15 ms·

Most Texans pay more in taxes than Californians, data suggests

152 points by cwwc 4y ago

asciimov 4y ago
- DontchaKnowit 4y ago
  Could you expand on the women's rights issues? Are you referring to abortion law or is there more? Not familiar with these particular issues in Texas.
  - fancy_pantser 4y ago
    That's a big one, there are also wage/employment and medical coverage issues. Housing and personal safety are complex but important issues as well. The National Women's Law Center has a nice landing page with a rundown: https://nwlc.org/state/texas/ https://nwlc.org/state/texas/ Texas Women's Foundation has some resources, including research/grants and advocacy: https://txwf.org https://txwf.org To see a complete picture of the US that offers to contextualize each state's position, here's "The Best and Worst States to Be a Woman" research from 2020: https://giwps.georgetown.edu/wp-content/uploads/2020/10/The-Best-and-Worst-States-to-Be-a-Woman.pdf https://giwps.georgetown.edu/wp-content/uploads/2020/10/The-...
    - spoils19 4y ago
      That research seems heavily biased. I've talked to many women from many states and the majority opinion is that they'd rather the freedom and liberties in Texas (and similar states) than being regulated to no end in other states.
      - asciimov 4y ago
        Most of the women I know, regardless of political party, are very upset with all the regulations involving their reproductive health.
gigatexal 4y ago
Oh this is hilarious
- CatWChainsaw 4y ago
  And also not unexpected, imo.
- gigatexal 4y ago
  This confirms my rule-of-thumb: Red states are bad for poor folks. Blue states are better for poor folks. “ Texans in the bottom 20 percent of income earners — those earning less than $20,900 — pay 13 percent of their income in state and local taxes, while those in the top 1 percent of income earners — those earning $617,900 or more — pay only 3.1 percent. In California, the bottom 20 percent of income earners — those earning less than $23,200 — pay 10.5 percent in state and local taxes, while the top 1 percent — those earning $714,400 or more — pay 12.4 percent.”
  - Ferrotin 4y ago
    This doesn’t account for California’s regulatory impoverishment. Housing is cheaper in Texas.
    - deleted 4y ago
      [deleted]
    - bogota 4y ago
      Way cheaper but the taxes on it are also high
      - larsiusprime 4y ago
        Housing is cheaper (to buy) because the taxes on it are high
        Ferrotin 4y ago
lotsofpulp 4y ago
Source: https://itep.org/whopays/ https://itep.org/whopays/ Edit: The report does not include tolls, but I would incorporate tolls into taxes also, especially for lower income groups. One can easily spend $1k to $2k per year in tolls in the Northeast, and I know Texas is quite heavily tolled in some areas as well. Edit 2: The ITEP report also does not incorporate the effects of property tax laws in CA which give people who purchased land earlier and their descendants a much lower property tax liability (proportionally) than people who purchase land later.
- Apocryphon 4y ago
  I originally thought the cause of this would be a principle akin to how the U.S. spends more per capita on healthcare compared to countries with socialized systems, but looks like the study says the reason is regressive tax systems focused on consumption (sales and excise) taxes.
  - deleted 4y ago
    [deleted]
- rconti 4y ago
  So does it just average property taxes? That would mean it underestimates the tax burden of a new homeowner in CA relative to TX, but after 8 or 10 or 15 years, overstates the property tax burden of a CA homeowner relative to TX.
  - Apocryphon 4y ago
    Prop 13 would probably keep the CA property tax burden understated.
- Aunche 4y ago
  >PROPERTY TAXES, INCLUDING BOTH TAXES ON INDIVIDUALS AND BUSINESS TAXES, ARE USUALLY SOMEWHAT REGRESSIVE. On average, poor homeowners and renters pay more of their incomes in property taxes than do any other income group They are very wrong about property taxes, which calls their entire analysis into question. Renters aren't the ones paying property tax, especially for expensive areas like SF. The savings property taxes from prop 13 absolutely does not get passed to the renters. If anything, it does the opposite because it disincentivises home sales.
ARandomerDude 4y ago
- bogota 4y ago
  This misses the point. All states tax different things at different levels. You need to look at your personal situation and finances as well as lifestyle to see what makes sense.
  - redavni 4y ago
    Actually, you are missing the point. While we are at it, taxes in Idaho are even higher. Also Idahoan bears prefer the taste of Californians too.
  - bombcar 4y ago
    And you can vary how you do things; in CA you should acquire lots of land twenty years ago, in Texas you should maximize your income and minimize your property.
    - mikeyouse 4y ago
      Or do what a ton of wealthy people do in Texas (Michael Dell most famously?) and apply for and receive asinine “agricultural” exemptions for your property taxes that slash your land tax rate by 95% for things like letting cattle occasionally graze or preserving land in the suburbs for deer hunting.
      - SketchySeaBeast 4y ago
        > preserving land in the suburbs for deer hunting Uhhh.... what?
        mikeyouse 4y ago
        Apologies, meant to include the link; https://www.thenation.com/article/archive/tax-day-farms-owned-rich-provide-massive-tax-shelter/ https://www.thenation.com/article/archive/tax-day-farms-owne... > That’s exactly what Michael Dell did with the suburban Austin ranch he uses as a second home. Periodically hunting and maintaining a “well-managed deer herd” reduced the property’s 2005 market value from $71.4 million to an agricultural value of $290,000, which saves him—and costs Texas—$1.2 million a year. > It’s all perfectly legal under Texan law. As long as property owners stick to the state guidelines, country officials have no right to deny them agricultural status. Korea’s Samsung Electronics qualified for a “wildlife management” agricultural tax exemption on fifty-four acres of land outside its semiconductor plant in the Northeast Austin by putting up a few birdhouses, eradicating ants and taking a wildlife “census,” which reduced its tax bill from $21,080 to just over $135 (a reduction of over 99.4 percent), reported the Wall Street Journal in 2007. If wildlife isn’t your thing, dedicating a few acres to Christmas trees is enough to qualify for a property tax exemption under “timber production,” which is exactly what Hewlett-Packard opted for on its corporate campus in Houston. The company saved half a million dollars in property taxes in 2004, despite the fact that it openly plans to develop that land.
emaginniss 4y ago
I feel like there's 19% of people missing in that graph. That 19% is where I fit in and I'm curious about the difference in taxation from one state to the other.
- kevinh 4y ago
  It's sourced from here: https://itep.org/whopays-map/ https://itep.org/whopays-map/ tl;dr: Top 20% pays less in taxes in TX than CA.
  - matt_heimer 4y ago
    Top 40% pay less in taxes in TX. The article's graphic averaged 3 income brackets to create the middle 60%.
outside1234 4y ago
https://web.archive.org/web/20220823190926/https://www.expressnews.com/news/local/article/Texas-taxes-California-17364793.php https://web.archive.org/web/20220823190926/https://www.expre...
- Bud 4y ago
  Not working yet. Nuclear paywall on this site, also.
  - bonestamp2 4y ago
    Here's the report it's based on at least: https://itep.org/whopays/ https://itep.org/whopays/
  - trevcanhuman 4y ago
    just disable javascript. i use badwolf[0] for quick paywalled articles. [0] https://hacktivis.me/projects/badwolf https://hacktivis.me/projects/badwolf
  - hoistbypetard 4y ago
    This archive[0] worked for me. [0](https://archive.ph/NWhr0 https://archive.ph/NWhr0)
jmugan 4y ago
Yeah, my property taxes have gone up a lot in the last few years. I live in a suburb of Austin. They lower the tax rate occasionally, but not nearly enough to offset the rise in home valuations.
- throwthroyaboat 4y ago
  I find it weird that the two are directly tied together. In my hometown, property taxes are proportional the overall market and the cities budget. E.g. during 2020 my house valuation increased 1.5x, but the property taxes barely changed (because everyones house valuation did the same thing, but the city budget didn't change).
  - jmugan 4y ago
    It seems like it should work that way.
    - evancox100 4y ago
      It does basically work this way. The change in actual dollar amount of taxes levied on you depends on: 1) change in the value of your home relative to average change in value in the taxing area, and 2) how much the taxing entity chooses to raise (or lower hahaha who am I kidding) the overall amount of taxes levied. Annual increase is limited to 8% without an election by voters to approve it. (This ignores the effect of new development, the revenue from which isn’t counted towards the 8% cap.) In other words, if your home value change is the same as average home value change, your taxes will go up 8% if the taxing entity elects the full 8% increase.
      - jmugan 4y ago
        Interesting. Good to know there is a limit. I guess my house has been going up faster than average or something.
deleted 4y ago
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duxup 4y ago
