…if the money were left in your hands to put toward your own retirement.  WalletHub has looked at the differing state and local tax bites that they charge you for the privilege of living in their fair states.  Not surprisingly (to some of us) Red states take a sharply lower bite out of your money than do Blue states, as the figure below illustrates. 

But what does this mean in practical terms?  I looked at how the tax money could be used for an individual’s or family’s retirement program were the money left in the pockets of the earner.  Even though this study indicated that Wyoming’s state and local tax bite was the lowest, at $2,365, I used Texas’ more middling $5,193 take (middling because, even though Texas was rated as having the 7^th lowest collection rate, the difference between Wyoming and Texas was $2,828, and adding that to Texas’ number got me to the neighborhood of DC’s $8,034, which was ranked 37^th lowest) as my baseline because that’s where I live.

I also made a couple of heroic assumptions: working from WalletHub‘s assumption of a single filer, I fleshed that out to say he’s just turned 30 (yeah, he’s late to marriage), and he can afford to set aside the amounts identified below in his retirement program (actually, he chooses to afford, since he already can afford—he’s paying the taxes already).  Those amounts are the differences between the state and local taxes he’d pay in the state indicated in the table below and the taxes he’d pay in Texas.  I also assumed our young man can get a 3% return on investing his money, thereby roughly matching historical inflation.  As a 30-year old, he’ll work for 37 years before retiring.    Finally, this is a static analysis; it assumes no tax differential changes over those 37 years.

Even with that middling difference between Texas and DC, DC’s “state” and local tax bite is worth more than $100,000 over our man’s remaining working lifetime were he allowed to keep his money.  What does he get for that extra tax money taken?  A higher cost of living, and not much else.  More restrictions on individual freedom and responsibility—gun laws, for instance—and a denser population; although lots of folks like that part.

But think about what our man can do for himself with all that extra money—like visits to states with denser populations for all those attractions, while living more cheaply when he’s done with his vacation.  And more support for charities of his choice, through means of his choice, rather than those of government’s choices.