With taxes, families weigh what they pay and receive

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Chef Jessica Raia-Long is grateful she lives in Florida, where taxes are generally low and state income taxes are nonexistent.

She knows what life is like elsewhere in America.

"Originally I was a Connecticut girl, born in Hartford. But my family didn't stay there. The taxes were just outrageous. I don't think we could afford it today," said Raia-Long, 39, who has lived in Tampa since 2001.

A thousand miles to the north, along the Chesapeake Bay in Maryland, work-at-home medical transcriptionist Holly Zegalia also thinks about taxes.

"If we could sell our house, we'd move out of Maryland. It's outrageous what we are paying," Zegalia said of her $2,440 property levy in the rural community of St. Leonard, on the bay's western shore. "We've been living in this house almost nine years. And in the 10 years that it's been built -- we bought it right after it was built -- the property taxes on this house have more than doubled."

The two women -- both married, each with two children and a mortgage -- were invited to speak about the taxes they pay.

Raia-Long recently sold the restaurant she operated for many years to run an upscale catering service out of a rented kitchen at a Franciscan convent nearby. She is considering moving with her husband, Michael Long, 38, employed at the Medtronic medical-equipment company, and their 5- and 8-year-old children. But she worries whether they can sell their home -- a four-bedroom ranch located two minutes from downtown Tampa -- or rent it at a price that will cover expenses.

Raia-Long learned firsthand about state income taxes during her student days at Auburn University, when she got a part-time job and her first paycheck in Alabama. She recalled looking at the withholding statement: "I said, 'What the heck is this?' "

Zegalia is a self-described "wife, mom, full-time medical transcriptionist, knitter, spinner and blogger" who gives online advice to other parents at IlikeItFrantic.com. She and her husband of seven years -- Steven Zegalia, a scientist at the National Oceanic and Atmospheric Administration -- are considering selling their modest two-story home. They would happily relocate their 1- and 3-year-old children to a new state.

One of the biggest differences between the two families is how much they must pay in state and local taxes.

Experts generally rate Florida as enjoying one of the nation's lowest tax burdens, while Maryland frequently ranks near the high end in state and local levies. Connecticut, which Raia-Long said she gladly left, often is rated as America's most heavily taxed state.

Both women cast critical eyes on the level of government services they get for their money.

"We're not getting back what we're putting in. Our existing roads are in disrepair," said Holly Zegalia. "Personally, I'd rather get that money and spend it the way I see fit."

Although she pays less in taxes, Raia-Long is also unhappy with government services in Florida.

"Public transportation is certainly an improvement that we need to have. My kids don't go to public school. They go to parochial schools. Should I be paying this (school) tax?" Raia-Long said. "I don't want to see our taxes go up for a lot of government services."

Both women said they have considered taxes when deciding whether to move out of state.

"We know there are other states out there that have lower tax brackets; that's why we've looked at moving," Zegalia said. "We would move to North Carolina. The rates overall down there are so much cheaper."

States with low tax rates for many years have been gaining population much faster than those with higher rates. In the last decade, Florida's population grew by nearly 18 percent while the much-more heavily taxed population in Maryland grew by 9 percent.

Of course, taxes are just one reason people move to sunny Florida. Economists have debated for many years just how much tax burdens influence population migration throughout the United States.

"Economists all agree that individuals respond to taxes. High-income millionaires are choosing to go from New York to Florida, for example," said Mark Robyn, a staff economist at the Tax Foundation in Washington, D.C. "It's ignoring some pretty common sense (to believe) that people do not think about those things."

Although there have been a few conflicting studies, scholars generally agree that taxes -- especially income taxes -- influence interstate migration. "Individuals move from states with high income taxes to states with low income taxes," Quinnipiac University economist Mark Gius concluded in a 2009 report in the Annals of Regional Science.

Raia-Long counts her blessings. She has lived in Germany, where the general tax burden -- at about 37 percent of its gross domestic product -- is at significantly higher than the United States'24 percent, according to the Organization for Economic Cooperation and Development.

"I think our taxes are probably reasonable. They're not 42 percent," Raia-Long said of what residents of several European nations pay. "I don't want to see them (taxes) ever get up there. That's frightening to me. To take a $1,000 paycheck and only get $600! Wow."

(Contact Thomas Hargrove at hargrovet(at)shns.com.)

(Distributed by Scripps Howard News Service, http://www.scrippsnews.com)