Readers Mailbox:

Speaking Out on Tax Heavens and Hells

Knoxville Status

We noticed in the March-April issue in the “Tax Heavens and Hells” that Knoxville, TN, didn’t make your list of tax heavens. But in the chart of Living Costs comparing 100 cities, it finished first (lowest) among the cities listed. How did Knoxville do in your list of heavens and hells? Have you ever done an article on Knoxville?

Tim and Nettie Morrison Harrisburg, PA

We have not profiled Knoxville, though we have included it among roundups, most recently in the September-October 2006 issue in “Low Cost Towns With Great Home Buys.” In “America’s Best Low-Tax Retirement Towns,” Knoxville does not rank as a heaven or hell. It shows somewhat above average in taxes in some categories and below average in others.

Savings in Tennessee

I live in Lebanon, TN, and have to say we beat eight of the 10 tax heavens in your listing, primarily because Tennessee has no income tax. I lived in Clemson, SC, and there is no comparison. Your article cites the $10,000 pension exemption in South Carolina, but that’s a drop in the bucket compared to a state that has zero income tax. In our income bracket and home value, we save both on property taxes and income taxes by living in Tennessee.

Walter Wedler, Lebanon, TN

Having no state income tax doesn’t guarantee a tax heaven, as the local tax scene can make a big difference. Some Tennessee towns we surveyed did show lower-than-average tax scenes, including Crossville which ranked as a tax heaven. However, Memphis showed considerably higher-than-average taxes.