The Most (& Least) Tax-Friendly States According to Consumer Affairs

A mariner should live where they & their family are the happiest, not based on a tax rate. But for young mariners considering a place to settle down or old salts looking for change, there’s this article here.

From the article:

“…not all Americans are taxed equally. Residents of some states are unencumbered by state income taxes, while others face an outsize burden from sales and property taxes.”

https://www.consumeraffairs.com/finance/tax-burden-by-state.html#the-five-most-tax-friendly-states

This could easily be added to that statement:
"The list of states with the least amount of state taxes maps pretty closely to the states receiving an outsized amount of money from Federal taxes paid by all states.

For example, for every Federal tax dollar sent by Idahoans to the Federal treasury they receive $1.28 in Federal services, amounting to about $4,000 annually per capita. Where does this money come from? Proportionally, from California, but also states like Washington.

These states pay more into the Federal treasury than they get back. The money goes to bolster the economies in other states.

Without this redistribution of wealth from these ‘maker’ states, Alaska, Idaho, Wyoming, and others, would either need to increase their taxes, or do with less infrastructure and services."

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This is bullshit and has been anytime some liberal tries to bring it up as an ignorant clickbait gotcha they read on some Facebook post.

Those states receive more federal dollars because of the massive amounts of federal land in those states compared to the population.

That’s it. It’s one of the stupidest and easily disproven liberal talking points around. It doesn’t die because none of you bother to fact check what you’re spewing.

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Too bad for you that you read the article from centrist, perhaps left leaning Consumer Affairs & my opening comment, then come up with your reply above. Some times it’s better to look at the small picture & leave the big picture alone. Hitting a sore spot for anyone wasn’t my intentions when opening this thread. I don’t think that was the intent of Consumer Affairs either. It sounds like you’re unhappy about your high state taxes & instead of blaming your local/state government you prefer to blame the federal & other state governments? Again, too bad for you because I have friends from Maine, Massachusetts & California who cares little about their tax rates compared to others. They’re happy to pay the taxes & enjoy where they live regardless of the tax rate & happiness of those who live in less burdensome states.

And if the land were transferred to state care then state taxes would have to pay for the upkeep.

But instead Federal taxes pay for it, allowing state taxes to be used for something else. The land is considered to be part of the state. Local people can mine it, forest it, get tourist dollars from it, and otherwise profit from it, but as you said, Federal taxes go for the upkeep and maintenance of it.

Is any part of that incorrect?

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Literally all of that is incorrect and/or intentionally obtuse.

The only reason you would even attempt that as a response is you think anyone to the right of a corrupt union organizer is a moron. We’re not, we just don’t bother engaging with such drivel very often.

Go do some research on federal land revenue streams and report back.

[image]YouTube +1

Well, let’s invite our old friend AI to chime in on the matter:

Idaho receives millions annually from federal lands through Payment in Lieu of Taxes (PILT) and mineral leasing revenue, with roughly $38.2 million in PILT funding received in 2023. Additionally, mining on Bureau of Land Management (BLM) lands in Idaho generated $394 million in total economic revenue in 2023, with mining contributing $2.4 billion to the state economy in 2025.

Key Revenue Sources from Federal Land & Mining
PILT Payments: The federal government provides payments to local governments to offset losses in property taxes due to nontaxable federal land. Idaho received $38.2 million in 2023.

BLM Mining Revenue: In 2023, BLM mining programs (phosphate, sand, gravel) generated $394 million.

Mineral Royalties: A portion of royalties from federal mineral leases on public land is shared with the state.

Endowment Land Revenue: While not directly federal, the Idaho Department of Lands generated a record $91.7 million in FY2025 from state-managed endowment lands, which are often interspersed with federal lands.

Economic Impact
Total Mining Contribution: Mining contributed $2.4 billion to the Idaho economy in 2025, supporting over 12,800 jobs.

Energy Generation: Idaho’s energy industry, which includes, but is not limited to, federal land activities, generated $6.3 billion in GDP in 2022.

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BTW, if anyone cares, I’m a centrist:

For every post I make on GCaptain I make ten on local SM advocating for centrist things like:

Doubling the size of the local police force, along with equal increases in prosecutorial staff…

Identifying and tracking 1,000 of the worst recidivist criminals currently at large in the state and when they so much as drop a gum wrapper locking them up for no less than 25 years (I chose 1,000 because the state penal system housed 1,000 more prisoners in 2019 than it does now, meaning the infrastructure for housing them presently exists)…

Reserving any public money going to aiding homeless people strictly to those who came from this county, and either demanding other counties or states pay us to take care of their indigents, or shipping them back to where they came from…

For all that some of my progressive neighbors call me a fascist, just like some of you call me a socialist.

