Writer: Lynn Cadet
Editor: Ashley Fricker
Reviewer: Adam West
We deploy a step-by-step methodology to each piece of research we publish to ensure our studies offer complete coverage and meet our rigorous editorial standards.
Key Takeaways
- Kansas City, Missouri, ranks first among large U.S. cities, where affordable housing, low taxes, and economic stability help middle-class families keep more of what they earn.
- While some top-ranked cities didn’t report the highest earning potential, they offered greater financial stability due to low taxes, affordable housing, and low unemployment rates.
- High income was a lesser indicator of financial health, as reflected in the bottom rankings. New York City, Los Angeles, and San Diego — all top earners — ranked last.
In the era of stagnant wages and rising costs, middle-class Americans facing financial strain are asking: Where can their earnings build them the best financial life?
It’s no secret that income and cost of living vary across the U.S. While the median household income in California is $99,122, it’s significantly lower in Tennessee at $69,995. But where residents are financially better off isn’t entirely dependent on income; it’s also a matter of the living costs and economic factors involved.
This study ranks 37 of America’s largest cities, all U.S. cities with a population of 300,000 or more, across five financial dimensions to find out where middle-class earnings go the furthest, and the results challenge some widely-held assumptions about where prosperity lives.
The City That Pays Less But Keeps More
Our findings show that middle-class families living in Kansas City retain significantly more of their income than those who live in New York City, and the numbers show exactly why.
A New Yorker earning $80K faces a 33.9% rent-to-income ratio and a 24.95% effective tax rate. A Kansas City resident earning $69K faces 14.63% and 12.82%. That $11,000 income gap disappears quickly — and then some.
How We Measured Financial Well-Being
To determine where middle-class earnings go the furthest, we evaluated 37 major U.S. cities across these five scoring dimensions:
- Earning Power: This section highlights the per capita personal income and median household income.
- Cost of Living: This section reflects a city’s median gross rent and regional price parity.
- Economic Stability: This section measures a city’s unemployment rate and year-over-year employment change.
- Housing Affordability: This section tracks a city’s rent-to-income ratio and median owner costs as a percentage of its income.
- Tax Burden: This section highlights a city’s effective tax rate and sales tax rate.
Together, these factors paint a complete picture of what middle-class families actually experience financially, considering not just what they make, but what they’re left with.
Large Cities With the Most Spending Power
What the Data Tells Us
Our data reveals clear patterns among the top and bottom performers for middle-class spending power. Here are the top findings:
- Housing costs separate top and bottom-performing cities more than taxes and raw income, suggesting the impact of housing affordability on Americans’ earnings.
- The winners are clustered not only in points but also in regional location. The top 5 cities sit within 3 points of each other and are located in the Midwest/South, pointing to a sweet spot for middle earners.
- The bottom-ranked cities are more spread out in their scores, showing that some cities have much worse economic conditions than others for middle-class Americans.
- High income doesn’t mean better financial standing. NYC ($217K per capita) and San Jose ($157K) rank in the bottom five, while Kansas City ($60K) ranks first.
