States Without Income Tax

Every year, people who live in the great state of New York fork over an average of around $2,000 dollars per person in income tax to their local state government.  This is because residents of the state of New York live in the state with the highest income tax rate in the country.

While this dubious designation may leave some New Yorkers fuming, most other states have imposed their own percentages of income tax on their citizenry as well.  But not all states derive their income from their populace through income tax.

In the United States there are seven states that do not tax their populaces with an income tax.  And with the fear that these states may soon become overrun with former New Yorkers, the seven states that do not charge income tax are:

  • Alaska
  • Florida
  • Nevada
  • South Dakota
  • Texas
  • Washington
  • Wyoming

Most individuals may immediately question where these states generate their tax income, or where they receive funding for state run services without charging their citizens with an income tax.  The answer is varied from state to state, but the end result is that these states have found ways to fill their coffers without implementing an income tax.

Some states make up taxes by imposing higher sales tax, although Washington doesn’t have that either, while some states charge more in corporate taxes.  Still others simply strive to balance their state budget without the increase from income tax, but this usually will come with the costs of reduced services or completely severed services.

While it is a fine line to walk, these seven states have decided to go without charging income tax and, for the most part, they are finding success while doing so.

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