I don’t fight the present round-up of illegals. I think its roll-out and implementation is all thug-cosplay but what I tell my progressive neighbors is that if they think the president should pay for breaking the law (as I do), then illegals need to pay for breaking the law also. You can’t pick and choose.

I’m a centrist in a society increasingly dominated by extremists from both sides, consumed with feeding their outrage addiction. So far gone they don’t even know what a ‘center’ is anymore. ‘Centrist’ to them is like a color they cannot see, or a frequency they cannot hear. They cannot conceive of it, so for them it does not exist.

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Friend, my state has no income tax, and people from other states come and retire here for that reason. Welcome to all (unless you’re homeless). :slight_smile:

The retort of those who are presented with statements contrary to their political view point but have no counterfactual points to present are: Facist ! Liberal ! Nazi! Communist! Trump Derangement Syndrome !

Just ignore them.

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Except the authors of the article & O.P. (me) weren’t giving any political view points whatsoever. Mariners in ECR’s, at galley tables & on this forum talk about taxes, cool places settle down & retire to all the time without getting political. The person you were giving advice to has a chip on his shoulder & definitely SHOULD be ignoring people & their normal discussions if he wants to insert his political viewpoints into everything. Below I have another article about a subject I & many mariners talk about frequently. I found it to be accurate & a good read. If anyone chimes in to make it a political discussion then they should get off their phones for a few months & go take a hike.

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I’ve said it before - I’m pretty conservative, “colored” by my belief that I know right from wrong.

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The whole federal money thing is further confused because it (usually) counts spending on military in that state. Sparsely populated states like Alaska with big military bases, that skews the number. Hawaii, where a pretty solid chunk of the population would be happy to have less military presence, shows up as getting a bunch of federal money regardless of how that military money is spent exactly. Click bait articles and top ten lists aren’t exactly famous for capturing that nuance imho, but what do I know

All of those numbers count towards the federal money going to that state you’re attempting to cite in your wildly inaccurate ‘maker states and taker states’ bullshit narrative, so I’m not sure why you’re posting information that contradicts what you just said.

It pays to not take things at face value without research, even when they make you feel better than people you disagree with.

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From reading the original article & the methodology section at the bottom, the researchers didn’t delve into military bases, federal spending, oil royalties etc.. The study was based on how much, what percentage of a person’s earnings were kept by them & what percentage was paid to local & state governments. When it comes to my tax money, that’s all I care about. I’m not worried about the would’ves, could’ves & how much Eskimos pay for ice in Alaska. How much do I keep? If I move somewhere else, how much would I keep there?

Blaming other states or the federal government for how much taxes my local & state charges me is pointless. If Idaho increases their state sales tax that’s not going to lower the taxes for the people of Connecticut?!

________________________

Methodology

To determine which states have the highest and lowest overall tax burden, ConsumerAffairs evaluated all 50 U.S. states across five weighted tax categories. For each metric, the state with the lowest tax burden received the maximum number of points, with other states earning relative scores. Category scores were combined to produce an overall tax burden score out of a maximum of 100 points. Higher scores indicate greater tax friendliness.

Income tax burden (30 points):
Sales tax burden (30 points):
Property tax burden (25 points):
Excise tax burden (10 points):
Other mandatory state and local taxes (5 points):

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Was responding to the makers and takers line of argument, not to the original tax burden article, should have been more clear.

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Grok:

The “best” and “worst” tax-friendly states depend slightly on the metric—whether you’re looking at actual taxes paid by a typical household (effective burden) or the structure of the tax system (competitiveness, simplicity, and neutrality, which affects long-term economic appeal). Both perspectives draw from 2025–2026 data and consistently highlight the same groups of states.

Best Tax-Friendly States (Lowest Taxes / Most Competitive)These states generally impose the lowest overall state and local taxes on residents and/or have the most pro-growth tax structures. Top states by effective total tax rate on a median U.S. household (WalletHub 2026 analysis, assuming ~$81k income, $333k home, etc.; national average ~11%):

  1. Alaska — 6.94% effective rate (~$5,634/year) — No state income tax, no statewide sales tax.

  2. Delaware — 7.19% (~$5,842).

  3. Wyoming — 7.58% (~$6,156).

  4. Idaho — 7.65%.

  5. Montana — 7.88%.6–10 include South Carolina, Colorado, Nevada, and Florida (all under 9%).

    wallethub.com

Top states by overall tax burden as % of personal income (WalletHub data): Alaska (~4.9%), Wyoming, New Hampshire, Tennessee, Florida.

