Depends on the state, some have higher property taxes.
Higher sales tax tends to be regressive because it doesn’t tax money you don’t spend, nor does it tax things where sales tax doesn’t apply like buying assets.
> Are the sales taxes generally higher in those states, which offset the lack of income tax?
Sales and property taxes are often higher, but this (which shifts the tax burden down the income distribution compared to progressive income taxes) usually does not fully offset the lack of income tax; the no income tax states are generally low average tax burden states (but may still have higher tax burden at low-to-moderate income.)
My state is 9%, and it kicks in at under $20K. No state has a high enough sales tax to offset that income tax.
Concrete numbers: Say you and spouse collectively make $300K. That's a bit under $30K in state income tax. On top of that you'd pay property taxes (admittedly low).
Sorry Texas, but your property + sales tax isn't that high.
everforward|4 months ago
Higher sales tax tends to be regressive because it doesn’t tax money you don’t spend, nor does it tax things where sales tax doesn’t apply like buying assets.
dragonwriter|4 months ago
Sales and property taxes are often higher, but this (which shifts the tax burden down the income distribution compared to progressive income taxes) usually does not fully offset the lack of income tax; the no income tax states are generally low average tax burden states (but may still have higher tax burden at low-to-moderate income.)
BeetleB|4 months ago
My state is 9%, and it kicks in at under $20K. No state has a high enough sales tax to offset that income tax.
Concrete numbers: Say you and spouse collectively make $300K. That's a bit under $30K in state income tax. On top of that you'd pay property taxes (admittedly low).
Sorry Texas, but your property + sales tax isn't that high.
ojbyrne|4 months ago
knute|4 months ago