Have you ever thought of moving because of the state income taxes?
Many states are facing financial challenges that unprecedented in US History and this is causing drastic changes to the economical landscape. Unfortunately, sometimes these changes include income tax increases.
We could discuss the pros and cons of economy stimulation via tax hikes, but more often than not this falls into a political debate. However, many people choose to leave their particular “home” states because of changes in the tax culture.
Illinois is one of those states that is dealing with both residents and businesses leaving. Illinois is faced with the challenge of encouraging local businesses to stay while recruiting new businesses to come and invest into the state that is most known for political corruption and mob activity.
One of Illinois’ largest employers, Caterpillar, has expressed displeasure in a recent tax hike by Governor Pat Quinn.
In a March 21st letter President and CEO Doug Oberhelman writes a very polite and direct letter expressing the problems within the Illinois businesses culture.
“I want to stay here…I’d like to invest more here—Illinois has always been the heart of Caterpillar,” Oberhelman writes. “But as the leader of this business, I have to do what’s right for Caterpillar when making decisions about where to invest.
“The direction that this state is headed in is not favorable to business, and I’d like to work with you to change that. Frankly, we need to re-structure this State’s business from top to bottom. I think you know that.”
Well said Mr. Oberhelman.
Mr. Oberhelman mentions that he is being recruited by other states to relocate Caterpillar’s massive business. This could mean 1000s of jobs exiting Illinois and causing an even greater financial mess. The state of Nebraska is on record as to wanting Caterpillar to relocate.
If you are considering leaving your home due to the tax climate, according to an article on MSN, Alaska is the most tax friendly with no state income tax, state sales tax or inheritance tax. However, it is cold…I personally can’t stand the cold weather! I know, I know, it's not like Chicago is warm in January!
And the worst state goes to our friends in California. Although the weather is beautiful, you are probably happy you don’t live there. State income tax is 1.25%-10.55% and the state sales tax is 8.25%.
In case you’re wondering, Illinois wasn’t in the worst five places to live, but I’m sure they are quickly gaining ground.
If you are concerned about how much Uncle Sam will get this year based off of your hard work, schedule some time with your local income tax professional at Liberty Tax Service. Get your taxes done and have some fun!