by P.J. DiNuzzo April 19, 2016
Tax Cost of Living
Welcome to tax day. We all pay federal taxes under the same rules, but the state regimes are wildly different, 
and there are a lot of moving parts that make up the cost to live in a state. Which of them take the most money out of the pockets of their residents, and where is living cheapest, from a tax standpoint?
The Wallet Hub website recently looked at three tax variables-property taxes; individual income taxes; and total sales and gross receipts taxes-all as a fraction of total state personal income, added them up and determined the highest and lowest-tax states.
The results? Most readers won't be surprised that New York came in first overall, with property taxes equal to 4.65% of total personal income for all residents, plus individual income taxes of 4.76% (by far the highest overall percentage of any state) and a 3.71% sales and receipts tax burden. Add them up, and New Yorkers are paying, in aggregate, 13.12% of their total personal income for the privilege of living in the state.
Hawaii (11.86%), Maine (11.13%), Vermont (11.13%), Connecticut (10.91%), Minnesota (10.46%), New Jersey (10.38%), Rhode Island (10.36%), Wisconsin (10.32%) and Illinois (10.19%) all drained more than 10% of total income into their state coffers.
The cheapest states? Alaska (5.18%) and Delaware (5.91%) were the only two that came in under 6%, followed by Tennessee (6.56%), New Hampshire(6.88%), South Dakota (6.94% and Oklahoma (6.95%). (You can see how your state compares in each category, and in the overall rankings, here: https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494/
Sincerely,
P.J. DiNuzzo, CPA, PFS®, AEP®, AIF®, MSTx, MBA
President, Founder, and Chief Investment Officer