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Top 10 tax-friendly U.S. cities

City_silhouette In its May issue, Kiplinger magazine takes a look at 10 cities it says are the most tax-friendly.

The list is based on data from the latest survey by the Washington, D.C., government of the tax bite in the largest city in each of the 50 states and the nation's capital.

Kiplinger chose the rankings for a dual-income couple, with one school-age child and a combined gross income of $75,000 in 2005. For this hypothetical family, the magazine says the national median taxes are state and/or local income levies of $2,486; real estate/property taxes of $2,261; sales taxes totaling $1,336; and auto/personal property taxes of $483.

And now, drum roll please, the winners are:

10.  Billings, Montana
  9.  Houston, Texas
  8.  Fargo, North Dakota
  7.  Sioux Falls, South Dakota
  6.  Memphis, Tennessee
  5.  Honolulu, Hawaii
  4.  Las Vegas, Nevada
  3.  Jacksonville, Florida
  2.  Cheyenne, Wyoming

And the most tax-friendly city in the United States is ...

1. Anchorage, Alaska, with an overall tax bite of 4.1 percent.

Good for the folks who live in these 10 cities. Me, I'd gladly visit a couple of them. Already have, in fact; most recently, Houston.

But I wouldn't move to any of them. Nope, not even Honolulu. A big city is a big city, even with leis and island breezes.

And nope, even being as big a tax geek as I am, taxes are not  going to be the prime motivator of where I live.

I do agree that the state and local levy amounts of wherever you choose to move are important to know. If you're relocating to a tax-unfriendly spot for job reasons, then you might be able to use that information to negotiate a higher salary. Remember, of course, that more money means more federal as well as potential state income taxes.

And if you find where you live is perfect in every other way except for its too-high taxes, then at least you'll have something to complain about. Everybody should get to whine (just a little!) about something every now and then!

You can get the tax details on each of Kiplinger's top 10 towns in the slide show that accompanies the story.


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