I remember a local group spreading a "study" around to local news outlets / radio programs and so on about how people in Minnesota were moving out because of the high taxes. But the information they provided didn't really provide much to indicate any sort of "why". Then if you followed the info to the actual study you found that the most frequent destination for the folks moving out of Minnesota was ... California. The point being I'm not sure how many people really move for just "taxes" and a lot more plays into it, and taxes are too complex to say "this state or that state" as it really depends on who you are and your situation(s).
- rconti 4y ago
  .. and I imagine, to the extent that people DO move because of "taxes", it's often more of a perception than a carefully calculated comparison.
  - HardlyCurious 4y ago
    There might be people who move due to taxes if they are unattached singles doing remote work, or people who aren't dependent on a job to live. But I think the vast majority move to where they can get a job that pays well ... Relative to the cost of living.
- dijonman2 4y ago
  I moved to a state without state income tax. I am +, mostly because I bought a cheap house and save more than I spend.
- rblatz 4y ago
  The ultra wealthy move to Texas to save on taxes, which gives everyone else the impression that they’ll pay less too.
idontpost 4y ago
You don't even have to be poor to be worse off in TX. Our household income is a little over $300k, and moving to Austin would raise our total tax burden compared to where we live now. It is not a low tax state.
- nostromo 4y ago
  > compared to where we live now Which is?
  - idontpost 4y ago
    A well known "high tax state" with astronomical property values (but low property taxes).
- dimitrios1 4y ago
  I imagine you own a decent home in Texas, though. Quite the issue in California.
- blantonl 4y ago
  This solely depends on what type of home you purchased in Texas. If you bought a 200K Pulte box home, you'll be WAY better off. If you bought a 1MM Toll Brothers new build, yeah, you gonna get killed in taxes in Texas
  - runako 4y ago
    OP is talking about moving to Austin, where there are no houses or condos with > 1 BR for sale at or under $250k. There are a handful of listings in the ~$300k range, where the property tax will run around $800/mo.
    - ceeplusplus 4y ago
      I find that hard to believe. A quick look at Redfin says tax on this $385k home is about $564/mo [1]. In any case, the lower tax rate in CA gets baked into the property value (hence the sky-high valuations) so you're paying for it either way. Comparing equivalent homes in NYC/Jersey City or Boston to those in Silicon Valley or LA makes it easy to see the effect property taxes have on valuations. [1] https://www.redfin.com/TX/Austin/2015-Ploverville-Ln-78728/home/31582786 https://www.redfin.com/TX/Austin/2015-Ploverville-Ln-78728/h...
nostromo 4y ago
> A recent post on Reddit's main economic forum included a 2018 graphic that shows Texans pay more taxes than Californians unless they are in the top 1 percent. Quality journalism right here.
- bonestamp2 4y ago
  Read the source report for better info: https://itep.org/whopays/ https://itep.org/whopays/
  - matt_heimer 4y ago
    The income buckets aren't the same between states but it looks like anyone making 62k (in the top 40%) is better off in Texas. That's a lot different than only the top 1% being better off in Texas. Averaging the 2nd, 3rd, and 4th 20% incoming buckets and dropping 2 other buckets from the top 20% paints an incorrect picture.
- ABeeSea 4y ago
  Low quality HN post right there.
  - ppqqrr 4y ago
    Low quality HN post right there. /s
  - guelo 4y ago
    Agree, it's pure adhominem.
    - macspoofing 4y ago
      No, not quite. OP is raising a valid issue, namely reddit is forum where anyone can post anything, so if you want to use a reddit post to support a position, you have to do a little bit of work to verify the accuracy of that information. Also, OP isn't actually saying the information is wrong because its reddit, rather he's saying it's lazy journalism - which it is.
jdhn 4y ago
From the link: >This study provides important context for those interested in state and local tax policies... It finds that nearly every state fails the basic test of tax fairness If everyone fails the test, perhaps it's not that the test takers are in the wrong, but maybe the test isn't administrated properly.
- rdtwo 4y ago
  Fairness isn’t the goal so of course it fails
deleted 4y ago
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Rebelgecko 4y ago
"Despite" or "Because"? If income tax is replaced with regressive consumption taxes, wouldn't you expect a bottom-heavier tax base?
junar 4y ago
The article mentioned a Reddit post without linking to the post, but I think I found it: https://old.reddit.com/r/economy/comments/wjkqdx/low_taxes_for_whom/ https://old.reddit.com/r/economy/comments/wjkqdx/low_taxes_f...
chizhik-pyzhik 4y ago
I was surprised to see that Washington state is actually considered the most tax-regressive state, a product of having no income tax... Washington did pass a law to impose a 7% long-term capital gains tax on earnings >250k, but it was struck down in a lawsuit and is now being appealed to the state supreme court: https://www.seattletimes.com/seattle-news/politics/washington-supreme-court-to-hear-challenge-to-new-capital-gains-tax-bypassing-court-of-appeals/ https://www.seattletimes.com/seattle-news/politics/washingto...
- influx 4y ago
  And yet we had a $15 billion tax surplus...
  - epgui 4y ago
    A tax surplus or deficit has nothing to do with whether the tax policies are regressive or progressive.
  - ch4s3 4y ago
    Well, sales taxes are in economic terms considered highly efficient. It also makes sense that in the boom in post pandemic consumption, a sales tax would deliver a surplus.
- the_cat_kittles 4y ago
  it drives me nuts and is completely at odds with the "liberal" values here
  - Apocryphon 4y ago
    Sounds like they were anti-tax Grover Norquist Chamber of Commerce types: https://www.seattletimes.com/seattle-news/politics/douglas-county-court-strikes-down-washington-states-new-capital-gains-tax/ https://www.seattletimes.com/seattle-news/politics/douglas-c... > The plaintiffs — which include owners of farmland and the Washington Farm Bureau — argued that the new law imposes among other things a tax on income. > the Opportunity for All Coalition, which has advocated against the capital gains tax, applauded the ruling You can find them in the bluest of places: https://ballotpedia.org/San_Francisco,_California,_Proposition_G,_Parcel_Tax_for_the_San_Francisco_Unified_School_District_(June_2018) https://ballotpedia.org/San_Francisco,_California,_Propositi... > The Howard Jarvis Taxpayers Association filed a lawsuit against the city and county in August 2018 stating that the commercial rent tax for childcare initiative did not receive sufficient votes. > Howard Jarvis Taxpayers Association President Jonathan Coupal said the group was prepared to sponsor an initiative to require a two-thirds supermajority vote of the people for local tax increases for specific purposes. https://www.sfchronicle.com/bayarea/article/Oakland-sued-for-certifying-education-tax-measure-13582122.php https://www.sfchronicle.com/bayarea/article/Oakland-sued-for... > A group of property owners has sued Oakland over the City Council’s certification of a tax measure that failed to reach a standard two-thirds threshold at the polls in November > The lawsuit was filed Friday in Alameda County Superior Court by half a dozen homeowners and landlords as well as the Jobs and Housing Coalition, a group that lobbies City Hall on behalf of businesses and developers.
deleted 4y ago
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sngz 4y ago
I moved from Austin,TX to CA many years ago, and everyone told me I would be crazy moving to a state with over regulation and high taxes. I told them I did the math one day when looking to purchase property, and I'd be paying more taxes in Austin than CA. I also prefer much more over regulation than lack of regulations. And this was wayyyy before the whole fiasco with the winter storm. I am so glad I moved. now if I were to start a business on the other hand, then things would be different.
- WalterBright 4y ago
  > now if I were to start a business on the other hand, then things would be different. That says it all, doesn't it! Drive out the businesses, and the tax revenue will dry up. As for the power grid, California has massive problems with it. Washington State is suing to block a natural gas pipeline to California, so California will burn filthy coal instead.
  - lotsofpulp 4y ago
    Considering the market capitalization of the businesses that have come out of California or added significant presence in California during the last 40 or 50 years, they are doing a terrible job driving out businesses and tax revenue.
    - WalterBright 4y ago
      Hows it doing in the last year? There's a current bill working through the CA legislature that will shut down small time fast food franchises.
      - lotsofpulp 4y ago
        Surely decades of producing multiple businesses leading the world in pretty much all business metrics is more indicative of business climate than 1 year. Maybe whatever laws in the past year dethroned California, but I am not willing to bet on it.
solidsnack9000 4y ago
