13 Cities Where Sky-High Taxes Are Driving People Away

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Taxes are a good thing, and cities need them to thrive, but sometimes they can be a real pain in the arse. The safety net is coming off the tightrope that so many Americans are walking between the cost of living and tax obligations. Residents in some cities are waving goodbye, not because they don’t love the homes, but because the tax bills are just too much to bear. It’s not only property taxes that are causing financial headaches; income taxes, sales taxes, and even hidden fees are getting us.

Taxes pay are for essential amenities, but at some point it becomes too much for residents. If you have to struggle to stay afloat, what’s the point of living in a great city Let’s look at some cities where taxes are sending people packing for pastures greener (and cheaper).

New York City

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The Big Apple, with its towering skyscrapers, Broadway lights and some of the highest taxes of anyplace in the country. Income tax rates can run close to 14%, and residents are faced with a triple threat of city, state and federal taxes. And when you add in steep property taxes and the ever increasing price of rent, it’s not hard to see why some New Yorkers are exchanging their pizza slices for something a little more affordable elsewhere.

San Francisco

Views of Golden Gate don’t come cheap. California’s hefty state income tax (up to 13.3%) is more than offset by sky high housing costs and local sales taxes that can run close to 10%. The dream of being able to thrive here can turn into a nightmare of endless expenses for techies and artists alike. Yet even with the perks of city life, many residents are rethinking whether the trade off is worth it when there are cheaper havens a few hours’ drive away.

Chicago

Illinois — Image Credit: Forcal35/ Pixabay

Not only is the Windy City breezy, it’s one of the priciest in the nation when it comes to taxes. Chicago’s property taxes are among the highest in the nation, and then there’s sales tax, at 10.25%. Add that to the state’s income tax and rising utility fees, and it’s easy to see why Illinois broke the record for population loss, according to Illinois Policy.

Los Angeles

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City of Angels? It’s more like city of relentless tax bills. California’s high income taxes and cost of living that feels like a punch in the wallet are headaches for Los Angeles residents. Add in housing costs increasingly outpacing wages and local fees continuing to rise, and many Angelenos looking to escape to somewhere else.

Seattle

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Seattle, no matter what income tax status Washington State may lack, it knows how to make up for it with other things. Sales taxes are a whopping 10.25 percent, and the cost of living, fueled by housing, is way high. The tech boom has been great for the area, but it has also brought price tags that make people ask themselves if that Starbucks is really worth the added expense.

Boston

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Boston is full of colonial charm and world class universities, but at a price. Property taxes are steep and the state income tax is 5%. That doesn’t sound like a bad thing compared to New York or California; take that with Boston’s expensive housing market, and you have a recipe for financial frustration. The Fenway cheers sound like a distant memory for many families trading them in for a suburb with lower tax burdens.

Honolulu

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There’s a price to pay for paradise, and for Honolulu residents, it’s steep. The state income tax in Hawaii goes up to 11% and the cost of goods is notoriously high from import expenses. Living on an island might sound ideal, but for many locals, staying in paradise isn’t so financially feasible long term.

Philadelphia

The City of Brotherly Love isn’t making too many friends when it comes to taxes. Philly residents pay a wage tax of 3.8398% (3.4481% for non-residents), the highest in the country. When you combine that with the state taxes in Pennsylvania and a rising cost of living, some residents are bidding farewell to cheesesteaks and welcoming cheaper options.

Detroit

Michigan — Image Credit: Vladacanon/Deposit Photos

For many, Detroit has been the comeback story of the century, but its tax rates are a thorn in residents’ side. Residents are slapped with a 2.4 percent income tax, and an even stinging property tax, in a city that is still trying to rebuild. For others, it’s hard to pass up the promise of lower costs in other states.

Austin

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Texans have heard plenty about their state’s lack of a state income tax, but the rapid growth of Austin has meant skyrocketing property taxes. People from all over are drawn to the city, and as home prices rise, so do tax bills. The dream of “keeping Austin weird” is being replaced by the reality of keeping finances intact for many.

Portland

Although Oregon may not have a sales tax, Portland residents also have some of the highest income tax rates in the state, up to 9.9%. Add in the area’s increasing housing prices, and Portland’s quirky charm is losing its appeal for those on a budget.

Atlanta

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While Atlanta’s cost of living may be lower than that of other cities, its taxes are no cakewalk. Property taxes are on the rise and the sales tax is 8.9% and many of the residents are discovering the city’s affordability is no longer what it used to be. Some are moving out to smaller towns in Georgia where their dollars go a little further.

San Diego

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Although sunny San Diego is a slice of heaven, it’s expensive. California is one of the highest income tax states in the nation, and its residents also have to deal with some of the highest housing costs in the nation. The beaches are beautiful but the tax bills could make you regret your priorities.

Disclaimer: This list is solely the author’s opinion based on research and publicly available information.