California is not the least tax-friendly state in the union.
That distinction belongs to Illinois, according to Kiplinger’s list of the most and least tax friendly states in the country. The Land of Lincoln gets the bottom spot thanks in large part to its high property tax and a 6.25% state sales tax that climbs as high as 10.5% per taxable transaction in some locales after counties and municipalities take their share.
Many people “when they talk about California tax, they focus on the 13.3% (income tax) rate, which is the top rate — but that is for people making more than $1 million.” Rocky Mengle, the tax editor for Kiplinger’s, told MarketWatch. For many others, the rate is much lower. “California has a fairly progressive income tax, with nine brackets.”
Mengle added that these kinds of analyses are often useful to people looking to relocate, such as in retirement. He said retirees should “pay attention to what type of income they are going to be relying on in their golden years.” That’s because states can tax income, Social Security, money from an IRA or 401(k), rental-property income and other sorts of income differently.
To see lists of the 10 least- and most-tax friendly states …
Advertisement
Related Stories
Housing Markets
Metros Where Housing Prices Have Doubled in Less Than 10 Years
Historical data show it's taken less than 10 years for home prices to double in 68 of the country’s 100 largest cities
Housing Policy + Finance
Even With Inflation Running Hot and Elevated Mortgage Rates, Buyer Demand Rises
Mortgage rates will likely stay high for the next few months, but that doesn't seem to be deterring homebuyers
Financing
Q1 2024 Foreclosure Activity Rises Slightly
Data show New York, Houston, and Chicago topping the list of major metros with the greatest number of foreclosure starts during Q1 2024