| Rank | City | State | Total Score | Earning Power | Cost of Living | Economic Stability | Housing Affordability | Tax Burden | Per Capita Personal Income | Median Household Income | Regional Price Parity (Overall) | Median Gross Rent | Unemployment Rate | Employment YoY Change (%) | Rent-to-Income Ratio | Median Owner Costs as % of Income | Effective Tax Rate | City Sales Tax Rate (Combined) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Kansas City | MO | 64.41 | 20.57 | 75.37 | 80.96 | 75.53 | 69.54 | $60,129.00 | $69,166.00 | 92.543 | $1,238.00 | 3.70% | 2.16% | 14.63% | 20.30% | 12.82% | – |
| 2 | Oklahoma City | OK | 64 | 22.96 | 80.58 | 75.56 | 74.21 | 60.36 | $76,758.00 | $68,656.00 | 90.408 | $1,130.00 | 3.80% | 0.05% | 15.08% | 20.30% | 14.95% | 4.50% |
| 3 | Louisville | KY | 63.49 | 21.47 | 76.59 | 82.44 | 73.1 | 61.56 | $70,646.00 | $66,849.00 | 93.074 | $1,120.00 | 3.30% | 1.44% | 15.80% | 19.50% | 13.67% | 6% |
| 4 | Indianapolis | IN | 62.79 | 21.95 | 71.87 | 86.64 | 73.25 | 61.26 | $75,002.00 | $66,219.00 | 95.696 | $1,156.00 | 2.80% | 1.62% | 15.97% | 19% | 13.09% | 7% |
| 5 | Albuquerque | NM | 61.42 | 20.72 | 72.3 | 74.01 | 62.32 | 80.15 | $62,836.00 | $68,317.00 | 95.546 | $1,145.00 | 3.80% | -0.66% | 19.22% | 20.10% | 12.70% | 0% |
| 6 | El Paso | TX | 60.42 | 16.02 | 82.35 | 73.75 | 58.2 | 65.39 | $49,306.00 | $59,745.00 | 89.912 | $1,073.00 | 4.10% | 0.26% | 19.63% | 22.40% | 11.20% | 8.25% |
| 7 | Columbus | OH | 59.97 | 20.63 | 69.81 | 80.2 | 73.15 | 54.92 | $66,705.00 | $66,082.00 | 95.469 | $1,295.00 | 3.60% | 1.46% | 15.74% | 19.60% | 14.10% | 8% |
| 8 | Memphis | TN | 58.75 | 16.05 | 76.93 | 76.34 | 67.95 | 49.48 | $65,448.00 | $51,736.00 | 92.179 | $1,181.00 | 4.30% | 2.13% | 16.78% | 21.30% | 14.71% | 9.25% |
| 9 | San Antonio | TX | 58.35 | 19.47 | 70.48 | 79.13 | 64.97 | 56.33 | $61,160.00 | $65,056.00 | 94.716 | $1,324.00 | 3.70% | 1.32% | 17.41% | 22.20% | 13.57% | 8.25% |
| 10 | Milwaukee | WI | 58.29 | 16.31 | 71.62 | 72.16 | 73.49 | 53.45 | $62,166.00 | $54,234.00 | 96.937 | $1,059.00 | 3.50% | -2.54% | 14.50% | 22.20% | 12.60% | 10.90% |
| 11 | Tucson | AZ | 57.98 | 16.91 | 70.19 | 75.22 | 66.2 | 60.12 | $60,425.00 | $57,073.00 | 96.896 | $1,145.00 | 4.10% | 0.93% | 17.51% | 21% | 12.29% | 8.70% |
| 12 | Charlotte | NC | 56.53 | 28.5 | 61.37 | 82.03 | 67.58 | 44 | $86,098.00 | $82,068.00 | 97.348 | $1,612.00 | 3.50% | 1.95% | 18.03% | 18.70% | 17.45% | 7.25% |
| 13 | Nashville | TN | 56.45 | 29.15 | 63.39 | 89.91 | 64.51 | 34.77 | $99,647.00 | $77,371.00 | 96.338 | $1,586.00 | 2.80% | 3.10% | 18.08% | 21% | 18.24% | 9.75% |
| 14 | Austin | TX | 55.16 | 34.02 | 58.21 | 82.22 | 68.58 | 32.26 | $98,944.00 | $93,658.00 | 98.066 | $1,729.00 | 3.20% | 1% | 16.61% | 21.20% | 19.87% | 8.25% |
| 15 | Detroit | MI | 54.54 | 10.95 | 66.11 | 62.65 | 65.84 | 66.35 | $55,715.00 | $39,938.00 | 100.298 | $1,074.00 | 5.60% | 0.41% | 16.76% | 23% | 12.41% | 6% |
