It's not what you earn, it's what you keep that often dictates your standard of living. With that in mind, take this quick tour of the ten cities in the nation that have the lowest overall tax burden. These cities came out on top (er, at the bottom, really) of the 2007-2008 District of Columbia Tax Rates and Tax Burdens Survey for the largest city in each state, plus D.C.
Tax rankings are based on 2007 tax return computations for a two-income couple earning $75,000 with one school age child. The real property tax is a function of housing values, real estate tax rates, assessment levels, homeowner exemptions and credits. The auto tax figure assumes the couple owns two cars and is based on the estimated registration fees, state and local gasoline taxes, and personal property taxes, if any.
No. 1 Anchorage, Alaska
Income tax: $0
Property tax: $2,572
Sales tax: $0
Auto tax: $165
STATE & LOCAL TAX BURDEN: 3.6%
(National median tax burden: 8.5%)
Urban Facts: Taxes? Residents of Anchorage actually receive an annual "dividend" payment derived from levies on state oil drilling operations.
In sheer geographic size, the city of Anchorage is larger than the state of Rhode Island. It is home to 42% of all Alaskan residents.
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No. 4 Seattle, Washington
Income tax: $0
Property tax: $1,698
Sales tax: $1,561
Auto tax: $457
STATE & LOCAL TAX BURDEN: 5.0%
Urban Facts: Seattle may be a tax-friendly city, but it also has a high cost of living, well above the national average.
The median home sales price was $375,000 for last quarter of 2008, compared to $200,000 at the national level.
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No. 5 Las Vegas, Nevada
Income tax: $0
Property tax: $2,251
Sales tax: $1,072
Auto tax: $486
STATE & LOCAL TAX BURDEN: 5.1%
Urban Facts: Gaming taxes account for 27% of the state's general revenue funds.
The city's rapid growth a few years ago that drew more than 5,000 new residents every month was propped up on subprime lending. Now Las Vegas has the highest foreclosure rate among U.S. cities.
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No. 6 Jacksonville, Florida
Income tax: $0
Property tax: $2,456
Sales tax: $1,284
Auto tax: $195
STATE & LOCAL TAX BURDEN: 5.2%
Urban Facts: The state intangibles tax on certain investments was repealed in 2007.
Jacksonville is the third-most populous city on the East Coast, after New York City and Philadelphia. (Other cities such as Boston, Washington, D.C., and Miami have larger metropolitan area populations.)
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No. 7 Sioux Falls, South Dakota
Income tax: $0
Property tax: $2,760
Sales tax: $1,518
Auto tax: $294
STATE & LOCAL TAX BURDEN: 6.1%
Urban Facts: In fiscal year 2007, lottery gaming put $110 million in the state till to provide a 30% property-tax relief.
Sioux Falls has the largest shopping center between Minneapolis and Denver.
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No. 8 Phoenix, Arizona
Income tax: $1,241
Property tax: $1,401
Sales tax: $1,849
Auto tax: $588
STATE & LOCAL TAX BURDEN: 6.8%
Urban Facts: Tax information for Phoenix includes the entire metropolitan area which extends to cities of Scottsdale, Mesa, Tempe, Mesa, Chandler, Gilbert, Glendale and Peoria. But housing prices and local tax can vary significantly from locality to locality.
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No. 9 Billings, Montana
Income tax: $2,559
Property tax: $1,865
Sales tax: $0
Auto tax: $689
STATE & LOCAL TAX BURDEN: 6.8%
Urban Facts: Billings taxpayers with adjusted gross incomes of less than $30,000 can exclude up to $3,600 of their pension income from state taxes.
Dubbed locally as the "Magic City," Billings is supporting growth by dunning its energy, agriculture, and transportation industries.
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No. 10 Chicago, Illinois
Income tax: $2,019
Property tax: $1,023
Sales tax: $1,624
Auto tax: $478
STATE & LOCAL TAX BURDEN: 6.9%
Urban Facts: Chicago's effective real-estate tax rate of .70% and various exemption programs keep real property tax low. Just keep in mind that this surprisingly tax-friendly city doesn't offer the same breaks for other cost-of-living expenses.
SOURCE: 2007-2008 District of Columbia Tax Rates and Tax Burdens Survey
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