RUTHERFORD COUNTY, TN - A new national study has identified Rutherford County and the greater Nashville-Murfreesboro-Franklin area as one of the least-taxed regions in the country for middle-class families, offering good news for working households in Middle Tennessee.
The study, released by Upgraded Points, analyzed how much middle-class families—defined as two-parent households with two children—pay in combined federal and state income taxes across the U.S. The analysis used economic data from the Economic Policy Institute and the U.S. Census Bureau, factoring in regional cost-of-living figures and standard tax obligations.
According to the study, families in Rutherford County and the surrounding metro area face a total effective tax rate of just 10%, meaning a middle-class household earning a pre-tax income of $102,316 would take home $92,049 after taxes, paying $10,266 annually in federal and state income taxes.
That ranks the Nashville-Murfreesboro-Franklin Metro Statistical Area (MSA) 51st out of 54 large U.S. metros—meaning only three large metro areas in the country offer lower tax burdens for middle-class families.
Tennessee Holds Strong on Tax Friendliness
Zooming out statewide, Tennessee tied with North Dakota for the lowest effective tax rate for middle-class families nationwide, at just 9.2%. Middle-income households in Tennessee pay an estimated $8,597 in annual income taxes on a pre-tax income of $93,372, keeping nearly $85,000 in take-home pay.
The favorable tax position is largely due to Tennessee’s lack of a personal income tax, which puts it alongside other low-tax states like Texas, Florida, and South Dakota in easing the burden on families.
By comparison, the national average effective tax rate for middle-class families is 13.6%, with families paying an average of $15,522 in income taxes on a pre-tax income of around $113,800.
Other Cities Face Heavier Tax Loads
On the opposite end of the spectrum, families in high-cost metro areas like San Francisco (20.1%), San Jose (19.9%), and New York City (17.2%) face nearly double the effective tax rates seen in Rutherford County. These areas combine high state taxes with higher cost-of-living expenses, requiring much higher pre-tax incomes just to maintain a basic standard of living.
For instance, a middle-class family in San Francisco needs to earn nearly $196,000 per year pre-tax, and will pay over $39,000 in taxes annually—nearly four times the dollar amount paid by a similar family in Rutherford County.
Local Impact
For Rutherford County families, these numbers affirm what many residents have come to value about living in Middle Tennessee: a growing economy with a relatively low cost of living and favorable tax policies.
Local business owner and broadcaster Scott Walker, who manages multiple stations in Rutherford County, noted that the financial relief offered through Tennessee’s tax structure plays a key role in attracting and retaining families and small businesses.
“While the cost of living is going up everywhere, it’s encouraging to know that our region remains one of the most affordable places in the country to raise a family and run a business,” Walker said.
Methodology
The study focused on two-parent, two-child households and defined “middle class” as the minimum income needed to maintain a modest but adequate standard of living in each metro area. That figure includes housing, transportation, food, child care, health care, and other essential expenses.
The effective tax rate includes federal income taxes, state income taxes, Social Security, and Medicare payroll taxes, offering a comprehensive view of what families actually lose to taxes each year.
For Rutherford County residents, the takeaway is clear: Middle Tennessee remains one of the best places in the nation to stretch a dollar and keep more of what you earn.
To read the full study and explore how other cities compare, visit UpgradedPoints.com.