| 16 | Portland | OR | 53.54 | 30.12 | 48.01 | 66.43 | 61.39 | 72.5 | $78,973.00 | $90,919.00 | 105.421 | $1,655.00 | 4.90% | -0.29% | 18.59% | 22.30% | 14.70% | 0% |
| 17 | Houston | TX | 53.45 | 22.28 | 63.73 | 73.22 | 62.03 | 43.23 | $79,991.00 | $64,813.00 | 98.629 | $1,361.00 | 4.30% | 0.72% | 18.67% | 21.60% | 17% | 8.25% |
| 18 | Philadelphia | PA | 53.15 | 18.52 | 56.97 | 72.29 | 64.2 | 57.82 | $61,193.00 | $61,953.00 | 102.554 | $1,397.00 | 4.50% | 0.99% | 18.19% | 21% | 13.34% | 8% |
| 19 | Denver | CO | 53.08 | 37.47 | 44.39 | 75.55 | 64.56 | 53.51 | $119,263.00 | $94,718.00 | 105.782 | $1,831.00 | 3.90% | 0.39% | 17.89% | 21.40% | 17.78% | 2.90% |
| 20 | Baltimore | MD | 52.81 | 19.88 | 55.1 | 64.01 | 66.12 | 63.19 | $69,564.00 | $62,177.00 | 104.487 | $1,331.00 | 4.90% | -1.39% | 17.10% | 22% | 13.24% | 6% |
| 21 | Jacksonville | FL | 52.78 | 21.18 | 60.59 | 67.15 | 59.22 | 56.3 | $62,750.00 | $69,872.00 | 99.484 | $1,465.00 | 4.70% | -0.66% | 19.41% | 22.10% | 14.07% | 7.50% |
| 22 | Mesa | AZ | 52.66 | 26.57 | 51.91 | 82.5 | 59.13 | 50.5 | $72,176.00 | $82,752.00 | 103.316 | $1,620.00 | 3.50% | 2.16% | 20.14% | 20.50% | 15.06% | 8.30% |
| 23 | Phoenix | AZ | 52.6 | 26.14 | 52.57 | 82.5 | 59.76 | 48.52 | $72,176.00 | $81,332.00 | 103.316 | $1,582.00 | 3.50% | 2.16% | 20.14% | 20% | 15.06% | 9.10% |
| 24 | Fort Worth | TX | 52.56 | 25.24 | 54.19 | 79.18 | 58.81 | 50.77 | $69,936.00 | $79,507.00 | 103.09 | $1,509.00 | 3.60% | 1% | 19.38% | 22.50% | 15.03% | 8.25% |
| 25 | Chicago | IL | 51.62 | 26.29 | 54.6 | 67.27 | 63.24 | 48.3 | $79,964.00 | $77,902.00 | 103.595 | $1,440.00 | 4.60% | -0.95% | 17.82% | 22.60% | 16.97% | 6.25% |
| 26 | Las Vegas | NV | 50.63 | 23.06 | 57.74 | 73.81 | 51.05 | 49.4 | $66,952.00 | $73,877.00 | 100.215 | $1,563.00 | 5.20% | 4.10% | 21.94% | 22.70% | 15.30% | 8.38% |
| 27 | Dallas | TX | 50.34 | 24.8 | 54.83 | 76.32 | 57.96 | 39.25 | $84,975.00 | $70,518.00 | 103.09 | $1,472.00 | 3.80% | 0.39% | 19.75% | 22.30% | 18.04% | 8.25% |
| 28 | Sacramento | CA | 47.13 | 27.59 | 43.9 | 68.81 | 48.56 | 56.06 | $69,693.00 | $87,321.00 | 106.67 | $1,779.00 | 4.90% | 0.79% | 22.40% | 23.60% | 13.32% | 8.75% |
| 29 | Fresno | CA | 47.09 | 20.73 | 57.17 | 44.51 | 48.71 | 62.5 | $57,584.00 | $70,991.00 | 102.158 | $1,421.00 | 8.20% | 1.17% | 22.56% | 23.10% | 11.89% | 8.35% |
| 30 | Washington | DC | 46.76 | 40.86 | 37.4 | 49.66 | 70.08 | 39.36 | $111,185.00 | $109,870.00 | 108.884 | $1,954.00 | 6.20% | -3.41% | 16.44% | 20.40% | 19.47% | 6% |
| 31 | Seattle | WA | 45.74 | 47.83 | 32.57 | 62.26 | 62.15 | 30.89 | $128,684.00 | $123,860.00 | 111.133 | $2,030.00 | 4.90% | -2.19% | 19.10% | 20.50% | 18.73% | 10.55% |
| 32 | Boston | MA | 44.49 | 36.76 | 35.01 | 66.16 | 52.84 | 40.95 | $109,447.00 | $97,344.00 | 108.266 | $2,147.00 | 4.60% | -1.46% | 21.93% | 21.30% | 18.89% | 6.25% |
