Nobody likes to labor for a living only to hand a big chunk of their earnings over to the government. If you want to reduce your tax burden, head west – but not too far west. According to a report published in USA Today, California is the fourth highest taxed state in the country, beaten only by New York, New Jersey and Connecticut. Wyoming, Texas, Nevada, Alaska and Louisiana residents are some of the least taxed.
States with the lowest tax burdens tend to collect revenue from sources other than their citizens. Nevada has tourism and gaming to bulk up its coffers, and Wyoming and Alaska enjoy thriving fuel industries. In Texas, Wyoming, Louisiana, Alaska, Tennessee and South Dakota, residents pay less than 8 percent of their earnings to the state in overall taxes. To put this in perspective, New Yorkers pay 12.8 percent.
Income taxes are not universal – seven states allow you to earn all you want and their governments won't take even a small bite. Alaska, Nevada, Texas and Wyoming are all among them. Florida, South Dakota and Washington don't charge income taxes either. Louisiana does, but the state's highest rate doesn't kick in until you earn $50,000 or more.
It might seem like sales taxes are everywhere, attached to everything you buy, but a handful of states don't charge these either – including Alaska. You can also buy things tax-free in New Hampshire, Delaware, Montana and Oregon. Although Nevada spares you from paying income taxes, it has one of the highest sales tax rates in the country. Wyoming levies one of the lowest.
Estate taxes are one of those things that many people don't tend to think too much about until they're older. You can live quite cheaply tax-wise in several states if you don't worry about the government taking a share of your assets when you die. If estate taxes are a consideration for you, however, neither Alaska, Wyoming, Nevada, Texas nor Louisiana levy them.
Although Nevada residents pay only 8.2 percent of their earnings in overall taxes, the government will find you if you take advantage of the state's legalized gaming. You'll pay almost 7 percent in taxes on your winnings. Alaska also has one of the highest gasoline excise taxes in the country, even though it's the least taxed state overall. If you prefer to own your residence rather than rent, Louisiana has relatively low property taxes, but Alaska's and Wyoming's are notoriously steep.
- Comstock Images/Comstock/Getty Images