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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (17392)	4/17/2007 7:17:12 PM
From: Snowshoe	Respond to of 220298

In Alaska, tax woes are for other folks _______________________________________ adn.com NO. 1: Anchorage families shoulder nation's smallest tax burden among cities. By GEORGE BRYSON, Anchorage Daily News (Published: April 17, 2007) If all you want out of a big city in America is to pay as little in taxes as humanly possible, then Anchorage is the place for you. So says a study that compares tax rates in the largest cities in each state (plus Washington, D.C.) as reported this month in Kiplinger's Personal Finance magazine. As Americans prepared to pay their federal taxes, the periodical ranked Anchorage No. 1 on its list of "The 10 Most Tax Friendly Cities" in America in terms of state and local taxes. Credit Alaska's standing as the only state in the nation in which residents pay neither an income tax nor a state sales tax, said Kiplinger assistant managing editor Magali Rheault. "It's hard to beat Alaska when it comes to paying taxes," Rheault said. Her magazine based its ranking on a congressionally mandated study of 2005 tax burdens that was conducted last fall by the District of Columbia. It compared how much residents pay for four types of state and city levies -- income tax, sales tax, auto tax and property tax -- for a middle class family of three that makes $75,000 a year. After avoiding any taxes at all in the first two categories, an Anchorage family at that income level paid an average of $176 in auto tax ($342 below the national average) and $2,872 in property tax ($231 above the national average). Adding it all up, the Anchorage family paid $3,048 -- or 4.1 percent of annual income -- in state and local taxes, the study reported. That was less than half the national-average tax rate of 8.8 percent for the same income, and only one-fifth the rate paid by residents in Bridgeport, Conn. -- which topped the nation with a tax rate of 20.5 percent, mostly due to a combination of high home values and hefty property taxes. The study assumed that a family in the $75,000-a-year income bracket in Anchorage owned a home worth $195,876 in 2005, while a similar family in Bridgeport owned a home valued at $352,930. "That's something that the people in Bridgeport have to understand," Rheault said. "If you're going to live there, you're going to have to pay a lot in property taxes." In Anchorage, by comparison, the city's more modest property taxes are further offset by the state's oil wealth. The study listed Alaska as one of only seven states in the nation with no income tax (the others were Florida, Nevada, South Dakota, Texas, Washington and Wyoming) and one of only four with no state sales tax (along with Montana, Oregon and Delaware). The listing of tax-friendly cities in the May issue of Kiplinger's Personal Finance appeared as a sidebar to a package of stories on people who relocate at mid-career, and Anchorage's No. 1 ranking didn't surprise her, Rheault said. "Every time we do tax stories, Alaska always comes up as the best place to live because you don't have an income tax and you have the Permanent Fund," she said. "So residents can end up ahead, thanks to the oil revenues." The article noted that Alaskans receive an additional bonus of a yearly Permanent Fund dividend. However, the District of Columbia study didn't use it to calculate the Anchorage tax burden. Had it done so, factoring in three 2005 dividends worth $845 apiece, the same hypothetical family of three making $75,000 a year only would have owed a balance of $510 on its 2005 state and city tax bill -- and may have even made money in 2006, when dividends rose to $1,106.96 apiece. The study also found that Anchorage imposed the lowest tax rate in the nation (2.8 percent of gross income) on families making $150,000 a year but much more (8.9 percent) on families that make only $25,000 a year -- because a portion of rent that low-income people pay adds to their landlord's property taxes.