Kiplinger's Tax Map
Kiplinger's Personal Finance published this Tax Map that compares state tax in all 50 states and Washington DC.
Based on the featured story in the July issue of the magazine (not yet published onlne), the comparison is based on a hypothetical family of four with the following characteristics:
- Annual income of $90,000
- $8,000 401(k) contribution
- $10,000 investment income, including $5,000 long-term capital gains, $2,500 each in interest and dividends
- $2,000 contribution to state's 529 plan for their two children
- Family lives in and pay for property taxes on a median priced house in their city
- Buy 1,000 gallons of gas every year
- Spend $25,000 a year on food, clothing and miscellaneous items
It is amazing that state tax differs so dramatically. A family will pay $12,627 in Bridgeport, CT, almost five times more than the same family paying $2,106 in Casper, WY. Of course, as the study used the median house price in each locale, the property tax is affected, but it is more the property tax percentage, and whether the state charges state income tax, that drive most of the variance.
I am kind of lucky to live in the state of Washington, where there is no state income tax and the property tax is only a little bit more than one percent. If the sales tax deductibility will become a law later this year, I can see myself paying even less state taxes.
I guess a fair number of people understand that if you are blessed by a big tax refund check every year, it is actually not a good thing from a personal finance angle. Why? Because it means you voluntarily extended an interest-free loan to the ... Read
Another article on state-by-state tax differences; this time from Morningstar. Read
A good new for Washingtonians: Seattle Times reported that the House has passed a bill that will allow state of Washington residents to deduct their state sales tax in their federal tax returns for tax year 2004 and 2005. Read
This New York Post story regarding John Kerry is yet another example why we cannot trust politicians, especially in terms of tax reform. They can talk the talk but not walk the walk. Read
