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For upper middle income earners, high net-worth individuals, retirees, and certainly the "one percent" - where you live can make a huge difference in how much of your money you get to keep at the end of the year and how much you need to fork over to your state.
To help individuals and businesses make an informed choice, the Tax Foundation collects data on more than 100 tax provisions for each state and then ranks them to create its annual State Business Tax Climate Index. The 10 worst states on the list all levy complex, non-neutral taxes that favor some economic activities over others and have comparatively high individual and corporate tax rates.
The data are mixed as to whether a tough tax climate actually does push people and businesses to live in low-tax states. A report released last year by the Institute on Taxation and Economic Policy found that residents of states with high income tax were actually experiencing economic conditions that were as good as or better than those living in states without a personal income tax.
Plus, sometimes people are inclined to pay higher taxes to live in a certain location. New York, California and Maryland, for example, are all among the states that ranked worst for taxes, but they're also hives of business activity, high salaries and employment. Meanwhile, families with children have historically been willing to pay higher property taxes in exchange for higher quality schools and other services.
Slide Show: 10 Worst States for Taxes in 2014
The 10 Best States for Taxes in 2014
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Wyoming residents, for example, pay a sales tax of just 4 percent, and pay no income tax. Marylanders pay a 6 percent sales tax in addition to income taxes ranging from 2 percent to 5.75 percent, depending on income. The Tax Foundation collects data on more than 100 tax provisions for each state and then ranks them to create its annual State Business Tax Climate Index.
Several states have moved within the rankings for the 2014 list, with Texas dropping out of the top ten for the first time, landing at #11, and Virginia and Kentucky both falling three places to #26 and #27, respectively. Meanwhile, Arizona climbed five ranks to #22, while Kansas rocketed six spots to #20.
Still, the rankings don't tell the entire story since the impact of state tax policies depends on a person's income and consumption patterns. Washington State, for example, has one of the lowest overall tax burdens in the country, but its poorest citizens pay more than the residents of any other state, according to a recent report by the left-leaning Institute on Taxation and Economic Policy.
That study found that tax policies in every state impose higher effective tax rates on poor families than on their richest residents.
Slide Show: The 10 Best States for Taxes in 2014
This article is from the FISCAL TIMES.
So in reading the top 10 / bottom 10 rankings, you see how much they are concerned about preserving wealth and pro corporate taxes as if these things make life harder for the working class. They also talk about how a flat tax is good, well not really... corporations and the rich have better accountants to get write offs!
The only thing that needs to be done to fix the inequality (as highlighted on sott), is to reduce the regressive property tax on ONE house where the person/family resides (AKA RENT ON A HOUSE YOU OWN that is based on value not actual income or profit) and raise the income and corporate taxes for the higher brackets.
Would that happen? I doubt it... states love property taxes, it guarantees them income based on the unrealistic price of properties/houses.