20 Most Tax-Friendly Places for Wealthy Families

Tax loopholes. Tax shelters. Tax write-offs. These are just a few of the strategies that many people assume the rich use to avoid paying taxes.

Without a doubt, there are plenty of wealthy Americans who use tax laws to their advantage to reduce the amount they have to pay. But that doesn’t mean they’re escaping taxes entirely. In fact, a millionaire’s tax surcharge is added to families who earn $1 million or more annually in a handful of states, according to the Tax Foundation. 

And with a top federal income tax rate of 37%, it’s no wonder high-income adults look for ways to lower their tax bills. After all, one way to grow your wealth is to reduce the amount of wealth you have to hand over to Uncle Sam.

To do that, wealthy families can enlist the aid of a good accountant who can help navigate tax laws to their advantage. They also can be smart about where they choose to live. That’s right – you can pay less in taxes simply by choosing the right city and state to call home.

In a new study, GOBankingRates sought to find places that are more tax-friendly for wealthy families. It analyzed 499 U.S. cities with populations greater than 75,000 using eight criteria:

• Top marginal state income tax rate
• Total state and local taxes as a share of family incomes for the top 5%
• Total state and local taxes as a share of family incomes for the top 1%
• Typical home value for top tier homes.
• Percentage of households earning $150,000 or more
• Violent crime and property crime rates per 1,000 residents
• School district quality

The cities were then ranked, with No. 20 being a good option for wealthy families and No. 1 being the best.

GOBankingRates found that a majority of the most tax-friendly cities are in states that don’t have a state income tax. What makes them appealing to families are their low crime rates and good schools.

• Population: 131,288
• Tax rate: 0.00%
• Total state and local taxes for top 5% of families: 22.32%
• Total state and local taxes for top 1% of families: 25.83%
• Median price for a top-tier home: $529,983
• Percentage of households earning $150,000 or more: 21.2%
• Violent crime rate per 1,000 residents: 1.64
• Property crime rate per 1,000 residents: 14.56
• School district grade: B+

• Population: 149,013
• Tax rate: 4.95%
• Total state and local taxes for top 5% of families: 22.81%
• Total state and local taxes for top 1% of families: 26.35%
• Median price for a top-tier home: $658,917
• Percentage of households earning $150,000 or more: 45.2%
• Violent crime rate per 1,000 residents: 0.61
• Property crime rate per 1,000 residents: 3.20
• School district grade: A+

• Population: 130,765
• Tax rate: 0.00%
• Total state and local taxes for top 5% of families: 22.32%
• Total state and local taxes for top 1% of families: 25.83%
• Median price for a top-tier home: $425,835
• Percentage of households earning $150,000 or more: 24.4%
• Violent crime rate per 1,000 residents: 4.56
• Property crime rate per 1,000 residents: 17.28
• School district grade: C

• Population: 262,249
• Tax rate: 2.50%
• Total state and local taxes for top 5% of families: 21.38%
• Total state and local taxes for top 1% of families: 25.22%
• Median price for a top-tier home: $720,981
• Percentage of households earning $150,000 or more: 29.1%
• Violent crime rate per 1,000 residents: 1.19
• Property crime rate per 1,000 residents: 10.71
• School district grade: A

• Population: 86,912
• Tax rate: 4.25%
• Total state and local taxes for top 5% of families: 20.92%
• Total state and local taxes for top 1% of families: 25.01%
• Median price for a top-tier home: $538,569
• Percentage of households earning $150,000 or more: 32.2%
• Violent crime rate per 1,000 residents: 1.21
• Property crime rate per 1,000 residents: 10.19
• School district grade: A+

• Population: 189,258
• Tax rate: 0.00%
• Total state and local taxes for top 5% of families: 20.16%
• Total state and local taxes for top 1% of families: 22.99%
• Median price for a top-tier home: $452,314
• Percentage of households earning $150,000 or more: 11.9%
• Violent crime rate per 1,000 residents: 5.25
• Property crime rate per 1,000 residents: 28.21
• School district grade: A-

• Population: 82,068
• Tax rate: 5.75%
• Total state and local taxes for top 5% of families: 21.34%
• Total state and local taxes for top 1% of families: 25.06%
• Median price for a top-tier home: $856,239
• Percentage of households earning $150,000 or more: 44.8%
• Violent crime rate per 1,000 residents: 0.35
• Property crime rate per 1,000 residents: 4.58
• School district grade: A-

• Population: 75,990
• Tax rate: 4.25%
• Total state and local taxes for top 5% of families: 20.92%
• Total state and local taxes for top 1% of families: 20.01%
• Median price for a top-tier home: $524,442
• Percentage of households earning $150,000 or more: 31.4%
• Violent crime rate per 1,000 residents: 0.67
• Property crime rate per 1,000 residents: 5.55
• School district grade: A+

• Population: 93,522
• Tax rate: 4.75%
• Total state and local taxes for top 5% of families: 19.43%
• Total state and local taxes for top 1% of families: 23.68%
• Median price for a top-tier home: $503,370
• Percentage of households earning $150,000 or more: 26.9%
• Violent crime rate per 1,000 residents: 1.42
• Property crime rate per 1,000 residents:15.22
• School district grade: A+

• Population: 282,181
• Tax rate: 0.00%
• Total state and local taxes for top 5% of families: 22.32%
• Total state and local taxes for top 1% of families: 25.83%
• Median price for a top-tier home: $673,863
• Percentage of households earning $150,000 or more: 30.1%
• Violent crime rate per 1,000 residents: 1.61
• Property crime rate per 1,000 residents: 16.69
• School district grade: A+