This is probably not what it seems, because the overall cost of living (tax included) is nevertheless lower in Texas than it is in California. Sales tax is generally higher in California than in Texas so what is happening with these statistics? This is not to deny that we pay taxes in indirect ways. For example, property tax can be higher in Texas than in California, especially for older properties; and anyone who pays rent is going to pay some surplus in order to cover property tax. Say that a person rents a studio in a major Texas city for 1500 USD a month. With a Gross Rent Multiplier of 10 (probably high for Texas; low for California), that is about 180000 USD of property and it will be taxed at around 1%, or 1800 USD, per year. This suggests that about 150 USD/month of that person's rent in Texas is to cover taxes -- that's considerable! In California, a room in a house in a major city might cost 2000 USD a month; a studio might cost 3000 USD a month or more. Even if the nominal tax rate in California is the same as in Texas, for much of California's housing stock, the tax rate is based not on the current valuation but a valuation from the time of sale -- which can be many decades ago. Instead of paying 10% of their rent to cover taxes, a person in California might be paying much, much less -- 5% or even 1%. Even when they're paying 3000 USD for a studio, then, they might be paying much less property tax. However, a person in California paying 3000 USD for a studio is not better off than someone paying 1500 USD for a studio in Texas, simply because they are paying less tax. They do not have more space, more bathrooms, &c -- they are paying more for the same thing. The focus on tax policy ignores many other policy factors that overall contribute to a more manageable cost of living. Here is a web site you can use to look up Gross Rent Multipliers: https://apartmentpropertyvaluation.com/gross-rent-multiplier/city https://apartmentpropertyvaluation.com/gross-rent-multiplier... Here are the analyses that the Reddit post that the article referenced are based on: https://itep.org/whopays/california/ https://itep.org/whopays/california/ https://itep.org/whopays/texas/ https://itep.org/whopays/texas/
- wowokay 4y ago
  1500 for a studio man people are getting robbed in those dense places.
  - beeboop 4y ago
    Currently studio shopping in central Seattle area and it's $2200+ for something modern looking. $300 more for parking. This is for around 400 square feet.
ErikVandeWater 4y ago
Friendly reminder that income taxes are still an awful idea. They disincentivize making income, and income is a wonderful thing. They also make it easy for the top .1% to avoid paying taxes better than the top 10%. Progressive taxes can still be achieved, through property taxes, sales taxes on luxury goods, and taxes on excessive usage of public goods.
- memcg 4y ago
  Sales taxes on luxury goods are often easy to avoid. When I bought an engagement ring, the jeweler offered to ship an empty box to Florida in order to avoid my states sales tax.
  - lotsofpulp 4y ago
    That is not tax avoidance, that is tax evasion (former is legal, latter is illegal). Pretty much all states with sales taxes require residents to pay "sales and use tax" on items purchased out of state that have been brought into the state for the amount of sales tax that would have been paid had it been purchased within the state. https://floridarevenue.com/taxes/taxesfees/pages/sales_tax.aspx https://floridarevenue.com/taxes/taxesfees/pages/sales_tax.a... Florida used to allow online businesses not based in florida to forego collecting sales tax when shipping to florida (but it was always owed as use tax by the Florida resident recipient), but starting last year, businesses with more than $100k of online sales had to start collecting and remitting sales taxes also.
- Apocryphon 4y ago
  What are your thoughts on the land value tax
  - ErikVandeWater 4y ago
    The land value tax is a good idea, assuming there is a tax on the pollution created when building the property. Unfortunately, there usually isn't one. A property tax is kind of a substitute for that tax. There should be that tax because bigger and more luxurious properties usually cut down more trees to clear space, and usually use building materials that are pollutive/environmentally destructive than commonplace materials.
tristor 4y ago
Nearly all of this is accounted for by property taxes and is really only true in specific locales (Austin). Most of the rest of Texas the overall tax burden is lower than you'd have in other states. Property taxes represented 1.9% of my income when I lived in Texas after my house doubled in value over ten years, My effective tax rate if I lived in California would be 10% of my income to the state, and on top of that sales tax ranges from 1% less to 2.5% more than the sales tax rate I paid in Texas. The only reason this is an issue for people is because of property tax in high real estate cost locales (Austin) compared to California that has wonky property taxes due to Prop 13.
- mbesto 4y ago
  > Nearly all of this is accounted for by property taxes and is really only true in specific locales (Austin). Most of the rest of Texas the overall tax burden is lower than you'd have in other states. Is it? My understanding is that they calculate the absolute value and then reverse it back into a % of their income (also known as effective tax rate, but in this case your effective tax rate for ALL taxes, not just income tax). The way I understand the data is along the following simplified example: A person who makes $100k in CA with a 10% income tax, and a $1M valued home @ 1% tax, pays $20k in taxes each year, which is 20% of their income. A person who makes $100k in TX with a 0% income tax, and a $1M valued home @ 2.2% tax, pays $22k in taxes each year, which is 22% of their income. Texas is a regressive system because it taxes an individuals total take-home income harder even, and especially, when their wealth (most people's wealth is tied to home value) goes up. The whole state of Texas, even outside of cities, is seeing property values go up. EDIT: Fixed my math. Posted that way too quick. EDIT2: While my example illustrates the danger in property values outpacing wages, the crux of the current issue is largely due to excise taxes: https://itep.org/whopays/texas/ https://itep.org/whopays/texas/ Basically you pay an extra 6% "on all retail sales, leases and rentals of most goods, as well as taxable services" in the state of Texas: https://comptroller.texas.gov/taxes/sales//#:~:text=Texas%20imposes%20a%206.25%20percent%20state%20sales%20and,for%20a%20maximum%20combined%20rate%20of%208.25%20percent https://comptroller.texas.gov/taxes/sales//#:~:text=Texas%20....
  - umeshunni 4y ago
hahaxdxd123 4y ago
What about the massive rents that Californians have to pay due to the state's lack of housing? I would argue that since this is completely caused by State and Local governments, you can argue this is a tax levied by the state and distributed to property owners.
- AceJohnny2 4y ago
  Blame Prop 13, a proposition (law drafted by popular initiative) that was enacted in 1978 following rapidly rising property taxes, due to rising property values due to high demand. It passed with a staggering 62% of the popular vote. Prop 13 leads to perverse incentives where homeowners are disincentivized to allow developments in their area, so that they can "Preserve the Character of the Neighborhood". (Otherwise, they may want to allow development, to reduce demand and thus their property tax load) This also leads to underfunded local services, like education, which is mostly funded by local property taxes. https://en.wikipedia.org/wiki/1978_California_Proposition_13 https://en.wikipedia.org/wiki/1978_California_Proposition_13
  - pkaye 4y ago
    Only 27% of education funding in California is local property taxes. Most of it is from state income taxes or Federal government divided out based on school student count and other factors. Many states are in the 20-30% range for local property tax funding but there are a few where it is much higher like 47% for Texas and 57% for Illinois. https://ed100.org/lessons/whopays https://ed100.org/lessons/whopays
    - AceJohnny2 4y ago
      That practically proves my point though. Education is underfunded, and in California local property taxes aren't contributing much.
      - pkaye 4y ago
        But you just said education is mostly funded by local property taxes. > This also leads to underfunded local services, like education, which is mostly funded by local property taxes.
UberFly 4y ago
I'm not so sure ITEP is so unbiased. Aren't their affiliations generally left-leaning? I do know for instance that they have been openly anti-trump tax policy in the past. As squishy as these kind of numbers are, such statements as "Texans pay more in taxes than CA" should be taken with a huge grain of salt as always.
- deleted 4y ago
  [deleted]
- adgjlsfhk1 4y ago
  being against bad tax policies doesn't make you unreliable.
- kyleblarson 4y ago
  Look at the members of their board. It's obvious.
howinteresting 4y ago
- dijonman2 4y ago
  Which state is a fascist regime?
  - tootallgavin 4y ago
    - howinteresting 4y ago
  - dougmwne 4y ago
  - howinteresting 4y ago
  - timbit42 4y ago
    Depends on your political lean.
s17n 4y ago
Title should have been "due to TX lacking a state income tax, most Texans pay more in taxes than CA"
- solidsnack9000 4y ago
