(The Center Square) − Retirees shopping for a lower cost of living often look first at a state’s tax burden — but that alone doesn’t tell the full story.
When all major state and local taxes are considered, Louisiana offers one of the lowest overall tax burdens in the country for a typical middle-income retiree. But sky-high insurance premiums, according to data from Bankrate might make some think twice.
A recent comparison using a two-person household with $100,000 in non-tax-exempt retirement income, a home priced at the state median, and $16,000 in annual taxable purchases shows Louisiana’s total tax burden at just $4,793, according to an analysis of data from the nonpartisan Tax Foundation.
That includes $2,250 in income tax, $924 in property taxes, and $1,619 in sales taxes. Among the states examined, only Florida offered a lower overall tax bill for this hypothetical retiree.
Louisiana’s low property taxes, in particular, help keep the total down. But in a state increasingly affected by extreme weather, the cost of insurance can quickly erase those savings.
The average annual premium for full coverage auto insurance in Louisiana is a whopping $3,994 — among the highest in the nation. Meanwhile, average homeowner’s insurance runs $4,135 per year for a $300,000 dwelling, far above the national average and trailing only a few disaster-prone states like Florida and Nebraska.
Louisiana lawmakers enacted major reforms to its tax policy in November’s special session and the Legislature could be poised to address insurance reform.
