Wyoming is the 'Wealth-Friendliest State'

http://wealth.bloomberg.com

When it comes to "wealth-friendliness," the Cowboy State is riding high.  Aided by a strong recovery out West, Wyoming has kept its top spot as America's most "wealth-friendly" state according to an exclusive annual ranking by Bloomberg Wealth Manager Magazine released today.

Bloomberg Wealth Manager is Bloomberg's monthly magazine targeting the needs of financial planners and investment advisers who counsel the affluent.  In its seventh year atop the "wealth-friendly" chart, Wyoming reigns supreme when it comes to keeping the wealth in the hands of the breadwinners, not state government.  A projected surplus of $1 billion over the next two years will likely continue the trend, Bloomberg Wealth Manager reports.

For the annual "wealth-friendliness" survey, co-author Thomas Saler compared the impact of state taxes on salary, real estate, personal property, and retirement assets for four hypothetical families.  The editors ran exhaustive research on tax codes and effects in each state.  The results vividly demonstrate how tax bite can vary from state to state -- and how each state's burden can change depending on the nature of one's assets.  For example, the identical set of financial parameters that generated a tax bill of $7,259 last year in tax-friendly Wyoming could have cost a family $56,419 in tax-hell Rhode Island.

In addition, the states' rankings were compared to the ranking the state received in 2000.  Of note, Hawaii, ranked No. 39 in 2000, moved up to number 14 this year.  New Hampshire, thanks in part to no sales or income taxes, moved from 27th in 2000 to 12th in this year's ranking.  And "Taxachusetts?" No longer.  Massachusetts ranks 25th, more wealth-friendly than half the states in the nation, up from 35th four years ago.

State tax revenues are finally rising again across the country, with recent reports showing an increase in state tax revenue of over 8 percent for the first three months of 2004 from a year earlier.  Even with a renewed positive outlook for states, Bloomberg Wealth Manager warns revenue gaps will more than likely lead to tax hikes as states try to compensate for the estimated $35.6 billion in budget gaps predicted for fiscal 2005.  "State legislators still have to deal with long-term fiscal problems … as well as a steady decline in sales tax receipts as the economy shifts to selling more (often untaxed) services rather than (taxable) manufactured goods," says Janet Bamford, who co-authored the report for Bloomberg Wealth Manager.

Overall "Wealth Friendly" Ranking and Grade of All 50 States and District of Columbia

*indicates tie