This is neat. However, one big problem with national cost of living projections I found is property tax data, as taxes are set on the municipal level.
State or county averages are pretty useless in high-tax states such as in the NE: in NJ or NY, the range is ~0% to over 3% of assessed values, depending on the municipality. There is no national source for municipal level mill and equalization rates and the figures on Zillow & co are only point in time snippets (and often wrong) and will change through your purchase or if you remodel. And for the most part, this data resides only in PDFs, if it’s available at all. With the SALT deduction currently at $10k and likely going to be subject to wild swings over the next decades, property taxes can dwarf most other expenses such as health insurance or sales tax. At current mortgage rates, they could even be higher than your actual mortgage payments.
Another problem is state long term capital gains taxes. If you have investable assets or plan on building those, it makes a big difference whether you live in a state that has them or does not have them and how soon you’ll have them. Federal LTCG taxes are easier to navigate if you can time your income - sell assets in years without (much) earned income, for example. But the state level is more rigid.
For example, TN and WA may come ahead based on capital gains taxes (they don’t have any), while GA has nearly 6%.
That being said, an analysis like that could be useful for comparing states that resemble each other in terms of their tax profile. Or you exclude high prop tax and non-zero LT cap gains tax states from the beginning but then your state sample shrinks, leaving less room for the many subjective characteristics that cannot be quantified easily…
State or county averages are pretty useless in high-tax states such as in the NE: in NJ or NY, the range is ~0% to over 3% of assessed values, depending on the municipality. There is no national source for municipal level mill and equalization rates and the figures on Zillow & co are only point in time snippets (and often wrong) and will change through your purchase or if you remodel. And for the most part, this data resides only in PDFs, if it’s available at all. With the SALT deduction currently at $10k and likely going to be subject to wild swings over the next decades, property taxes can dwarf most other expenses such as health insurance or sales tax. At current mortgage rates, they could even be higher than your actual mortgage payments.
Another problem is state long term capital gains taxes. If you have investable assets or plan on building those, it makes a big difference whether you live in a state that has them or does not have them and how soon you’ll have them. Federal LTCG taxes are easier to navigate if you can time your income - sell assets in years without (much) earned income, for example. But the state level is more rigid.
For example, TN and WA may come ahead based on capital gains taxes (they don’t have any), while GA has nearly 6%.
That being said, an analysis like that could be useful for comparing states that resemble each other in terms of their tax profile. Or you exclude high prop tax and non-zero LT cap gains tax states from the beginning but then your state sample shrinks, leaving less room for the many subjective characteristics that cannot be quantified easily…