[tankhead]

I've seen a lot of posters here tout Florida's lack of an income tax as an advantage, but.....

Is Florida's lack of a state income tax really an advantage when state income taxes can be deducted from federal income taxes?

[StarfishKey]

This would be better suited to the Florida forum. But my opinion is no. I have lived in multiple states, both with and without, to be able to compare what life is like in both circumstances.

[MadManofBethesda]

Originally Posted by tankhead

Is Florida's lack of a state income tax really an advantage when state income taxes can be deducted from federal income taxes?

The deductibility of state income taxes only comes into play if you itemize deductions on your federal return. The majority of taxpayers take the standard deduction, so most people don't benefit from being able to deduct state taxes. Moreover, even for those of us who do itemize, the deduction doesn't come close to offsetting the taxes. For example, when I lived in Maryland, I paid over $12,000 in state and local income taxes. The deductibility of those taxes saved me about 1/3 or $4,000 in federal taxes. Consequently, it still cost me $8,000 that I now don't have to pay since I moved to Nevada & Florida.

[The Villages Guy]

It has been a big savings for us, when all things are considered.

But I would think it would be different for people, depending on what state they are coming from.

[kyle19125]

For many it pretty much balances out when one considers income and lifestyle tradeoffs, not to mention home/auto insurance in most instances.

[bale002]

Originally Posted by tankhead

I've seen a lot of posters here tout Florida's lack of an income tax as an advantage, but.....

Is Florida's lack of a state income tax really an advantage when state income taxes can be deducted from federal income taxes?

Yes it is. You can't figure out the advantage? This phantom deduction of which you speak has nothing to do with. In fact, the advantage is hardly monetary.

It's in the Constitution, no politician in Florida would dare question it.

[Iching]

Absolutely but only for those who work hard in a private sector and have a decent income.

[bbronston]

A rising tide lifts all boats. In political terms, states that are able to attract more businesses will have fuller employment and more contributors to the local economies. For Florida, having no employment tax, combined with lower taxes of other types, and our natural beauty, combine to make our state relatively more attractive and more desirable.

Best, worst business tax climates « Bankrate, Inc.
2014 State Business Tax Climate Index | Tax Foundation

Whether or not you view this as an advantage is a subjective call but I think everyone benefits when government and business work together to encourage an environment of full employment.

[Spring Hillian]

My State & City income taxes ran a tad under $7,000 a year, 25 years ago.

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[go-getta-J]

My state income tax savings by living in Florida get eaten up by my housing costs here in Miami so its a net neutral for me.

The tangible tax savings really don't come into play until you hit a very high income bracket or derive a good amount of passive dividend/interest income.