  It is likely that the absolute amount of taxes that people pay in Texas is less, though. As of 2021, 4123 USD per person versus 6029 USD per person in California: https://www.thecentersquare.com/california/california-residents-pay-6-029-per-capita-in-key-state-tax-levies-study-finds/article_e50483d6-4a4d-11eb-bfd8-032368ea49c2.html https://www.thecentersquare.com/california/california-reside... I worry that the ITEP study (https://itep.org/whopays/ https://itep.org/whopays/) is basically misleading because (a) it tries to present the welfare of people as depending on taxation rather than the overall cost of living and (b) it uses percentage of income rather than the absolute amount of taxation to effectively argue that people who pay more taxes -- while not necessarily receiving more from the state -- are somehow paying less.
ummonk 4y ago
[flagged]
kazinator 4y ago
This article makes some unwarranted leaps. The fact that lower income Texans pay a larger fraction of their income in tax than higher earners doesn't support the claim that " [l]ow-income taxpayers bear a disproportionate share of the tax burden in those states", since the tax burden of a group is what that group as a whole pays as a fraction of the state's tax revenue. In the absence of income tax, taxes come from sources like consumption (e.g. sales taxes) and other things like property taxes. Lower income people save less money; they spend more of their income and so will pay more of their income in consumption taxes.
- vineyardmike 4y ago
  Generally, in terms of “Fairness” people view the tax burden as who is inconvenienced most. Saying “lower income people… will pay more of their income in taxes” is saying that lower income people are more inconvenienced. Even if my income is 10x that of the “lower income” class of people, and I pay more absolute taxes, its less burdensome to me to do that, because I presumably have already secured housing, and basic food, and basic transit, and that tax money I spent is of lesser marginal value.
whatever1 4y ago
That’s bs. In Texas you pay just 1-3% property tax. That’s it. Car registration is dirt cheap (<$100/year), housing is dirt cheap (200k get you a house with a swimming pool), electricity is super cheap (when it is not snowing) and gasoline is almost half price compared to California.
- deleted 4y ago
  [deleted]
- dd36 4y ago
  There’s no such thing as a free lunch. It all comes from somewhere. Texas does a better job of obfuscating and shifts more of the burden to lower incomes.
- xienze 4y ago
  Yeah I’m really curious about the methodology here. Property tax is surely higher, but then again property values are a good bit lower. Income tax is certainly lower in TX (hard not to be). Sales tax I’d wager is lower in TX as well, at least on average. Not sure about utilities, but it’s not hard to have cheaper electricity than CA. Gas is no contest. So what’s the angle here? Things that make you go hmmm…
  - hindsightbias 4y ago
    It all rolls down the counties who have to pay for everything. So they raise your valuation 20% a year (if you're in an avg market). For the last 10 years. And then the rate goes from 1.2% to 1.9% over the same time. And that doesn't even cover highway use, as they've all got tolls now. With no Prop 13, anyone who picked the right hood as poor or middle class can no longer afford to stay.
- briandrupieski 4y ago
  1-3% property tax seems to line up with their breakdown for property tax: https://itep.org/whopays/texas/ https://itep.org/whopays/texas/ Looks like most of it comes from sales and excise taxes.
- 4y ago
munbun 4y ago
After exemptions, I pay 2% of my home’s appraised value in property taxes each year in Texas. 50% goes towards primary school + 30% goes to my local city but the money doesn’t seem to impact education outcomes or general quality of life near me. I don’t mind the distribution but it stings when local government seems to be plagued by chronic mismanagement.
- acdha 4y ago
  Regarding school performance, note that outcomes closely track the parents’ socioeconomic status. Once you’re over the level of basic staffing, safety, etc. issues this ends up reflecting more how well your community supports the poor and disabled than anything the school does.
tyingq 4y ago
Does this account for home assessed value when comparing the property taxes between CA and TX? I know the effective property tax rate is lower for CA vs TX, but the homes are much less expensive in TX.
- vineyardmike 4y ago
  Yes because people make more money in Cali, so the % of income is adjusted for.
  - tyingq 4y ago
    Some types of jobs make more money in Cali. Some don't. And I imagine many companies don't cut your salary when you move from CA to TX.
    - vineyardmike 4y ago
      Well the minimum wage in California is roughly 2x texas. That will drive up the statistics because no one would be “as poor” in California as they are are in texas.
      - tyingq 4y ago
        To some degree, yes. Though the higher minimum wages in other states have raised the starting wages for many jobs in Texas that used to pay Texas minimum. That is, many formerly $7.25/hr rate entry level jobs in Texas are now paying closer to $15/hr. Because once a few companies adopt it, others have to compete. Also, some areas have their own minimum. Austin has had a $15/hr minimum for several years, recently raised to $22.
        vineyardmike 4y ago
        Missing the point. The point was that yes house prices are accounted for in the calculations because it’s the percent of salary. So Californians pay less as a percent even though they have more expensive homes because they make more money at every income level.
matrix12 4y ago
Anyone who has owned property in Texas, and then sold it, and moved to SF, and bought a house might not concur.
jmugan 4y ago
I guess it comes down to income tax (California) vs. property tax (Texas). You have to make a minimum income to pay income tax, and many people don't cross that threshold, or if they do not by much, so "most people" pay more in Texas.
- jmugan 4y ago
  It looks like sales tax rates are about the same in both states.
akgoel 4y ago
While individuals do not have income tax, businesses do. Texas businesses are subject to property taxes, income taxes (the franchise tax), and taxes on total assets (business personal property), as well as sales taxes on services.
legitster 4y ago
> Despite TX lacking a state income tax, most Texans pay more in taxes than CA. This is pretty misleading. The report in question doesn't say whether Texans or California's actually pay more per capita - it's entirely as a percentage of the total state tax collected. https://itep.org/whopays/ https://itep.org/whopays/ (EDIT: This isn't correct, it's as percentage of income by average income in state, but the brackets are different per state). So it's because they are missing an income tax. But if someone hit you with a 50% income tax next year, you wouldn't consider your tax bill lower just because your share become proportionally smaller. With that in mind, per capita tax in California is ~$6800 and in Texas it's $4400. FWIW, I've never actually heard anyone complain about state taxes in California or consider moving because of them. The exodus to Texas has less to do with taxes and much more to do with general cost of living, which is still largely a function of state government.
- paxys 4y ago
  > The report in question doesn't say whether Texans or California's actually pay more per capita - it's entirely as a percentage of the total state tax collected The graph shows what percentage of their income people pay towards state and local taxes.
  - legitster 4y ago
    Okay, good point. But these brackets are also a bit misleading, since in the ITEP data they are relative to each state. The lowest bracket in the ITEP data for California tops out at $23k, but it's only ~$20k for Texas. Meanwhile, the middle bracket in California tops out at $62k, while Texas it's only $58k. So again, the sales tax could be the exact same in both states, but it would show up as larger percentage of budget because people in Texas are poorer on average.
    - paxys 4y ago
      Yes, but that's the point of the article. Earning $1000 and paying $500 of it towards taxes is more regressive than earning $2000 and paying $800, even though in the second case you are paying more in terms of absolute dollars.
labrador 4y ago
Californians looking to reduce their tax burden should consider Vancouver Washington. Washington has no income tax and Oregon has no sales tax. Live in Vancouver, drive over the bridge over the Columbia River to Portland to do your shopping. Lots of people take advantage of this loop hole. Just don't forget you don't pump your own gas in Oregon. Rumor has it, gas pumping is a make work program for reformed felons.
- timbit42 4y ago
  I have a relative who works and shops in New Hampshire (no income or sales taxes) but lives in Maine to avoid New Hampshire's property taxes. Their drive from home to work is 10 minutes.
  - lotsofpulp 4y ago
    They would only be legally saving sales tax on products or services bought and consumed in New Hampshire. Maine collects income tax on all income for Maine residents, regardless of where it is earned. First line in this document. https://www.maine.gov/revenue/sites/maine.gov.revenue/files/inline-files/residency_guidance_2020.pdf https://www.maine.gov/revenue/sites/maine.gov.revenue/files/... http://www.maine.gov/revenue/faq/sales-use-service-provider-tax http://www.maine.gov/revenue/faq/sales-use-service-provider-...
kurupt213 4y ago
What’s the sales tax in texas

