What does it Cost to Live in your State?

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


Recent Posts

See All

Most (and Least) Expensive States

If you could live in any U.S. state, which one would let you keep more of your money than others? The answer turns out to be surprisingly complicated. Most people would look first at state income tax

Highlights of the New Relief Package

The U.S. Congress recently passed, and the President signed, the 5,593 page Consolidated Appropriations Act of 2021—and experts are still mulling over what the impact will be on ordinary citizens. Th

2020 Year-End Investment Market Report

It would be hard to imagine a stranger year in the U.S. investment markets than the one just passed, or a year that did a better job of defying logic. After the dramatic market collapse that began on

Subscribe to get upcoming resources, news and webinars!

Investment advisory services offered through Arete Wealth Strategists, a Minnesota Registered Investment Advisor. Telephone number 888.544.3250. Arete Wealth Australia may offer investment advisory services in the State of Minnesota and in other jurisdictions where registered or exempted. Please click here for more important disclosure