(The Center Square) — Wyoming has been graded the most tax-friendly state in the country and saw a .4% population increase in 2020, according to an analysis by the personal finance website MoneyGeek.
The analysis found that Wyoming imposes an estimated $3,279 on a hypothetical family consisting of one child and a married couple earning the median national income of $82,852 per year.
With the data from MoneyGeek calculating a 4% deduction from annual income, Wyoming stands at the top of the country with an A grade on tax-friendliness.
Although the state does not have any income tax, funds are still needed for public maintenance such as infrastructure, police and schools. The state sales tax collects 4% from shoppers while some local governments impose up to an additional 1.4% tax on goods. Combined with the 0.55% property tax rate, some residents could pay up to about 6% in taxes.
Ranked at the bottom of the most tax-friendly states stands New Jersey, Connecticut and Illinois with taxes as high as 16%, or up to nearly $14,000.
While many of the least tax-friendly states experienced population declines from 2019 to 2020, populations rose as much as 2.1% in states with relatively low overall tax rates. Among the states that saw population growth with a consistently low tax rate were Wyoming, Nevada, Florida and Tennessee.
“While citizens have long since considered the cost of taxes when determining if and where to move, the debate has only intensified over the past year with the rise of remote working and the idea that you're not necessarily tied to the same location as your employer,” the MoneyGeek analysis says.
The U.S. Census Bureau confirms the findings in a population shift analysis which shows a higher population growth in areas with lower state and local tax burdens.