152 points by cwwc 4y ago

asciimov 4y ago

DontchaKnowit 4y ago
Could you expand on the women's rights issues? Are you referring to abortion law or is there more? Not familiar with these particular issues in Texas.
- fancy_pantser 4y ago
  That's a big one, there are also wage/employment and medical coverage issues. Housing and personal safety are complex but important issues as well. The National Women's Law Center has a nice landing page with a rundown: https://nwlc.org/state/texas/ https://nwlc.org/state/texas/ Texas Women's Foundation has some resources, including research/grants and advocacy: https://txwf.org https://txwf.org To see a complete picture of the US that offers to contextualize each state's position, here's "The Best and Worst States to Be a Woman" research from 2020: https://giwps.georgetown.edu/wp-content/uploads/2020/10/The-Best-and-Worst-States-to-Be-a-Woman.pdf https://giwps.georgetown.edu/wp-content/uploads/2020/10/The-...
  - spoils19 4y ago
    That research seems heavily biased. I've talked to many women from many states and the majority opinion is that they'd rather the freedom and liberties in Texas (and similar states) than being regulated to no end in other states.
    - asciimov 4y ago
      Most of the women I know, regardless of political party, are very upset with all the regulations involving their reproductive health.

gigatexal 4y ago

Oh this is hilarious

CatWChainsaw 4y ago
And also not unexpected, imo.
gigatexal 4y ago
This confirms my rule-of-thumb: Red states are bad for poor folks. Blue states are better for poor folks. “ Texans in the bottom 20 percent of income earners — those earning less than $20,900 — pay 13 percent of their income in state and local taxes, while those in the top 1 percent of income earners — those earning $617,900 or more — pay only 3.1 percent. In California, the bottom 20 percent of income earners — those earning less than $23,200 — pay 10.5 percent in state and local taxes, while the top 1 percent — those earning $714,400 or more — pay 12.4 percent.”
- Ferrotin 4y ago
  This doesn’t account for California’s regulatory impoverishment. Housing is cheaper in Texas.
  - deleted 4y ago
    [deleted]
  - bogota 4y ago
    Way cheaper but the taxes on it are also high
    - larsiusprime 4y ago
      Housing is cheaper (to buy) because the taxes on it are high
      - Ferrotin 4y ago

lotsofpulp 4y ago

Source: https://itep.org/whopays/ https://itep.org/whopays/ Edit: The report does not include tolls, but I would incorporate tolls into taxes also, especially for lower income groups. One can easily spend $1k to $2k per year in tolls in the Northeast, and I know Texas is quite heavily tolled in some areas as well. Edit 2: The ITEP report also does not incorporate the effects of property tax laws in CA which give people who purchased land earlier and their descendants a much lower property tax liability (proportionally) than people who purchase land later.

Apocryphon 4y ago
I originally thought the cause of this would be a principle akin to how the U.S. spends more per capita on healthcare compared to countries with socialized systems, but looks like the study says the reason is regressive tax systems focused on consumption (sales and excise) taxes.
- deleted 4y ago
  [deleted]
rconti 4y ago
So does it just average property taxes? That would mean it underestimates the tax burden of a new homeowner in CA relative to TX, but after 8 or 10 or 15 years, overstates the property tax burden of a CA homeowner relative to TX.
- Apocryphon 4y ago
  Prop 13 would probably keep the CA property tax burden understated.
Aunche 4y ago
>PROPERTY TAXES, INCLUDING BOTH TAXES ON INDIVIDUALS AND BUSINESS TAXES, ARE USUALLY SOMEWHAT REGRESSIVE. On average, poor homeowners and renters pay more of their incomes in property taxes than do any other income group They are very wrong about property taxes, which calls their entire analysis into question. Renters aren't the ones paying property tax, especially for expensive areas like SF. The savings property taxes from prop 13 absolutely does not get passed to the renters. If anything, it does the opposite because it disincentivises home sales.

ARandomerDude 4y ago

bogota 4y ago
This misses the point. All states tax different things at different levels. You need to look at your personal situation and finances as well as lifestyle to see what makes sense.
- redavni 4y ago
  Actually, you are missing the point. While we are at it, taxes in Idaho are even higher. Also Idahoan bears prefer the taste of Californians too.
- bombcar 4y ago
  And you can vary how you do things; in CA you should acquire lots of land twenty years ago, in Texas you should maximize your income and minimize your property.
  - mikeyouse 4y ago
    Or do what a ton of wealthy people do in Texas (Michael Dell most famously?) and apply for and receive asinine “agricultural” exemptions for your property taxes that slash your land tax rate by 95% for things like letting cattle occasionally graze or preserving land in the suburbs for deer hunting.
    - SketchySeaBeast 4y ago
      > preserving land in the suburbs for deer hunting Uhhh.... what?
      - mikeyouse 4y ago
        Apologies, meant to include the link; https://www.thenation.com/article/archive/tax-day-farms-owned-rich-provide-massive-tax-shelter/ https://www.thenation.com/article/archive/tax-day-farms-owne... > That’s exactly what Michael Dell did with the suburban Austin ranch he uses as a second home. Periodically hunting and maintaining a “well-managed deer herd” reduced the property’s 2005 market value from $71.4 million to an agricultural value of $290,000, which saves him—and costs Texas—$1.2 million a year. > It’s all perfectly legal under Texan law. As long as property owners stick to the state guidelines, country officials have no right to deny them agricultural status. Korea’s Samsung Electronics qualified for a “wildlife management” agricultural tax exemption on fifty-four acres of land outside its semiconductor plant in the Northeast Austin by putting up a few birdhouses, eradicating ants and taking a wildlife “census,” which reduced its tax bill from $21,080 to just over $135 (a reduction of over 99.4 percent), reported the Wall Street Journal in 2007. If wildlife isn’t your thing, dedicating a few acres to Christmas trees is enough to qualify for a property tax exemption under “timber production,” which is exactly what Hewlett-Packard opted for on its corporate campus in Houston. The company saved half a million dollars in property taxes in 2004, despite the fact that it openly plans to develop that land.

emaginniss 4y ago

I feel like there's 19% of people missing in that graph. That 19% is where I fit in and I'm curious about the difference in taxation from one state to the other.

kevinh 4y ago
It's sourced from here: https://itep.org/whopays-map/ https://itep.org/whopays-map/ tl;dr: Top 20% pays less in taxes in TX than CA.
- matt_heimer 4y ago
  Top 40% pay less in taxes in TX. The article's graphic averaged 3 income brackets to create the middle 60%.

outside1234 4y ago

https://web.archive.org/web/20220823190926/https://www.expressnews.com/news/local/article/Texas-taxes-California-17364793.php https://web.archive.org/web/20220823190926/https://www.expre...

Bud 4y ago
Not working yet. Nuclear paywall on this site, also.
- bonestamp2 4y ago
  Here's the report it's based on at least: https://itep.org/whopays/ https://itep.org/whopays/
- trevcanhuman 4y ago
  just disable javascript. i use badwolf[0] for quick paywalled articles. [0] https://hacktivis.me/projects/badwolf https://hacktivis.me/projects/badwolf
- hoistbypetard 4y ago
  This archive[0] worked for me. [0](https://archive.ph/NWhr0 https://archive.ph/NWhr0)

jmugan 4y ago

Yeah, my property taxes have gone up a lot in the last few years. I live in a suburb of Austin. They lower the tax rate occasionally, but not nearly enough to offset the rise in home valuations.

throwthroyaboat 4y ago
I find it weird that the two are directly tied together. In my hometown, property taxes are proportional the overall market and the cities budget. E.g. during 2020 my house valuation increased 1.5x, but the property taxes barely changed (because everyones house valuation did the same thing, but the city budget didn't change).
- jmugan 4y ago
  It seems like it should work that way.
  - evancox100 4y ago
    It does basically work this way. The change in actual dollar amount of taxes levied on you depends on: 1) change in the value of your home relative to average change in value in the taxing area, and 2) how much the taxing entity chooses to raise (or lower hahaha who am I kidding) the overall amount of taxes levied. Annual increase is limited to 8% without an election by voters to approve it. (This ignores the effect of new development, the revenue from which isn’t counted towards the 8% cap.) In other words, if your home value change is the same as average home value change, your taxes will go up 8% if the taxing entity elects the full 8% increase.
    - jmugan 4y ago
      Interesting. Good to know there is a limit. I guess my house has been going up faster than average or something.

