Of course I also have to pay high local property taxes, state income taxes, and state sales taxes (I get to pay a sales tax on the price I pay for a bottle of beer, which includes a liquor tax- a tax on a tax!) Also, my so-called high income puts me in a higher federal income tax bracket. But I do feel much better now that I know I am getting a deal on my car insurance.
I don’t think the study does the justice. It’s fine to look at the median for insurance and income – but let’s not forget that insurance premiums do not rise if you are wealthy.
The ranking is also affected by the state’s median income, so Mass and VT may not be at the top as much for low premiums, as they are for higher median incomes. It would be interesting to see the actual numbers. I am sure some states have lower average premiums but are lower on the list due to lower median incomes.
My original comment was meant to be somewhat fatuous. In states with relatively high median incomes, like Massachusetts, you could argue that many things one purchases are relative bargains. However, would the author of the article argue that candy bars are a better deal in Massachusetts than Mississippi because they represent a smaller percentage of the average personal income? Obviously this has nothing to do with the candy bar, and everything to do with the income. Put another way, would a resident of Louisiana move to Massachusetts to take advantage of our cheap auto insurance? I don’t think so! They may come here because they want to make more money, but trust me, we don’t get to keep all the money we make.
Jeff – you make it sound like Mass is the only state that has high taxes. While I appreciate that fact, there are many states that have the same taxes (property, sales, liquor, tobacco, income, etc.) and our professional population doesn’t make nearly the salary of a Massachusetts professional. So, believe me, you are in the same boat with everyone else.
According to the conservative Tax Foundation, Massachusetts’ state/local tax burden percentage ranks 23rd nationally, just below the national average of 9.7%. It’s estimated at 9.5% of income. Old notions of Taxachusetts no longer apply and haven’t for years. Also Mass. may have high income but not as high as some other states. I just thought it was refreshing to see Mass. auto put in a positive light for a change. But it seems some people are never happy and must find a reason to bash our state.
Nancy;
I was interested in your comment. The study that you cite was from 2008- before our 25% increase in the sales tax and the big cuts in local aid that have hit many of our towns, forcing local property tax increases. I would also point out that this was the period where we incurred about 33 billion in unfunded retirement benefits for the public sector, mostly pensions. This is about equal to the current annual state budget. This means that we deferred much of our tax burden, which skews the statistics.
However, all of this has very little to do with my basic point (which maybe I have not made effectivly) that the premise of this study is flawed. I happen to live in a territory one town. I maintain that I pay more for my car insurance than I would if I lived in a comparable town in another state- including one of those states deemed less affordable. I would maintain that the actual premiums for comparable coverage for comparable drivers in comparable areas is a better measure of affordability than relating premiums to income.
I really don’t think that statement is Massachusetts bashing, but if you choose to construe it as such- so be it.
Of course I also have to pay high local property taxes, state income taxes, and state sales taxes (I get to pay a sales tax on the price I pay for a bottle of beer, which includes a liquor tax- a tax on a tax!) Also, my so-called high income puts me in a higher federal income tax bracket. But I do feel much better now that I know I am getting a deal on my car insurance.
Jeff, to boot you get to live somewhere other than Louisiana! That’s worth something!
This one is also my fault..George W
I don’t think the study does the justice. It’s fine to look at the median for insurance and income – but let’s not forget that insurance premiums do not rise if you are wealthy.
The ranking is also affected by the state’s median income, so Mass and VT may not be at the top as much for low premiums, as they are for higher median incomes. It would be interesting to see the actual numbers. I am sure some states have lower average premiums but are lower on the list due to lower median incomes.
To some extent it does. You pay more for coverage on a new Mercedes than an ’89 Ford.
My original comment was meant to be somewhat fatuous. In states with relatively high median incomes, like Massachusetts, you could argue that many things one purchases are relative bargains. However, would the author of the article argue that candy bars are a better deal in Massachusetts than Mississippi because they represent a smaller percentage of the average personal income? Obviously this has nothing to do with the candy bar, and everything to do with the income. Put another way, would a resident of Louisiana move to Massachusetts to take advantage of our cheap auto insurance? I don’t think so! They may come here because they want to make more money, but trust me, we don’t get to keep all the money we make.
Jeff – you make it sound like Mass is the only state that has high taxes. While I appreciate that fact, there are many states that have the same taxes (property, sales, liquor, tobacco, income, etc.) and our professional population doesn’t make nearly the salary of a Massachusetts professional. So, believe me, you are in the same boat with everyone else.
Very interesting.
Lies, Damn lies and Statistics. – Disraeli
I would rather live in Califorinia!
According to the conservative Tax Foundation, Massachusetts’ state/local tax burden percentage ranks 23rd nationally, just below the national average of 9.7%. It’s estimated at 9.5% of income. Old notions of Taxachusetts no longer apply and haven’t for years. Also Mass. may have high income but not as high as some other states. I just thought it was refreshing to see Mass. auto put in a positive light for a change. But it seems some people are never happy and must find a reason to bash our state.
Nancy;
I was interested in your comment. The study that you cite was from 2008- before our 25% increase in the sales tax and the big cuts in local aid that have hit many of our towns, forcing local property tax increases. I would also point out that this was the period where we incurred about 33 billion in unfunded retirement benefits for the public sector, mostly pensions. This is about equal to the current annual state budget. This means that we deferred much of our tax burden, which skews the statistics.
However, all of this has very little to do with my basic point (which maybe I have not made effectivly) that the premise of this study is flawed. I happen to live in a territory one town. I maintain that I pay more for my car insurance than I would if I lived in a comparable town in another state- including one of those states deemed less affordable. I would maintain that the actual premiums for comparable coverage for comparable drivers in comparable areas is a better measure of affordability than relating premiums to income.
I really don’t think that statement is Massachusetts bashing, but if you choose to construe it as such- so be it.
Missouri is listed as the third least affordable state but looking at the table it is actually Mississippi.