| 33 | San Jose | CA | 44.21 | 59.18 | 22.57 | 76 | 51.96 | 25.39 | $157,620.00 | $146,427.00 | 110.423 | $2,669.00 | 4% | 0.94% | 21.41% | 23.20% | 20.93% | 9.38% |
| 34 | San Francisco | CA | 41.21 | 59.64 | 17.82 | 76.9 | 45.32 | 22.27 | $171,497.00 | $140,970.00 | 115.613 | $2,476.00 | 3.80% | 0.66% | 23.29% | 24.10% | 22.24% | 8.63% |
| 35 | San Diego | CA | 40.13 | 36.19 | 26.47 | 73.92 | 32.24 | 49.47 | $84,312.00 | $108,077.00 | 111.887 | $2,313.00 | 4.40% | 1.38% | 27.53% | 24.60% | 15.69% | 7.75% |
| 36 | New York | NY | 36.06 | 48.13 | 33.97 | 70.88 | 10.52 | 23.4 | $217,075.00 | $80,483.00 | 112.563 | $1,821.00 | 4.90% | 1.73% | 33.90% | 27% | 24.95% | 4% |
| 37 | Los Angeles | CA | 34.83 | 28.12 | 30.46 | 64.53 | 22.3 | 39.52 | $83,888.00 | $81,939.00 | 113.566 | $1,933.00 | 5.50% | 0.92% | 29.28% | 28.40% | 16.99% | 9.75% |
The Cities Where Middle-Class Money Goes Furthest
The cities where middle-class families fare the best all share these traits: rent under 20% of income, taxes below 15%, and unemployment below 4%. While these cities don’t have the highest earning power in the nation, their lower living costs and economic stability help create a financial environment with fewer pressures.
1. Kansas City, MO
Kansas City, Missouri, takes first place for middle-class spending power, thanks to strong scores in economic stability and cost of living. While Kansas City has a lower earning power score, its favorable cost-of-living metrics, including a median gross rent of $1,238 and a rent-to-income ratio of just 14.63%, make it an attractive place for middle-class families.
2. Oklahoma City, OK
Oklahoma City, Oklahoma, comes in second. It ranks highly due to its strong cost of living score, supported by low median gross rent ($1,130) and a favorable rent-to-income ratio of 15.08%. However, it still has room to improve in earning power, with a median household income of $68,656 and a per capita personal income of $76,758 — a bit more modest than other cities.
3. Louisville, KY
Louisville, Kentucky, ranks third overall, with a solid economic stability score. The city boasts an unemployment rate of 3.3% and a year-over-year employment change of 1.44%, suggesting little economic volatility. Like its peers, Louisville falls short in earning power, scoring a 21.5, with a per capita personal income of $70,646 and a median household income of $66,849.
4. Indianapolis, IN
Indianapolis, Indiana, ranks fourth for middle-class spending power, also thanks to economic stability. The city has the lowest unemployment rate in the top five, sitting at 2.8%, and a year-over-year employment change of 1.62%. Indianapolis can improve in income potential, with a relatively weak score of 21.9, highlighted by a median household income of $66,219 and a per capita personal income of $75,002.
