned, but it charges dividends and interest. The New Hampshire Senate recently passed legislation to determine investment income tax for more than five years, with full implementation by 2025. The state does not impose a sales tax. Still, it sets a tax, including a tax on alcohol, and the average property tax rate is 2.20%. It is the third-highest in the country.
Nevertheless, New Hampshire’s local and state tax burden is only 6.86%, according to WalletHub, which ranks fifth in the state. It did not come without spending: for example, inadequate state contributions to higher education resulted in a few expensive two- and fourth-year colleges in the United States. However, the state ranks second in the list of US world news and reports. “The best countries to live in.”
Saving for retirement is essential, but saving money in retirement is necessary, too. One potential way to save money is to relocate to one of the states without income tax so that you don’t have to worry about saving more money in the future.