deleted 4y ago

[deleted]

duxup 4y ago

I remember a local group spreading a "study" around to local news outlets / radio programs and so on about how people in Minnesota were moving out because of the high taxes. But the information they provided didn't really provide much to indicate any sort of "why". Then if you followed the info to the actual study you found that the most frequent destination for the folks moving out of Minnesota was ... California. The point being I'm not sure how many people really move for just "taxes" and a lot more plays into it, and taxes are too complex to say "this state or that state" as it really depends on who you are and your situation(s).

rconti 4y ago
.. and I imagine, to the extent that people DO move because of "taxes", it's often more of a perception than a carefully calculated comparison.
- HardlyCurious 4y ago
  There might be people who move due to taxes if they are unattached singles doing remote work, or people who aren't dependent on a job to live. But I think the vast majority move to where they can get a job that pays well ... Relative to the cost of living.
dijonman2 4y ago
I moved to a state without state income tax. I am +, mostly because I bought a cheap house and save more than I spend.
rblatz 4y ago
The ultra wealthy move to Texas to save on taxes, which gives everyone else the impression that they’ll pay less too.

idontpost 4y ago

You don't even have to be poor to be worse off in TX. Our household income is a little over $300k, and moving to Austin would raise our total tax burden compared to where we live now. It is not a low tax state.

nostromo 4y ago
> compared to where we live now Which is?
- idontpost 4y ago
  A well known "high tax state" with astronomical property values (but low property taxes).
dimitrios1 4y ago
I imagine you own a decent home in Texas, though. Quite the issue in California.
blantonl 4y ago
This solely depends on what type of home you purchased in Texas. If you bought a 200K Pulte box home, you'll be WAY better off. If you bought a 1MM Toll Brothers new build, yeah, you gonna get killed in taxes in Texas
- runako 4y ago
  OP is talking about moving to Austin, where there are no houses or condos with > 1 BR for sale at or under $250k. There are a handful of listings in the ~$300k range, where the property tax will run around $800/mo.
  - ceeplusplus 4y ago
    I find that hard to believe. A quick look at Redfin says tax on this $385k home is about $564/mo [1]. In any case, the lower tax rate in CA gets baked into the property value (hence the sky-high valuations) so you're paying for it either way. Comparing equivalent homes in NYC/Jersey City or Boston to those in Silicon Valley or LA makes it easy to see the effect property taxes have on valuations. [1] https://www.redfin.com/TX/Austin/2015-Ploverville-Ln-78728/home/31582786 https://www.redfin.com/TX/Austin/2015-Ploverville-Ln-78728/h...

nostromo 4y ago

> A recent post on Reddit's main economic forum included a 2018 graphic that shows Texans pay more taxes than Californians unless they are in the top 1 percent. Quality journalism right here.

bonestamp2 4y ago
Read the source report for better info: https://itep.org/whopays/ https://itep.org/whopays/
- matt_heimer 4y ago
  The income buckets aren't the same between states but it looks like anyone making 62k (in the top 40%) is better off in Texas. That's a lot different than only the top 1% being better off in Texas. Averaging the 2nd, 3rd, and 4th 20% incoming buckets and dropping 2 other buckets from the top 20% paints an incorrect picture.
ABeeSea 4y ago
Low quality HN post right there.
- ppqqrr 4y ago
  Low quality HN post right there. /s
- guelo 4y ago
  Agree, it's pure adhominem.
  - macspoofing 4y ago
    No, not quite. OP is raising a valid issue, namely reddit is forum where anyone can post anything, so if you want to use a reddit post to support a position, you have to do a little bit of work to verify the accuracy of that information. Also, OP isn't actually saying the information is wrong because its reddit, rather he's saying it's lazy journalism - which it is.

jdhn 4y ago

From the link: >This study provides important context for those interested in state and local tax policies... It finds that nearly every state fails the basic test of tax fairness If everyone fails the test, perhaps it's not that the test takers are in the wrong, but maybe the test isn't administrated properly.

rdtwo 4y ago
Fairness isn’t the goal so of course it fails

deleted 4y ago

[deleted]

Rebelgecko 4y ago

"Despite" or "Because"? If income tax is replaced with regressive consumption taxes, wouldn't you expect a bottom-heavier tax base?

junar 4y ago

The article mentioned a Reddit post without linking to the post, but I think I found it: https://old.reddit.com/r/economy/comments/wjkqdx/low_taxes_for_whom/ https://old.reddit.com/r/economy/comments/wjkqdx/low_taxes_f...

chizhik-pyzhik 4y ago

I was surprised to see that Washington state is actually considered the most tax-regressive state, a product of having no income tax... Washington did pass a law to impose a 7% long-term capital gains tax on earnings >250k, but it was struck down in a lawsuit and is now being appealed to the state supreme court: https://www.seattletimes.com/seattle-news/politics/washington-supreme-court-to-hear-challenge-to-new-capital-gains-tax-bypassing-court-of-appeals/ https://www.seattletimes.com/seattle-news/politics/washingto...

influx 4y ago
And yet we had a $15 billion tax surplus...
- epgui 4y ago
  A tax surplus or deficit has nothing to do with whether the tax policies are regressive or progressive.
- ch4s3 4y ago
  Well, sales taxes are in economic terms considered highly efficient. It also makes sense that in the boom in post pandemic consumption, a sales tax would deliver a surplus.
the_cat_kittles 4y ago
it drives me nuts and is completely at odds with the "liberal" values here
- Apocryphon 4y ago
  Sounds like they were anti-tax Grover Norquist Chamber of Commerce types: https://www.seattletimes.com/seattle-news/politics/douglas-county-court-strikes-down-washington-states-new-capital-gains-tax/ https://www.seattletimes.com/seattle-news/politics/douglas-c... > The plaintiffs — which include owners of farmland and the Washington Farm Bureau — argued that the new law imposes among other things a tax on income. > the Opportunity for All Coalition, which has advocated against the capital gains tax, applauded the ruling You can find them in the bluest of places: https://ballotpedia.org/San_Francisco,_California,_Proposition_G,_Parcel_Tax_for_the_San_Francisco_Unified_School_District_(June_2018) https://ballotpedia.org/San_Francisco,_California,_Propositi... > The Howard Jarvis Taxpayers Association filed a lawsuit against the city and county in August 2018 stating that the commercial rent tax for childcare initiative did not receive sufficient votes. > Howard Jarvis Taxpayers Association President Jonathan Coupal said the group was prepared to sponsor an initiative to require a two-thirds supermajority vote of the people for local tax increases for specific purposes. https://www.sfchronicle.com/bayarea/article/Oakland-sued-for-certifying-education-tax-measure-13582122.php https://www.sfchronicle.com/bayarea/article/Oakland-sued-for... > A group of property owners has sued Oakland over the City Council’s certification of a tax measure that failed to reach a standard two-thirds threshold at the polls in November > The lawsuit was filed Friday in Alameda County Superior Court by half a dozen homeowners and landlords as well as the Jobs and Housing Coalition, a group that lobbies City Hall on behalf of businesses and developers.

deleted 4y ago

[deleted]

sngz 4y ago

I moved from Austin,TX to CA many years ago, and everyone told me I would be crazy moving to a state with over regulation and high taxes. I told them I did the math one day when looking to purchase property, and I'd be paying more taxes in Austin than CA. I also prefer much more over regulation than lack of regulations. And this was wayyyy before the whole fiasco with the winter storm. I am so glad I moved. now if I were to start a business on the other hand, then things would be different.