5. Albuquerque, NM
Albuquerque, New Mexico, rounds out the top five list with a strong cost-of-living score. Its low median gross rent of $1,145 and reasonable rent-to-income ratio of 19.22% help support its standing, reflecting low living costs and favorable economic conditions. Yet, like the cities before it, Albuquerque still has room for growth in earning power, scoring a 20.7.
The Bottom Ranking Cities
At the bottom of the list are Los Angeles, New York City, and San Diego. Middle-class Americans face challenges in these cities for different reasons.
In Los Angeles, it’s housing affordability specifically, where rent consumes nearly 30% of income. In San Diego, residents suffer from a wider cost-of-living squeeze, where median rent tops $2,300 a month. New York compounds both problems with the added weight of the country’s highest effective tax rate among the cities studied.
37. Los Angeles, CA
Los Angeles, California, ranks last for middle-class earners due to an unfavorable housing affordability score of 22.3. The city’s rent-to-income ratio is 29.98%, meaning rent alone takes a significant portion of residents’ earnings. While the city performs well in economic stability, its high living and housing costs make it a less suitable residence for middle-class families.
36. New York, NY
New York City comes in second to last due to a combination of factors. Low scores in cost of living and housing affordability weaken its position as a favorable location for middle-class Americans. Despite a strong economic stability score of 70.9, an effective tax rate of 24.95%, and a rent-to-income ratio of 33.9%, middle-class earnings are further strained, making it difficult for residents to thrive financially.
35. San Diego, CA
San Diego, California, ranks 35th overall with a particularly low cost-of-living score of 26.5. Its low ranking is highlighted by a median gross rent of $2,313 and a rent-to-income ratio of 27.53%, indicating affordability concerns in the area. A strong score in economic stability does little to offset the city’s financial pressures, making San Diego less attractive for middle-class earners.
What This Means for Middle-Class America
Domestic migration within the U.S. is currently experiencing a sustained shift toward the Sun Belt and Midwest cities, and it’s not difficult to see why these places are becoming hotbeds for relocation.
Middle-class Americans are in search of financial stability. And the cities with favorable living costs, housing affordability, and economic conditions regarding earnings are the ones attracting middle-class families in growing numbers.
Methodology
The methodology below explains the data inputs, scoring approach, and weighted metric framework used for this ranking.
Overview
This study evaluates where middle-class earnings stretch the furthest across 37 major U.S. cities, using economic indicators that reflect both earning potential and living costs across five dimensions: income, cost of living, economic stability, housing affordability, and tax burden. Cities were selected based on U.S. Census Bureau data and represent all U.S. cities with a population of 300,000 or more. Future editions will expand the analysis to midsize and smaller cities.
Data & Sources
Data for this study were sourced from reputable national organizations, including the Bureau of Economic Analysis, U.S. Census Bureau, Bureau of Labor Statistics, HUD Housing Data, IRS Statistics of Income, and official state tax authority sources. Each source was selected for its reliability and relevance to the metrics being analyzed. The data collected offers a robust foundation for understanding the economic conditions affecting middle-class households in urban settings.
Scoring Approach
The scoring approach assigns points to each city across five sections: Earning Power, Cost of Living, Economic Stability, Housing Affordability, and Tax Burden. Metrics are normalized on a 0–100 scale, and final scores are weighted averages of each section’s component metrics. Cost of Living carries the most weight (30 pts) because rent and price levels are the most immediate financial pressure households face. Earning Power and Housing Affordability are weighted equally (20 pts each) since income and housing costs are the two dominant drivers of financial stability. Economic Stability and Tax Burden (15 pts each) are weighted lower as they tend to change more slowly and have a less acute effect on monthly cash flow.
Caveats
While this study aims to provide a comprehensive analysis, certain limitations must be acknowledged. The data is subject to the accuracy and timeliness of the sources, which may vary by region and metric. Additionally, the study does not account for qualitative factors such as lifestyle preferences or cultural amenities that may influence a family’s decision to live in a particular city. The findings should be interpreted as a guide rather than an exhaustive assessment, recognizing that individual experiences may differ based on personal circumstances.
