There are both benefits See this and drawbacks to living in states that don’t impose a state income tax.
You might save money. But that doesn’t mean you will pay no taxes, and there are trade-offs to consider. Sometimes, states with no income taxes do not have the best public services.
For example, you may want to move to a state such as Texas to avoid paying income taxes, but you will need to be prepared to pay more for health care. In general, Texas has some of the lowest government spending on health care or public transportation.
When states impose higher property taxes or sales taxes to bring in enough money to make up for the lack of an income tax, that can also affect the overall affordability of living in a no-income-tax state.
This matters the most for lower-income people because state sales taxes have a greater impact on overall affordability. For example, students going to college and working part time may have low incomes. But if they live in a state with a high sales tax instead of an income tax, they will be paying the same high rate as fully employed people with much higher incomes. As a result, the students may struggle more to make ends meet than the full-time worker.
Remember, too, that in most cases, Americans still pay some tax on their income. Even if a person isn’t subject to state income tax, the majority of the U.S. population pays federal income tax, and for many people, those federal taxes are quite a bit higher than any state income tax.
Site Title 