• Population: 81,531
• Tax rate: 0.00%
• Total state and local taxes for top 5% of families: 21.25%
• Total state and local taxes for top 1% of families: 25.12%
• Median price for a top-tier home: $1,256,520
• Percentage of households earning $150,000 or more: 30.6%
• Violent crime rate per 1,000 residents: 1.7
• Property crime rate per 1,000 residents: 7.87
• School district grade: A

• Population: 189,349
• Tax rate: 0.00%
• Total state and local taxes for top 5% of families: 22.32%
• Total state and local taxes for top 1% of families: 25.83%
• Median price for a top-tier home: $667,380
• Percentage of households earning $150,000 or more: 32.0%
• Violent crime rate per 1,000 residents: 1.37
• Property crime rate per 1,000 residents: 9.54
• School district grade: A

• Population: 122,609
• Tax rate: 0.00%
• Total state and local taxes for top 5% of families: 22.32%
• Total state and local taxes for top 1% of families: 25.83%
• Median price for a top-tier home: $458,510
• Percentage of households earning $150,000 or more: 31.3%
• Violent crime rate per 1,000 residents: 1.08
• Property crime rate per 1,000 residents: 14.6
• School district grade: B-

• Population: 111,847
• Tax rate: 0.00%
• Total state and local taxes for top 5% of families: 22.32%
• Total state and local taxes for top 1% of families: 25.83%
• Median price for a top-tier home: $470,426
• Percentage of households earning $150,000 or more: 31.5%
• Violent crime rate per 1,000 residents: 0.80
• Property crime rate per 1,000 residents: 10.56
• School district grade: A

• Population: 102,778
• Tax rate: 0.00%
• Total state and local taxes for top 5% of families: 22.32%
• Total state and local taxes for top 1% of families: 25.83%
• Median price for a top-tier home: $706,868
• Percentage of households earning $150,000 or more: 37.0%
• Violent crime rate per 1,000 residents: 1.04
• Property crime rate per 1,000 residents: 9.22
• School district grade: A+

• Population: 193,140
• Tax rate: 0.00%
• Total state and local taxes for top 5% of families: 22.32%
• Total state and local taxes for top 1% of families: 25.83%
• Median price for a top-tier home: $839,062
• Percentage of households earning $150,000 or more: 43.4%
• Violent crime rate per 1,000 residents: 1.01
• Property crime rate per 1,000 residents: 9.55
• School district grade: A+

• Population: 97,154
• Tax rate: 3.15%
• Total state and local taxes for top 5% of families: 20.09%
• Total state and local taxes for top 1% of families: 24.55%
• Median price for a top-tier home: $556,668
• Percentage of households earning $150,000 or more: 35.8%
• Violent crime rate per 1,000 residents: 0.76
• Property crime rate per 1,000 residents: 6.59
• School district grade: A+

• Population: 110,272
• Tax rate: 0.00%
• Total state and local taxes for top 5% of families: 22.32%
• Total state and local taxes for top 1% of families: 25.83%
• Median price for a top-tier home: $621,602
• Percentage of households earning $150,000 or more: 40.8%
• Violent crime rate per 1,000 residents: 0.79
• Property crime rate per 1,000 residents: 13.68
• School district grade: A

• Population: 98,137
• Tax rate: 3.15%
• Total state and local taxes for top 5% of families: 20.09%
• Total state and local taxes for top 1% of families: 24.55%
• Median price for a top-tier home: $753,367
• Percentage of households earning $150,000 or more: 40.4%
• Violent crime rate per 1,000 residents: 0.50
• Property crime rate per 1,000 residents: 6.73
• School district grade: A+

• Population: 75,050
• Tax rate: 0.00%
• Total state and local taxes for top 5% of families: 22.32%
• Total state and local taxes for top 1% of families: 25.83%
• Median price for a top-tier home: $828,312
• Percentage of households earning $150,000 or more: 48.0%
• Violent crime rate per 1,000 residents: 0.72
• Property crime rate per 1,000 residents: 0.63
• School district grade: A

Jake Arky contributed to the reporting of this article.

GOBankingRates determined the most tax-friendly places for wealthy families by analyzing 499 U.S. cities with
greater than 75,000 population and available data along the following criteria: (1) top state marginal individual
tax rate, sourced from Tax Foundation 2023 brackets; (2) average total state and local tax rate for the top 5% of
incomes, (3) average total state and local tax rate for the top 1% of incomes as sourced from 2020 Internal
Revenue Services data; (4) percentage of households earning $150,000 or more, sourced from the Census
Bureau’s 2021 American Community Survey; and (5) typical home value for top tier homes, sourced from Zillow’s
February 2023 index. According to Zillow, top-tier homes are homes that fall into the top third of home values
within a given region. Each factor was scored, summed up (with factor (5) being weighted double and factor (1)
weighted 1.5x) and then ranked. Once a top 50 was identified, GOBankingRates then added the factors: (6)
violent and (7) property crime rate per 1,000 residents, sourced from Neighborhood Scout; and (8) school district
quality, sourced from Niche.com’s school district grading system. The top 50 places then had all eight factors
scored, summed up (with factor (5) being weighted double and factor (1) weighted 1.5x) and ranked into a top
20. All data was collected on and up to date as of March 29, 2023