GOBankingRates

20 Most Tax-Friendly Places for Wealthy Families

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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.

Find Out: What Are the 2020-2021 Federal Tax Brackets and Tax Rates?

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, the top 1% of taxpayers paid more in income taxes than the bottom 90% combined, according to the Tax Foundation. And with a top federal income tax rate of 37%, its 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 484 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%
  • Percentage of households earning $150,000 or more
  • Typical home value for top tier homes.
  • 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.

Keep reading to see the 20 most tax-friendly cities where families can live a richer life.

Last updated: Jan. 20, 2021

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20. Miramar, Florida

  • Population: 139,468
  • Tax rate: 0%
  • Total state and local taxes for top 5% of families: 4.5%
  • Total state and local taxes for top 1% of families: 2.3%
  • Median price for a top-tier home: $476,944
  • Percentage of households earning $150,000 or more: 14%
  • Violent crime rate per 1,000 residents: 2.23
  • Property crime rate per 1,000 residents: 14.07
  • School district grade: B
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19. Pembroke Pines, Florida

  • Population: 170,072
  • Tax rate: 0%
  • Total state and local taxes for top 5% of families: 4.5%
  • Total state and local taxes for top 1% of families: 2.3%
  • Median price for a top-tier home: $459,320
  • Percentage of households earning $150,000 or more: 15%
  • Violent crime rate per 1,000 residents: 2.09
  • Property crime rate per 1,000 residents: 19.55
  • School district grade: B

Don’t Forget: All the New Numbers You Need To Know for Planning Ahead on Taxes

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18. Carrollton, Texas

  • Population: 135,834
  • Tax rate: 0%
  • Total state and local taxes for top 5% of families: 5.4%
  • Total state and local taxes for top 1% of families: 3.1%
  • Median price for a top-tier home: $389,186
  • Percentage of households earning $150,000 or more: 17.6%
  • Violent crime rate per 1,000 residents: 1.42
  • Property crime rate per 1,000 residents: 17.55
  • School district grade: B+

What Do You Do? Most Popular Things To Do With Your Tax Refund — and How To Do It Smarter

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17. Henderson, Nevada

  • Population: 300,116
  • Tax rate: 0%
  • Total state and local taxes for top 5% of families: 4.5%
  • Total state and local taxes for top 1% of families: 1.9%
  • Median price for a top-tier home: $514,257
  • Percentage of households earning $150,000 or more: 17.3%
  • Violent crime rate per 1,000 residents: 1.83
  • Property crime rate per 1,000 residents: 17.67
  • School district grade: B-

Stay Safe: How To Protect Your Tax Refund From Being Stolen

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16. Riverview, Florida

  • Population: 95,338
  • Tax rate: 0%
  • Total state and local taxes for top 5% of families: 4.5%
  • Total state and local taxes for top 1% of families: 2.3%
  • Median price for a top-tier home: $322,644
  • Percentage of households earning $150,000 or more: 13.3%
  • Violent crime rate per 1,000 residents: 1.64
  • Property crime rate per 1,000 residents: 10.65
  • School district grade: B
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15. Round Rock, Texas

  • Population: 124,434
  • Tax rate: 0%
  • Total state and local taxes for top 5% of families: 5.4%
  • Total state and local taxes for top 1% of families: 3.1%
  • Median price for a top-tier home: $441,073
  • Percentage of households earning $150,000 or more: 18.3%
  • Violent crime rate per 1,000 residents: 1.24
  • Property crime rate per 1,000 residents: 16.76
  • School district grade: A
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14. Coral Springs, Florida

  • Population: 132,568
  • Tax rate: 0%
  • Total state and local taxes for top 5% of families: 4.5%
  • Total state and local taxes for top 1% of families: 2.3%
  • Median price for a top-tier home: $489,204
  • Percentage of households earning $150,000 or more: 19.2%
  • Violent crime rate per 1,000 residents: 1.5
  • Property crime rate per 1,000 residents: 17.55
  • School district grade: A+

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13. Bellevue, Washington

  • Population: 144,403
  • Tax rate: 0%
  • Total state and local taxes for top 5% of families: 4.7%
  • Total state and local taxes for top 1% of families: 3.0%
  • Median price for a top-tier home: $1,729,123
  • Percentage of households earning $150,000 or more: 39.8%
  • Violent crime rate per 1,000 residents: 1.25
  • Property crime rate per 1,000 residents: 28.79
  • School district grade: A+
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12. Franklin, Tennessee

  • Population: 77,939
  • Tax rate: 1%
  • Total state and local taxes for top 5% of families: 4.2%
  • Total state and local taxes for top 1% of families: 2.8%
  • Median price for a top-tier home: $780,578
  • Percentage of households earning $150,000 or more: 27.6%
  • Violent crime rate per 1,000 residents: 1.66
  • Property crime rate per 1,000 residents: 11.14
  • School district grade: A
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11. Boca Raton, Florida

  • Population: 97,468
  • Tax rate: 0%
  • Total state and local taxes for top 5% of families: 4.5%
  • Total state and local taxes for top 1% of families: 2.3%
  • Median price for a top-tier home: $699,218
  • Percentage of households earning $125,000 or more: 28.7%
  • Violent crime rate per 1,000 residents: 2.07
  • Property crime rate per 1,000 residents: 23.27
  • School district grade: B+
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10. McKinney, Texas

