No-income-tax states relevant to relatively few

    The state of Florida has been a magnet for retirees for many decades, starting in the 1950s. An average winter temperature in the low 70s in southern Florida was just too tempting to pass up for many long-suffering northerners.  For wealthy retirees set for life with their stock dividend yields and healthy pension payments, the lack of an income tax in the Sunshine State saved them thousands of dollars annually.
    Florida, Texas and Tennessee are among the handful

of U.S. states with no income tax.  Wealthy retirees play the state income tax game to a fare-thee-well; one former CEO of a company I worked for lives half the year in Florida and half the year in New Hampshire, another zero-income-tax state.  For him and a relatively few others, this makes sense; their incomes remain high in retirement, and what they save can go toward club fees and travel expenses.  But, to paraphrase a popular saying, the rich are different than the rest of us; they have more money to protect.   Below a certain income level, the income tax on its own means little; other costs of living are far more relevant.
    Look at the Florida metro areas of Naples and Orlando.  Of course, the state income tax in the two cities is the same, zero.  Property and sales taxes in Orlando are actually higher than in Naples but, in terms of overall cost of living, according to BestPlaces.net, Naples is one of the highest in the nation, 151 percentage points above the national average; Orlando is 6 points below the national average.  Panama City, FL, is even cheaper, at 14 points below the national average, with the same income tax level. 

    The differences are largely about real estate, although Naples property values have fallen dramatically in the last 18 months, a fact BestPlaces may not have caught up with yet.  But the point is that, unless you have a CEO's pension, income tax has little if anything to do with cost of living.