Virginia is near the top of the heap when it comes to the best places to earn a buck. The commonwealth was ranked the fourth-best state in which to make a living, way ahead of Maryland, which was ranked 29th by Money-Rates.com, a financial information website.
States were ranked by their average income, state taxes, unemployment rates and cost of living.
| Best states for making a living | |||
| Ranking | State | Adjusted average income* | |
| 1 | Illinois | $41,986.51 | |
| 2 | Washington | $41,455.73 | |
| 3 | Texas | $41,427.12 | |
| 4 | Virginia | $41,120.49 | |
| 5 | Delaware | $39,104.64 | |
| 6 | Massachusetts | $38,664.86 | |
| 7 | Georgia | $38,228.47 | |
| 8 | Tennessee | $38,038.27 | |
| 9 | Colorado | $38,020.24 | |
| 10 | Minnesota | $37,721.99 | |
| 29 | Maryland | $34,752.51 | |
| *Average income for each state after taking into account state taxes, unemployment rates and cost of living. | |||
| Source: Money-Rates.com | |||
The adjusted income for Virginia under that formula was about $41,000, compared with $34,750 in Maryland.
Illinois topped the list with an adjusted income just under $42,000. Hawaii came in last, at $22,100. The District was not included on the list.
Maryland residents actually earn slightly more than those in Virginia, but the state’s overall ranking was lowered mainly because the cost of living in Maryland is higher than Virginia’s, the analysis shows.
The average wage in Virginia is $46,360. In Maryland it’s $49,510. Both were well above the national average of $43,460.
Both states also enjoy relatively low unemployment. At a time when the national jobless rate is 8.8 percent, unemployment stands at 6.4 percent in Virginia and 7.1 percent in Maryland.
“Looking at the data, I would say that the cost of living is probably what sunk Maryland lower than Virginia,” said Richard Barrington, a personal finance expert for MoneyRates, which specializes in banking and financial information.
The difference between Maryland and Virginia may be even greater than the rankings suggest, however.
Barrington factored in only the income taxes assessed by the states in his calculations and rankings. For someone earning between $40,000 and $50,000 in Virginia, the state income tax is 5.75 percent, a full percentage point higher than Maryland’s rate of 4.75 percent for workers at that income level.
But in Maryland, cities and counties can levy their own local income tax in addition to what the state charges, meaning Maryland residents are actually paying more in income taxes than Barrington’s calculations reflect, according to Mark Robyn, an economist with the nonpartisan Tax Foundation.
Overall, Marylanders pay about 10 percent of their income for all state and local taxes – the 12th highest tax burden in the country – compared with 9.1 percent in Virginia, which had the 33rd highest tax burden, Robyn said.
“Unemployment rates [were] really kind of the genesis for this whole feature,” Barrington said. “With the employment situation what it is, there are a lot of people who could benefit from relocating. I think it’s a remarkably good quantitative proxy for, in a way, the average quality of life a worker can afford.”