  • Population: 182,055
  • Median household income: $87,608
  • Tax rate: 0%
  • Total state and local taxes for top 5% of families: 5.4%
  • Total state and local taxes for top 1% of families: 3.1%
  • Median price for a top-tier home: $463,233
  • Percentage of households earning $150,000 or more: 25.6%
  • Violent crime rate per 1,000 residents: 1.44
  • Property crime rate per 1,000 residents: 10.01
  • School district grade: A

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9. Kirkland, Washington

  • Population: 89,438
  • Tax rate: 0%
  • Total state and local taxes for top 5% of families: 4.7%
  • Total state and local taxes for top 1% of families: 3.0%
  • Median price for a top-tier home: $1,440,780
  • Percentage of households earning $150,000 or more: 36.3%
  • Violent crime rate per 1,000 residents: 1.06
  • Property crime rate per 1,000 residents: 20.48
  • School district grade: A+
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8. Plano, Texas

  • Population: 287,064
  • Tax rate: 0%
  • Total state and local taxes for top 5% of families: 5.4%
  • Total state and local taxes for top 1% of families: 3.1%
  • Median price for a top-tier home: $494,285
  • Percentage of households earning $150,000 or more: 27.7%
  • Violent crime rate per 1,000 residents: 1.50
  • Property crime rate per 1,000 residents: 17.06
  • School district grade: A+
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7. Pearland, Texas

  • Population: 122,078
  • Tax rate: 0%
  • Total state and local taxes for top 5% of families: 5.4%
  • Total state and local taxes for top 1% of families: 3.1%
  • Median price for a top-tier home: $357,448
  • Percentage of households earning $150,000 or more: 28%
  • Violent crime rate per 1,000 residents: 0.92
  • Property crime rate per 1,000 residents: 16.92
  • School district grade: A
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6. League City, Texas

  • Population: 103,310
  • Tax rate: 0%
  • Total state and local taxes for top 5% of families: 5.4%
  • Total state and local taxes for top 1% of families: 3.1%
  • Median price for a top-tier home: $372,787
  • Percentage of households earning $150,000 or more: 30.2%
  • Violent crime rate per 1,000 residents: 1.13
  • Property crime rate per 1,000 residents: 13.83
  • School district grade: A

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5. Allen, Texas

  • Population: 101,699
  • Tax rate: 0%
  • Total state and local taxes for top 5% of families: 5.4%
  • Total state and local taxes for top 1% of families: 3.1%
  • Median price for a top-tier home: 495,133
  • Percentage of households earning $150,000 or more: 31%
  • Violent crime rate per 1,000 residents: 0.83
  • Property crime rate per 1,000 residents: 10.93
  • School district grade: A+
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4. The Woodlands, Texas

  • Population: 113,819
  • Tax rate: 0%
  • Total state and local taxes for top 5% of families: 5.4%
  • Total state and local taxes for top 1% of families: 3.1%
  • Median price for a top-tier home: $641,349
  • Percentage of households earning $150,000 or more: 41.6%
  • Violent crime rate per 1,000 residents: 1.97
  • Property crime rate per 1,000 residents: 13.25
  • School district grade: A
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3. Sugar Land, Texas

  • Population: 118,709
  • Median household income: $108,994
  • Tax rate: 0%
  • Total state and local taxes for top 5% of families: 5.4%
  • Total state and local taxes for top 1% of families: 3.1%
  • Median price for a top-tier home: $497,905
  • Percentage of households earning $150,000 or more: 39.5%
  • Violent crime rate per 1,000 residents: 0.85
  • Property crime rate per 1,000 residents: 13.35
  • School district grade: A
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2. Frisco, Texas

  • Population: 177,020
  • Tax rate: 0%
  • Total state and local taxes for top 5% of families: 5.4%
  • Total state and local taxes for top 1% of families: 3.1%
  • Median price for a top-tier home: $610,588
  • Percentage of households earning $150,000 or more: 40.2%
  • Violent crime rate per 1,000 residents: 0.8
  • Property crime rate per 1,000 residents: 11.92
  • School district grade: A+

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1. Flower Mound, Texas

  • Population: 76,555
  • Tax rate: 0%
  • Total state and local taxes for top 5% of families: 5.4%
  • Total state and local taxes for top 1% of families: 3.1%
  • Median price for a top-tier home: $592,308
  • Percentage of households earning $150,000 or more: 45.2%
  • Violent crime rate per 1,000 residents: 0.54
  • Property crime rate per 1,000 residents: 9.22
  • School district grade: A

More From GOBankingRates

Jordan Rosenfeld contributed to the reporting for this article. 

Methodology: GOBankingRates determined the most tax-friendly places for wealthy families by analyzing 484 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 2020 brackets; (2) total state and local taxes as a share of family incomes for the top 5% of families, (3) total state and local taxes as a share of family incomes for the top 1% of families, both sourced from the Institute on Taxation and Economic Policy; (4) percentage of households earning $150,000 or more, sourced from the Census Bureau’s 2019 American Community Survey; and (5) typical home value for top tier homes, sourced from Zillow’s November 2020 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 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 ranked into a top 20. All data was collected on and up to date as of January 5, 2021.

Last updated: Jan. 20, 2021