This ARTICLE On Retirees Fleeing High Taxed States To Low Cost Of Living States Was PUBLISHED On October 21st, 2019
The economy is hot. Housing prices have been appreciating throughout the United States except in certain states.
- Many Retirees Fleeing High Taxed States To Low Cost Of Living States
- Illinois remains to be the highest taxed state in the country
- Illinois has the second-highest property tax rate in the nation, right behind New Jersey
- States that are in a financial crisis keep on raising taxes to solve their budget deficit
- However, businesses and taxpayers are fighting back
- Instead of swallowing the high taxes and higher cost of living in high taxed states, they had enough and are leaving
- Politicians who are raising taxes to solve their state’s budget deficit are getting back-fired due to taxpayers fleeing the state to other states with lower taxes and cost of living
- Florida is raking in billions in revenues due to no state income taxes and low taxes on just about everything
- Tennessee, another state with no state income taxes is seeing their population explode
In this article, we will cover and discuss Retirees Fleeing High Taxed States To Low Cost Of Living States.
Reasons Why Retirees Fleeing High Taxed States
The number one reason why Retirees Fleeing High Taxed States is due to high property taxes and high cost of living. For example, more taxpayers left New York in 2018 than any other state in the nation. 40% of the new residents moving to New Mexico said the main reason they moved there was due to low property taxes and low cost of living. Over 35% of new residents who move to Tennessee moved there to retire. Again, primary reason was no state income taxes and low cost of living. Affordable housing was a top factor. New York, Illinois, New Jersey are the top three states where retirees want to spend their golden years. Over 67% of all residents moving from and/or to New Jersey in 2018 were outbound moves per a survey from United Van Lines.
Data And Statistics On Retirees Fleeing High Taxed States
United Van Lines, a national relocation company, conducted a poll of 26,998 of their clients. Here are the data from what they came up:
A third of the people who left New Jersey also cited retirement as a primary reason for their decision to pack up and go. In all, United logged 4,430 total shipments in the Garden State. Of these, 2,959 were sent out of state. Maine and Connecticut round out the top three states people are moving away from due to retirement, the moving service found. On the other hand, the Sun Belt is a hot destination for those entering their golden years. More than 4 in 10 people who moved to New Mexico in 2018 said retirement was a top reason for relocating. Florida came in second, and Arizona followed in third.
Retirees With Fixed Income Moving Because They Can No Longer Afford High Taxes
Retirees Fleeing High Taxed States due to having a fixed income.
- Financially strapped states like New York keep on raising property and other taxes to meet their budget shortfalls
- Even if a retiree has a home that is free and clear of any mortgages, property taxes are still due
- There are many financially strapped states where lawmakers keep on increasing property taxes year after year
- This often causes retirees to flee high taxed states to lower-taxed states with a lower cost of living and affordable housing
- Many retirees live on a fixed income such as social security and/or retirement income
- The cost of living is a major concern for most retirees
They are often concerned if they can meet their monthly bills and how long they can last with the savings and/or income.
Retirees Moving To Tax-Friendly
Retirees Fleeing High Taxed States to tax-friendly states.
- California, the most populous state in the United States are seeing an exodus of its residents due to high taxes
- California has the highest state income tax rate in the nation
- The highest wage earners in the state are paying 13.3% state taxes
Other high taxed states include Oregon at 9.9%. Illinois is over 5.0%, Colorado is 4.63%, and Arizona is at 4.54% according to the Tax Foundation:
Another consideration is how a destination state treats retirement income. In all, 13 states tax Social Security, including Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Rhode Island, Utah and Vermont.
Please look at the data below:
Besides property taxes, states who are financially strapped are increasing sales taxes, gas taxes, and other taxes to raise revenue. Illinois recently doubled its gas tax.
Increasing Taxes Is Forcing Retirees To Flee High Taxed States
New Jersey leads as the state with the highest property taxes. Illinois comes in a close second. New York is catching up fast in third place. Besides high property taxes, these states have the highest sales tax, state income taxes, and there seems like there is no cap in the nearing future. Many homeowners who have retired on a fixed income and no mortgage, rising property taxes are affecting their household income. Rising property taxes are also having an impact on property values. High taxed states have depreciating home values. This affects homeowners’ equity positions in their homes. States like Florida, Texas, Tennessee have no state income taxes and are attracting countless retirees from high taxed states.