Tax-friendly states have higher population growth

A study conducted by MoneyGeek shows that Wyoming, Nevada, Tennessee, Alaska and Florida are the most tax-friendly states.

Families living in Wyoming pay an average of 3.9% of their income in taxes. This makes it the most tax-friendly state in the U.S. It is followed by Nevada (4.6%), Tennessee (5.5%), Alaska (5.5%) and Florida (5.6%). MoneyGeek, which compiled the report based on data from the Census Bureau, the Bureau of Labor, and the Tax Foundation, rates these five states with the highest grade of A. All have a Republican governor.

Over $11,000 cheaper

On the opposite end of the spectrum, receiving an F, are New Hampshire (14.3% of income), New Jersey (14.8%) and Connecticut (15.3%). In last place, with 16.9% of household income, is Illinois. These states have Democratic governors, except for New Hampshire. Its governor, Chris Sununu, has presidential aspirations.

"For a typical middle-class family, the tax burden difference between living in the highest-tax state (Illinois) and the lowest-tax state (Wyoming) is $11,340 per year."

California, which received a B grade, takes 8% of household income. Virginia and Texas were given a C (9.8% for both), and New York got a D (14.1%).

Lower taxes, higher population growth

One of the main conclusions of the report is that states with lower taxes tend to experience higher population growth than the rest. The five states that scored an A grade have a growth rate of 1%, which is higher than the national average. In particular, "Florida, which received an A and ranked as the fifth most tax-friendly state in the nation, saw a 2.1% increase in its population growth - the largest of any state."

In contrast, the states that scored the worst have seen their population decrease. On average, they have grown by 0.1%, significantly below the national average. The report notes that "New York, which received a D and ranked as the fifth-worst state for tax burdens, saw the biggest population decline (-0.8%) in the U.S."