Top states by Tax Foundation’s 2026 State Tax Competitiveness Index (structure as of July 2025):

  1. Wyoming

  2. South Dakota

  3. New Hampshire

  4. Alaska

  5. Florida(Also strong: Montana, Texas, Tennessee, Idaho, Indiana).

    taxfoundation.org

What makes them tax-friendly?

  • No (or very low) state income tax — This is the biggest factor. Nine states have none on wages: Alaska, Florida, Nevada, New Hampshire (fully phased out interest/dividends tax by 2025), South Dakota, Tennessee, Texas, Washington, and Wyoming. Income tax is often the largest personal tax and is progressive, so it hits higher earners hardest. These states rely instead on sales taxes, property taxes, tourism, oil/minerals (e.g., Alaska’s oil revenue even pays residents a Permanent Fund Dividend), or other sources.

  • Low or no statewide sales tax in some (Alaska, New Hampshire, Montana, Delaware).

  • Moderate property taxes and business-friendly rules (flat/low rates, few brackets, broad bases that avoid double-taxing).

  • Result: Residents in the best states can pay less than half what people in the worst states pay on the same income/house/car.

    wallethub.com

Worst Tax-Friendly States (Highest Taxes / Least Competitive)These have the highest effective burdens and most complex/punitive structures. Bottom states by effective total tax rate (WalletHub taxpayer ranking):

  • Illinois (16.87%, ~$13,699/year — worst overall)

  • New York (14.95%)

  • Connecticut (14.58%)

  • Pennsylvania, New Jersey, Kansas, Nebraska, Iowa, Ohio, Texas (high property/sales despite no income tax).

    wallethub.com

Highest tax burden as % of personal income: Hawaii (13.92%), New York (13.56%), Vermont, California (~11%), Maine.

Worst in Tax Foundation Competitiveness Index: 50. New York49. New Jersey48. California(Also poor: Connecticut, Maryland, Washington, Minnesota, Massachusetts, Vermont, Hawaii).

What makes them unfriendly?

  • High progressive income taxes — Top rates of 8–13.3% (California, Hawaii, New York, New Jersey, etc.) plus many brackets, phase-outs, and surtaxes. This is the dominant driver of high burdens.

  • High property taxes (New Jersey, Illinois, New Hampshire, Vermont often rank worst; effective rates can exceed 2% of home value).

  • High sales/excise taxes or broad bases that tax groceries, services, or business inputs (Hawaii, Louisiana).

  • Complex rules (e.g., taxing capital gains at ordinary rates, estate/inheritance taxes, poor conformity with federal tax code) that increase compliance costs and discourage business/investment.

    taxfoundation.org

Quick Notes

  • No-income-tax states aren’t automatically best overall — Texas and Washington rank lower because of very high property or sales taxes.

  • Rankings are for a “median” household; your personal situation (income level, homeownership, retirement status, family size) matters a lot. High earners care more about income tax; retirees about property/sales; businesses about the Competitiveness Index.

  • Data reflects 2025–2026 rates and burdens (U.S. Census, Tax Foundation, etc.). Taxes can change with legislation.

If you’re considering a move, factor in cost of living, services received, and your specific tax situation (e.g., via a tax calculator). The no-income-tax Sun Belt and Mountain West states dominate “best” lists for most people.

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PA is listed among the worst.

Sales tax, property tax, sugar tax, inheritance taxes, I could go on but I’m sure you get the pic.

Texas is good at shifting the tax burden to the residents. All the wonderful business deals have done little to mitigate tax burdens on individuals. 8.5% sales tax in my area. Because of our homes location, if I had children in the school system here, they’d be eligible to attend in either Dallas or Collin County. That causes me to be liable for property taxes in both counties. It ain’t cheap.

This might be splitting hairs, but the original article having Hawaii as absolute worst and California at number 4 doesn’t line up with how it actually feels living in those places.

Hawaii has a crazy low outlier property tax that makes a huge difference. Paying less in a year than similar places in Cali pay in a month is huge.

Sales tax is more complicated but at the end of the day paying 4 plus percent at the cash register instead of 10 feels way nicer.

Gasoline taxes you feel every time you fill up also way lower in the island communist state vs the mainland communist state.

Cool thing about the US is we can all vote with our feet and just bail if any state gets to be too much. Just wanted to voice my little gripe with Consumer Affairs on that list.

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