Cities Evaluated: 37
Sources Used: 6
Scoring Process
Each selected metric is pulled for all eligible cities and transformed to a standardized 0-100 scale. Directionality is applied per metric (higher-is-better or lower-is-better). Optional divide-by metrics are computed as ratio values before normalization. Section scores are calculated as weighted averages of their component metrics. Final scores are computed as weighted averages of section scores using section point allocations.
Data Sources: Bureau of Economic Analysis, U.S. Census Bureau, Bureau of Labor Statistics, HUD Housing Data, IRS Statistics of Income, Official state tax authority sources (state-by-state)
Section and Metric Weights
To determine where middle-class earnings go the furthest, we evaluated 37 major U.S. cities across these five scoring dimensions:
Earning Power (20 pts · 2 metrics)
The Earning Power section assesses the financial capacity of households in each city, focusing on income levels that impact the overall economic well-being of middle-class families. This section includes metrics such as Per Capita Personal Income and Median Household Income, which provide insights into the average earnings and economic conditions faced by residents. By analyzing these metrics, the study aims to highlight cities where residents can expect to earn a reasonable income relative to their living costs, thereby indicating greater economic opportunities for families.
Per Capita Personal Income
Per Capita Personal Income measures the average income earned per person in a given area, providing insight into the economic well-being of individuals. This metric is crucial for understanding earning potential in different cities, as it reflects the financial resources available to residents. A higher per capita income indicates greater economic opportunities and can influence migration patterns and local investments. The raw transformation means that the metric is interpreted directly, allowing for straightforward comparisons across cities, where higher values signify better earning power.
Median Household Income
Median Household Income represents the middle income value of households in a specific area, adjusted for inflation, and serves as a key indicator of economic health and living standards. This metric is particularly relevant to this study as it highlights the financial stability of families, which directly impacts their quality of life and spending power. The raw transformation allows for direct comparisons, with higher median incomes suggesting a more prosperous environment for families, thereby influencing decisions on relocation and investment in these cities.
Cost of Living (30 pts · 2 metrics)
The Cost of Living section evaluates the affordability of living in each city, focusing on the expenses that middle-class families typically incur. This section incorporates metrics such as Regional Price Parity and Median Gross Rent, which together provide a comprehensive view of living costs. By examining these metrics, the study aims to identify cities where living expenses are manageable relative to income levels, thus allowing families to maintain a comfortable lifestyle without excessive financial strain.
Regional Price Parity (Overall)
Regional Price Parity (Overall) measures the relative price levels of goods and services in a city compared to the national average, with a baseline of 100. This metric is significant as it indicates how far a dollar can stretch in different locations, directly impacting the purchasing power of residents. In this study, a lower Regional Price Parity score is favorable, as it suggests that living costs are more affordable, allowing middle-class families to allocate their income more effectively. The metric is used in its raw form, where lower values contribute positively to the overall score.
Median Gross Rent
Median Gross Rent reflects the median amount that renters pay for housing, providing a clear indicator of housing affordability in a city. This metric is crucial for middle-class families, as housing costs often represent the largest portion of their monthly expenses. A lower median rent suggests that families can find affordable housing options, which is essential for financial stability. In this study, the metric is scored in its raw form, with lower values contributing positively to the overall score, thereby highlighting cities where housing is more accessible.
Economic Stability (15 pts · 2 metrics)
The Economic Stability section examines the resilience of the labor market in each city, focusing on employment metrics that reflect job security and economic health. This section includes metrics such as the Unemployment Rate and Employment Year-over-Year Change Percentage, which provide insights into the stability of job opportunities for middle-class families. By analyzing these metrics, the study aims to identify cities where residents are more likely to have stable employment, which is a critical factor in determining the overall economic environment.