WalterBright 4y ago
> now if I were to start a business on the other hand, then things would be different. That says it all, doesn't it! Drive out the businesses, and the tax revenue will dry up. As for the power grid, California has massive problems with it. Washington State is suing to block a natural gas pipeline to California, so California will burn filthy coal instead.
- lotsofpulp 4y ago
  Considering the market capitalization of the businesses that have come out of California or added significant presence in California during the last 40 or 50 years, they are doing a terrible job driving out businesses and tax revenue.
  - WalterBright 4y ago
    Hows it doing in the last year? There's a current bill working through the CA legislature that will shut down small time fast food franchises.
    - lotsofpulp 4y ago
      Surely decades of producing multiple businesses leading the world in pretty much all business metrics is more indicative of business climate than 1 year. Maybe whatever laws in the past year dethroned California, but I am not willing to bet on it.

solidsnack9000 4y ago

This is probably not what it seems, because the overall cost of living (tax included) is nevertheless lower in Texas than it is in California. Sales tax is generally higher in California than in Texas so what is happening with these statistics? This is not to deny that we pay taxes in indirect ways. For example, property tax can be higher in Texas than in California, especially for older properties; and anyone who pays rent is going to pay some surplus in order to cover property tax. Say that a person rents a studio in a major Texas city for 1500 USD a month. With a Gross Rent Multiplier of 10 (probably high for Texas; low for California), that is about 180000 USD of property and it will be taxed at around 1%, or 1800 USD, per year. This suggests that about 150 USD/month of that person's rent in Texas is to cover taxes -- that's considerable! In California, a room in a house in a major city might cost 2000 USD a month; a studio might cost 3000 USD a month or more. Even if the nominal tax rate in California is the same as in Texas, for much of California's housing stock, the tax rate is based not on the current valuation but a valuation from the time of sale -- which can be many decades ago. Instead of paying 10% of their rent to cover taxes, a person in California might be paying much, much less -- 5% or even 1%. Even when they're paying 3000 USD for a studio, then, they might be paying much less property tax. However, a person in California paying 3000 USD for a studio is not better off than someone paying 1500 USD for a studio in Texas, simply because they are paying less tax. They do not have more space, more bathrooms, &c -- they are paying more for the same thing. The focus on tax policy ignores many other policy factors that overall contribute to a more manageable cost of living. Here is a web site you can use to look up Gross Rent Multipliers: https://apartmentpropertyvaluation.com/gross-rent-multiplier/city https://apartmentpropertyvaluation.com/gross-rent-multiplier... Here are the analyses that the Reddit post that the article referenced are based on: https://itep.org/whopays/california/ https://itep.org/whopays/california/ https://itep.org/whopays/texas/ https://itep.org/whopays/texas/

wowokay 4y ago
1500 for a studio man people are getting robbed in those dense places.
- beeboop 4y ago
  Currently studio shopping in central Seattle area and it's $2200+ for something modern looking. $300 more for parking. This is for around 400 square feet.

ErikVandeWater 4y ago

Friendly reminder that income taxes are still an awful idea. They disincentivize making income, and income is a wonderful thing. They also make it easy for the top .1% to avoid paying taxes better than the top 10%. Progressive taxes can still be achieved, through property taxes, sales taxes on luxury goods, and taxes on excessive usage of public goods.

memcg 4y ago
Sales taxes on luxury goods are often easy to avoid. When I bought an engagement ring, the jeweler offered to ship an empty box to Florida in order to avoid my states sales tax.
- lotsofpulp 4y ago
  That is not tax avoidance, that is tax evasion (former is legal, latter is illegal). Pretty much all states with sales taxes require residents to pay "sales and use tax" on items purchased out of state that have been brought into the state for the amount of sales tax that would have been paid had it been purchased within the state. https://floridarevenue.com/taxes/taxesfees/pages/sales_tax.aspx https://floridarevenue.com/taxes/taxesfees/pages/sales_tax.a... Florida used to allow online businesses not based in florida to forego collecting sales tax when shipping to florida (but it was always owed as use tax by the Florida resident recipient), but starting last year, businesses with more than $100k of online sales had to start collecting and remitting sales taxes also.
Apocryphon 4y ago
What are your thoughts on the land value tax
- ErikVandeWater 4y ago
  The land value tax is a good idea, assuming there is a tax on the pollution created when building the property. Unfortunately, there usually isn't one. A property tax is kind of a substitute for that tax. There should be that tax because bigger and more luxurious properties usually cut down more trees to clear space, and usually use building materials that are pollutive/environmentally destructive than commonplace materials.

tristor 4y ago

Nearly all of this is accounted for by property taxes and is really only true in specific locales (Austin). Most of the rest of Texas the overall tax burden is lower than you'd have in other states. Property taxes represented 1.9% of my income when I lived in Texas after my house doubled in value over ten years, My effective tax rate if I lived in California would be 10% of my income to the state, and on top of that sales tax ranges from 1% less to 2.5% more than the sales tax rate I paid in Texas. The only reason this is an issue for people is because of property tax in high real estate cost locales (Austin) compared to California that has wonky property taxes due to Prop 13.

mbesto 4y ago
> Nearly all of this is accounted for by property taxes and is really only true in specific locales (Austin). Most of the rest of Texas the overall tax burden is lower than you'd have in other states. Is it? My understanding is that they calculate the absolute value and then reverse it back into a % of their income (also known as effective tax rate, but in this case your effective tax rate for ALL taxes, not just income tax). The way I understand the data is along the following simplified example: A person who makes $100k in CA with a 10% income tax, and a $1M valued home @ 1% tax, pays $20k in taxes each year, which is 20% of their income. A person who makes $100k in TX with a 0% income tax, and a $1M valued home @ 2.2% tax, pays $22k in taxes each year, which is 22% of their income. Texas is a regressive system because it taxes an individuals total take-home income harder even, and especially, when their wealth (most people's wealth is tied to home value) goes up. The whole state of Texas, even outside of cities, is seeing property values go up. EDIT: Fixed my math. Posted that way too quick. EDIT2: While my example illustrates the danger in property values outpacing wages, the crux of the current issue is largely due to excise taxes: https://itep.org/whopays/texas/ https://itep.org/whopays/texas/ Basically you pay an extra 6% "on all retail sales, leases and rentals of most goods, as well as taxable services" in the state of Texas: https://comptroller.texas.gov/taxes/sales//#:~:text=Texas%20imposes%20a%206.25%20percent%20state%20sales%20and,for%20a%20maximum%20combined%20rate%20of%208.25%20percent https://comptroller.texas.gov/taxes/sales//#:~:text=Texas%20....
- umeshunni 4y ago

hahaxdxd123 4y ago

What about the massive rents that Californians have to pay due to the state's lack of housing? I would argue that since this is completely caused by State and Local governments, you can argue this is a tax levied by the state and distributed to property owners.

AceJohnny2 4y ago
Blame Prop 13, a proposition (law drafted by popular initiative) that was enacted in 1978 following rapidly rising property taxes, due to rising property values due to high demand. It passed with a staggering 62% of the popular vote. Prop 13 leads to perverse incentives where homeowners are disincentivized to allow developments in their area, so that they can "Preserve the Character of the Neighborhood". (Otherwise, they may want to allow development, to reduce demand and thus their property tax load) This also leads to underfunded local services, like education, which is mostly funded by local property taxes. https://en.wikipedia.org/wiki/1978_California_Proposition_13 https://en.wikipedia.org/wiki/1978_California_Proposition_13
- pkaye 4y ago
  Only 27% of education funding in California is local property taxes. Most of it is from state income taxes or Federal government divided out based on school student count and other factors. Many states are in the 20-30% range for local property tax funding but there are a few where it is much higher like 47% for Texas and 57% for Illinois. https://ed100.org/lessons/whopays https://ed100.org/lessons/whopays
  - AceJohnny2 4y ago
    That practically proves my point though. Education is underfunded, and in California local property taxes aren't contributing much.
    - pkaye 4y ago
      But you just said education is mostly funded by local property taxes. > This also leads to underfunded local services, like education, which is mostly funded by local property taxes.

UberFly 4y ago

I'm not so sure ITEP is so unbiased. Aren't their affiliations generally left-leaning? I do know for instance that they have been openly anti-trump tax policy in the past. As squishy as these kind of numbers are, such statements as "Texans pay more in taxes than CA" should be taken with a huge grain of salt as always.

