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1980 Comments on Inter-Area Tax Comparisons [1] (1980)

handle is hein.tera/cintertac0004 and id is 1 raw text is: Tax Foundation, Inc. 1875 Connecticut Avenue, N.W. Washington, D.C. 20009 COMMENTS ON INTER-AREA TAX COMPARISONS The Tax Foundation receives numerous inquiries concerning relative tax costs in different localities. Many of these come from individuals seeking low-cost locations for retirement. Limitations of staff and facilities preclude answering these inquiries in detail. We can, however, provide a few broad guidelines. Costs of Living It should be recognized that taxes represent only a portion--sometimes relatively small--of a retired couple's livin~g expense. The U.S. Bureau of Labor Statistics periodically publishes estimates of living costs for retired couples in selected large cities and nonmetropolitan areas by region. For example, annual budgets (autumn 1978) for a retired couple in nonmetropolitan areas by region are shown in Table 1. Inter-state Tax Comparisons Per capita state and local taxes and per capita property taxes for 1978 by state are shown in Tables 2 and 3, respectively, listed according to the state's ranking. Several limitations, however, must be considered in interpreting these data: 1. The figures, if available, for individual localities within a state would be quite variable, especially property taxes. Specific information on property taxes is generally available from a city's chamber of commerce or local tax assessor. 2. The nhture of a family's income or wealth (e.g., securities. real property) may have an important bearing on tax costs. Some of the states levy a property tax on intangible assets--stocks, bonds, and bank deposits. All but nine states impose some form of individual income tax, but the rates vary widely from one state to another, and some allow special concessions for persons aged 65 and over, generally in the form of higher exemptions. General sales taxes are levied at varying rates by all states except Alaska, Delaware, Montana, New Hampshire, and Oregon. In the case of property taxes, the states provide varying types of property tax relief to elderly homeowners (with some extending to renters) below certain income levels. 1. States without a broad-based income tax are: Connecticut, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. In Connecticut, New Hampshire, and Tennessee, however, certain income from investments (e.g., dividends, interest, capital gains) is taxed.