(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 in the current session.