Unemployment Rate
The Unemployment Rate measures the percentage of the labor force that is actively seeking work but unable to find employment. This metric is vital as it indicates the health of the job market in a city, with lower unemployment rates suggesting a more robust economy and greater job availability. In the context of this study, a lower unemployment rate is favorable, as it implies that middle-class families have better access to stable employment opportunities. This metric is used in its raw form, where lower values contribute positively to the overall score.
Employment YoY Change (%)
Employment YoY Change (%) measures the percentage change in the number of employed persons compared to the same month in the previous year, reflecting the job market’s health and stability. This metric is vital for assessing economic resilience in different cities, as employment growth can indicate a thriving economy and attract new residents. The raw transformation allows for straightforward interpretation, where a higher percentage signifies a stronger job market, thus enhancing the attractiveness of a city for potential movers and investors.
Housing Affordability (20 pts · 2 metrics)
The Housing Affordability section evaluates the financial burden of housing costs on middle-class families, focusing on metrics that quantify housing expenses relative to income. This section includes the Rent-to-Income Ratio and Median Owner Costs as a Percentage of Income, which together provide a comprehensive view of how affordable housing is in each city. By examining these metrics, the study aims to identify cities where families can secure housing without overextending their budgets, which is crucial for long-term financial stability.
Rent-to-Income Ratio
The Rent-to-Income Ratio measures the percentage of area median income that is spent on rent for a two-bedroom unit. This metric is essential as it highlights the affordability of rental housing for middle-class families, with lower ratios indicating that families are spending a smaller portion of their income on housing. A lower Rent-to-Income Ratio is favorable, as it suggests that families can allocate more of their income towards savings and other essential expenses. This metric is used in its raw form, where lower values contribute positively to the overall score.
Median Owner Costs as % of Income
Median Owner Costs as a Percentage of Income measures the median monthly costs for homeowners (including mortgage payments) as a percentage of household income. This metric is crucial for understanding the financial burden of homeownership on middle-class families. A lower percentage indicates that families are spending a smaller share of their income on housing costs, which is beneficial for financial health and stability. In this study, this metric is also scored in its raw form, with lower values leading to better rankings, thereby emphasizing cities where homeownership is more attainable.
Tax Burden (15 pts · 2 metrics)
The Tax Burden section assesses the financial impact of taxation on middle-class families, focusing on metrics that quantify tax obligations relative to income. This section includes the Effective Tax Rate and City Sales Tax Rate, which together provide insights into the overall tax landscape in each city. By analyzing these metrics, the study aims to identify cities where families can retain a larger portion of their earnings, thus enhancing their financial well-being and disposable income.
Effective Tax Rate
The Effective Tax Rate measures the average tax paid as a percentage of Adjusted Gross Income (AGI). This metric is significant as it reflects the overall tax burden on residents, with lower rates indicating that families retain more of their income. In the context of this study, a lower effective tax rate is favorable, as it suggests that middle-class families have more disposable income to spend on necessities and savings. This metric is used in its raw form, where lower values contribute positively to the overall score.
City Sales Tax Rate (Combined)
The City Sales Tax Rate (Combined) reflects the total state and local sales tax rate applicable to purchases made in the city. This metric is important as it indicates the additional costs families face when making everyday purchases. A lower combined sales tax rate is favorable, as it allows families to keep more of their earnings for discretionary spending. In this study, this metric is scored in its raw form, with lower values contributing positively to the overall score, thereby highlighting cities with a more favorable tax environment for middle-class households.
Notes: Values are normalized comparatively within this specific study configuration and city set. Changing metrics, weights, section points, filters, tags, or divide-by choices changes the final rankings. Within the Economic Stability section, the Unemployment Rate is weighted at 2× while Employment Year-over-Year Change is weighted at 0.5×. This reflects the distinction between a current condition and a directional trend. A city’s unemployment rate tells you what the job market looks like today; YoY employment change tells you which direction it’s moving. Both matter, but for middle-class families evaluating financial stability, the present state of the labor market is a more reliable signal than short-term growth fluctuations, which can be volatile and influenced by seasonal or one-time factors.
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