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Sales tax by state
Friday, October 16, 2009
This Tax Foundation report provides the helpful graphic below showing sales tax by state in the U.S., something that should be important to anyone who is thinking about relocating and who wishes to hang on to as much of their money as possible in the years ahead.
Speaking from first hand experience, once you move to a no-tax state, it's hard to think about moving to one with sales tax and there doesn't seem to be much middle ground - it's either zero or six to nine percent. For obvious reasons, we really liked both New Hampshire and Montana on our recent cross country trip that started here in Oregon.
ooo
16 comments:
Now you're just rubbing it in. I'm in a high sales tax state. Wish I could live in NH or OR to buy goods without another tax.
Tax on income=check
Tax on consumption=check
Tax on death=check
Taxes never end.
Well, state services have to be paid for one way or the other.
It would probably be more fair to take both sales tax and state income tax into consideration. If you do that, it becomes clear that while Washington has a high sales tax, they have no income tax. California has both a high sales tax and an income tax. Some states like Michigan have low sales tax and an income tax. Nevada and Texas, by contrast, have a moderate sales tax and no state income tax.
But don't forget property tax. A friend that moved from CA to TX said his TX property tax was the same amount that his mortgage was in CA.
Get the best of both worlds.
Live in Washington(no income tax)
Cross the border into Oregon to buy big items(flat screen tv's,cars, christmas presents) No sales tax.
A LOT of people in southern Washinton do exactly that.
Yes, sales tax should be combined with both state income tax and property tax to get a complete picture. If I were still working a regular job, I'd be much more concerned about income tax but, as it is, sales tax is number one, followed closely by property taxes which are sometimes difficult to compare from state to state.
As I understand it, there are some kind of provisions for Washington state to recoup some of their lost taxes for those who cross the river into Portland, but I can't recall what it is and whether or not it is enforced.
If anyone has info on comparing property taxes from state, please provide a link or send mail. I've been curious about this for some time but each time I look into it I come across pages and pages of details about how each state calculates property taxes and I soon give up.
I'd also be interested to know if anyone has any comparisons for the three taxes combined. California has got to be at or near the top, though New York and New Jersey may be even worse.
CA -
One of the largest economies in the world.
Possibly the highest taxed state in the Union
Broke
"Well, state services have to be paid for one way or the other."
I always hate this argument when debating tax policy. There are tons of programs that I pay for that could be cut before raising taxes to balance a state or local budget.
Add up all the taxes at the federal, state, and local level and it gets pretty ridiculous. At some point it doesn't make sense to work. Europe is already there.
At least in the rest of the world you get something for your taxes. Here it just all goes to Golman, Exxon, etc.
Why is sales tax so important? Food is not taxed in CA which should be your biggest spending. You already own too much crap as it is. What is the point of buying more? I keep telling everyone to downsize their unused dust collecting treasures.
Buy a new car and you'll find out very quickly how important sales tax is. I waited about a year until we moved to Oregon to buy one and saved thousands of dollars.
OK, but now that you have your car you should be set until you need to buy an electric car. You now may want to focus on the cost of rent, heating/ac, health care, gas, food and entertainment over taxes. If you move to Montana and save on taxes and rent but need to pay $1000/mo to heat the place 9 month of the year your no better off. Also keep your fingers crossed for public health care or you are likely just saving money that will eventually just go to medical co-pays or long term care.
E in NZ
As mentioned earlier, income tax can be far more important in the overall tax picture, and depending on your lifestyle, property taxes can be a bigger number as well.
It would be very interesting to take a median family income and size, then show a similar graphic that shows what total percentage of income is paid in taxes of various forms.
They layer in so many taxes it's hard to know for sure what you're paying.
Income Tax (federal, state, local)
property taxes,ad valorem taxes on vehicles, boats, etc; gasoline taxes, energy taxes, communication taxes/fees, utility taxes, sales taxes,
Then you have taxes imbedded into the cost of goods and services. I would LOVE to see a map showing that number.
I agree income tax is MUCH more important than sales tax. Most of what you need isn't taxed via sales taxes anyway. Rent/housing has no sales tax, food has no sales tax, services have no sales tax, utilities have no sales tax (although they do have other taxes). And that is 90% of your basic needs. Yes there is clothing and furniture, but how much of your income are you really paying on that? And there is transportation but you can always buy a used car and pay less sales tax on it. So if you live frugally sales tax just isn't that big a deal. Income tax on the other hand .... takes all your money before you even see it.
One reason every other tax in CA is so ridiculously high is because of Prop 13. And with increased college tuitions at the public universities and so on, it is fast reaching the point where we pay European taxes without receiving European services. The worst of all worlds.
Income taxes are also dependent on how you make money. The highest taxed person in America is the wadge earner. If you make your money through private business, rentals, stocks, bonds, etc the rates are lower, and there are many legal ways to hide your income. So it really only the working folks that are getting jacked in America, too bad they don't vote for their best interests.
For example a millionaire in CA that lives on a tax free inherited Williamson act property, drives using red diesel, gets crop subsidies or pay not to farm income (http://farm.ewg.org/farm/dp_analysis.php). This guy is doing great under our system. His brother on Wall St is doing just fine as well.
So should we kill the current system and go for a flat tax?
Flat tax, come on. You can't even get a no brain-er like universal health care. The easiest thing to do is just move to Canada. This system is just going to burn itself to the ground.
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