Thursday, October 2, 2008

The best 'low tax' states to live in the USA

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Income taxes in the USA are levied at both a national and state level. I'm not sure about the state level, but I do know from Aaron Russo's movie 'Freedom to Fascism' that federal income taxes are not constitutional. Unless there is specific powers for the US constitution to allow U.S. states to levy an income tax then that also is unconstitutional.
If you want to avoid such burdens, you might ask where you should live. CNN provides a list of the 7 states of the USA which have the lowest state taxes. The risk of course is that economic activity has allowed these states to cut or defer tax imposts, so it remains to be seen which states will have low taxes in a few years. Economic activity is slowing, so government taxes are likely to increase. They include:
1. Wyoming: No corporate or personal income taxes. This state has just a population of 1 million, but it produces 38% of the nation's coal, so you might expect most of the state government's revenues to come from coal royalties. If that is the case then you can expect no new taxes I think because farmers and miners will be doing nicely in future years. This is the wild West. Very quiet.
2. Nevada: No corporate or personal income taxes, plus no inventory tax and low state payroll taxes. I particularly like the idea of buying in Nevada because Las Vegas is the gambling capital of the USA, and there are a lot of foreclosed properties there, so good to buy a house there. Actually I understand there are 38,000 houses in foreclosure there. Might just be the place to set up a business. With a slump in gambling you might expect higher taxes, but they do say gambling is recession-proof. I don't believe it, but they say it.
3. Florida: Well Florida is the retirement capital of the USA. A great place to buy because of the pleasant climate and those baby boomers will keep buying, so good investment. No personal income taxes here, so a great place to retire.
4. Texas: This state has no personal incomes taxes, and has a number of favourable cities to live based on CNN's lifestyle indicators.
5. Washington: Washington State would be one of my favourites. It has no income taxes at a state level.
6. New Hampshire: Another good choice, no personal income taxes.
7. Tennessee: This is the home to Nashville, the country music capital. No personal income taxes.
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Andrew Sheldon www.sheldonthinks.com
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