Your Survival Guy wants you to live in a place that rewards your hard work with respect and encouragement, not somewhere it is punished with taxation and regulation. That’s why I built Your Survival Guy’s Super States. The rankings recognize states that put residents’ best interests ahead of the radical agendas of politicians. In The Wall Street Journal, Richard Rubin and Jeanne Whalen recognize the divergence in red and blue states when it comes to tax policy. They write:
Republican-led states are racing each other to flatten, cut and eliminate individual income taxes, with 23 states lowering their top income-tax rates since 2021. Mississippi and Oklahoma, among others, put themselves on paths to eliminate personal income taxes. South Carolina is setting a course this year to drop its top income-tax rate to 1.99%, and Missouri residents may vote this November on a plan to phase out income taxes and allow lawmakers to expand sales taxes.
Democratic-controlled states are moving the opposite way, pushing to increase taxes on top earners to combat inequality and plug budget holes expected from Republicans’ cuts to federal health and nutrition assistance programs. Washington state’s legislature last week sent Gov. Bob Ferguson a bill that would create a 9.9% income tax on earnings over $1 million. New York City Mayor Zohran Mamdani is pushing state lawmakers to raise income taxes on high-income households. Hikes on top earners are a priority for some Democrats and progressive groups as they head to elections this fall in Rhode Island and Colorado.
The middle ground is quickly disappearing. In 2006, 15 states had top income-tax rates on wage income below 5% and just one exceeded 10%, according to the Tax Foundation, a group that favors lower rates and fewer breaks. Now, more than half of the states have gone below 5% and five others plus the District of Columbia are in double digits.
Their work relies heavily on analysis performed by The Tax Foundation. Earlier this year, The Tax Foundation’s Abir Mandal explained the effects states’ different tax rates can have, using New Hampshire (with no sales tax) and Vermont (which has a 6% sales tax) as an example. He wrote:
At the statewide level, businesses sometimes locate just outside the borders of high-sales-tax areas to avoid being subjected to their rates. A stark example of this occurs in New England, where even though I-91 runs up the Vermont side of the Connecticut River, many more retail establishments choose to locate on the New Hampshire side to avoid sales taxes. One study shows that per capita sales in border counties in sales-tax-free New Hampshire have tripled since the late 1950s, while per capita sales in border counties in Vermont have remained stagnant. At one time, Delaware actually used its highway welcome sign to remind motorists that Delaware is the “Home of Tax-Free Shopping.”
You can see on Mandal’s map below that many states with high sales taxes are located next to those with low, or no, sales taxes, making for prime avoidance opportunities.
Action Line: States are the laboratories of democracy, and money will always go where it’s treated best. If you’re planning a move to a better America, begin your search with Your Survival Guy’s 2026 Super States. And click here to subscribe to my free monthly Survive & Thrive letter.
Originally posted on Your Survival Guy.