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adgjlsfhk1 4y ago
being against bad tax policies doesn't make you unreliable.
kyleblarson 4y ago
Look at the members of their board. It's obvious.

howinteresting 4y ago

dijonman2 4y ago
Which state is a fascist regime?
- tootallgavin 4y ago
  - howinteresting 4y ago
- dougmwne 4y ago
- howinteresting 4y ago
- timbit42 4y ago
  Depends on your political lean.

s17n 4y ago

Title should have been "due to TX lacking a state income tax, most Texans pay more in taxes than CA"

solidsnack9000 4y ago
It is likely that the absolute amount of taxes that people pay in Texas is less, though. As of 2021, 4123 USD per person versus 6029 USD per person in California: https://www.thecentersquare.com/california/california-residents-pay-6-029-per-capita-in-key-state-tax-levies-study-finds/article_e50483d6-4a4d-11eb-bfd8-032368ea49c2.html https://www.thecentersquare.com/california/california-reside... I worry that the ITEP study (https://itep.org/whopays/ https://itep.org/whopays/) is basically misleading because (a) it tries to present the welfare of people as depending on taxation rather than the overall cost of living and (b) it uses percentage of income rather than the absolute amount of taxation to effectively argue that people who pay more taxes -- while not necessarily receiving more from the state -- are somehow paying less.

ummonk 4y ago

[flagged]

kazinator 4y ago

This article makes some unwarranted leaps. The fact that lower income Texans pay a larger fraction of their income in tax than higher earners doesn't support the claim that " [l]ow-income taxpayers bear a disproportionate share of the tax burden in those states", since the tax burden of a group is what that group as a whole pays as a fraction of the state's tax revenue. In the absence of income tax, taxes come from sources like consumption (e.g. sales taxes) and other things like property taxes. Lower income people save less money; they spend more of their income and so will pay more of their income in consumption taxes.

vineyardmike 4y ago
Generally, in terms of “Fairness” people view the tax burden as who is inconvenienced most. Saying “lower income people… will pay more of their income in taxes” is saying that lower income people are more inconvenienced. Even if my income is 10x that of the “lower income” class of people, and I pay more absolute taxes, its less burdensome to me to do that, because I presumably have already secured housing, and basic food, and basic transit, and that tax money I spent is of lesser marginal value.

whatever1 4y ago

That’s bs. In Texas you pay just 1-3% property tax. That’s it. Car registration is dirt cheap (<$100/year), housing is dirt cheap (200k get you a house with a swimming pool), electricity is super cheap (when it is not snowing) and gasoline is almost half price compared to California.

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dd36 4y ago
There’s no such thing as a free lunch. It all comes from somewhere. Texas does a better job of obfuscating and shifts more of the burden to lower incomes.
xienze 4y ago
Yeah I’m really curious about the methodology here. Property tax is surely higher, but then again property values are a good bit lower. Income tax is certainly lower in TX (hard not to be). Sales tax I’d wager is lower in TX as well, at least on average. Not sure about utilities, but it’s not hard to have cheaper electricity than CA. Gas is no contest. So what’s the angle here? Things that make you go hmmm…
- hindsightbias 4y ago
  It all rolls down the counties who have to pay for everything. So they raise your valuation 20% a year (if you're in an avg market). For the last 10 years. And then the rate goes from 1.2% to 1.9% over the same time. And that doesn't even cover highway use, as they've all got tolls now. With no Prop 13, anyone who picked the right hood as poor or middle class can no longer afford to stay.
briandrupieski 4y ago
1-3% property tax seems to line up with their breakdown for property tax: https://itep.org/whopays/texas/ https://itep.org/whopays/texas/ Looks like most of it comes from sales and excise taxes.
4y ago

munbun 4y ago

After exemptions, I pay 2% of my home’s appraised value in property taxes each year in Texas. 50% goes towards primary school + 30% goes to my local city but the money doesn’t seem to impact education outcomes or general quality of life near me. I don’t mind the distribution but it stings when local government seems to be plagued by chronic mismanagement.

acdha 4y ago
Regarding school performance, note that outcomes closely track the parents’ socioeconomic status. Once you’re over the level of basic staffing, safety, etc. issues this ends up reflecting more how well your community supports the poor and disabled than anything the school does.

tyingq 4y ago

Does this account for home assessed value when comparing the property taxes between CA and TX? I know the effective property tax rate is lower for CA vs TX, but the homes are much less expensive in TX.

vineyardmike 4y ago
Yes because people make more money in Cali, so the % of income is adjusted for.
- tyingq 4y ago
  Some types of jobs make more money in Cali. Some don't. And I imagine many companies don't cut your salary when you move from CA to TX.
  - vineyardmike 4y ago
    Well the minimum wage in California is roughly 2x texas. That will drive up the statistics because no one would be “as poor” in California as they are are in texas.
    - tyingq 4y ago
      To some degree, yes. Though the higher minimum wages in other states have raised the starting wages for many jobs in Texas that used to pay Texas minimum. That is, many formerly $7.25/hr rate entry level jobs in Texas are now paying closer to $15/hr. Because once a few companies adopt it, others have to compete. Also, some areas have their own minimum. Austin has had a $15/hr minimum for several years, recently raised to $22.
      - vineyardmike 4y ago
        Missing the point. The point was that yes house prices are accounted for in the calculations because it’s the percent of salary. So Californians pay less as a percent even though they have more expensive homes because they make more money at every income level.

matrix12 4y ago

Anyone who has owned property in Texas, and then sold it, and moved to SF, and bought a house might not concur.

jmugan 4y ago

I guess it comes down to income tax (California) vs. property tax (Texas). You have to make a minimum income to pay income tax, and many people don't cross that threshold, or if they do not by much, so "most people" pay more in Texas.

jmugan 4y ago
It looks like sales tax rates are about the same in both states.

akgoel 4y ago

While individuals do not have income tax, businesses do. Texas businesses are subject to property taxes, income taxes (the franchise tax), and taxes on total assets (business personal property), as well as sales taxes on services.

legitster 4y ago

> Despite TX lacking a state income tax, most Texans pay more in taxes than CA. This is pretty misleading. The report in question doesn't say whether Texans or California's actually pay more per capita - it's entirely as a percentage of the total state tax collected. https://itep.org/whopays/ https://itep.org/whopays/ (EDIT: This isn't correct, it's as percentage of income by average income in state, but the brackets are different per state). So it's because they are missing an income tax. But if someone hit you with a 50% income tax next year, you wouldn't consider your tax bill lower just because your share become proportionally smaller. With that in mind, per capita tax in California is ~$6800 and in Texas it's $4400. FWIW, I've never actually heard anyone complain about state taxes in California or consider moving because of them. The exodus to Texas has less to do with taxes and much more to do with general cost of living, which is still largely a function of state government.

paxys 4y ago
> The report in question doesn't say whether Texans or California's actually pay more per capita - it's entirely as a percentage of the total state tax collected The graph shows what percentage of their income people pay towards state and local taxes.
- legitster 4y ago
  Okay, good point. But these brackets are also a bit misleading, since in the ITEP data they are relative to each state. The lowest bracket in the ITEP data for California tops out at $23k, but it's only ~$20k for Texas. Meanwhile, the middle bracket in California tops out at $62k, while Texas it's only $58k. So again, the sales tax could be the exact same in both states, but it would show up as larger percentage of budget because people in Texas are poorer on average.
  - paxys 4y ago
    Yes, but that's the point of the article. Earning $1000 and paying $500 of it towards taxes is more regressive than earning $2000 and paying $800, even though in the second case you are paying more in terms of absolute dollars.

labrador 4y ago

Californians looking to reduce their tax burden should consider Vancouver Washington. Washington has no income tax and Oregon has no sales tax. Live in Vancouver, drive over the bridge over the Columbia River to Portland to do your shopping. Lots of people take advantage of this loop hole. Just don't forget you don't pump your own gas in Oregon. Rumor has it, gas pumping is a make work program for reformed felons.

timbit42 4y ago
I have a relative who works and shops in New Hampshire (no income or sales taxes) but lives in Maine to avoid New Hampshire's property taxes. Their drive from home to work is 10 minutes.
- lotsofpulp 4y ago
  They would only be legally saving sales tax on products or services bought and consumed in New Hampshire. Maine collects income tax on all income for Maine residents, regardless of where it is earned. First line in this document. https://www.maine.gov/revenue/sites/maine.gov.revenue/files/inline-files/residency_guidance_2020.pdf https://www.maine.gov/revenue/sites/maine.gov.revenue/files/... http://www.maine.gov/revenue/faq/sales-use-service-provider-tax http://www.maine.gov/revenue/faq/sales-use-service-provider-...

kurupt213 4y ago

What’s the sales tax in texas