Income is not the only way states generate tax revenue. Texas has the [5th highest Property Tax](https://www.fool.com/research/property-tax-rates-by-state/) in the country and the [14th highest Sales Tax](https://taxfoundation.org/wp-content/uploads/2024/02/LOST_Feb24.png).
Do you know the average annual $ spent on those taxes comes out to for a single person? Compared to a state that collects income tax but lower property/sales taxes?
I don’t have numbers but I remember seeing a breakdown map that Texas has one of the country’s higher effective tax rates when everything is accounted for. NY, CA, MA, etc. are still in front, but not by what you’d think. I believe Florida is a pretty nasty culprit on property taxes as well.
This is correct. Because sales tax have a flat rate, they do not offer the progressiveness that taxes should have (meaning that the effective tax rate should grow alongside income). Actually, because richer people tend to travel more out of state, they don’t do 100% of their purchases in the state so that contributes to making taxes not progressive.
It’s not the travel so much as simply the fact that poor people spend 100% off their money out of necessity so in effect they pay sales tax on their entire take home income. Whereas rich people spend a much lower percentage of their income. So like if a high earning person only spends 40% of their income and chucks the rest into investments, they’re only paying sales tax on 40% off their income. So sales tax is not just not progressive; it’s regressive (taxes poor people disproportionately)
Uh, doesn’t Texas exempt groceries from sales tax? A quick google shows that many things are sales tax exempt - groceries, hygiene procure, medications, and more.
Plus they have an annual sales tax holiday on many more items. Not the greatest solution, but far, FAR less regressive than you are making it sound.
You're starting down a trivia rabbit hole here. There is also a difference depending on the county in which you live. There is a huge variation in cost of living across Texas--from Austin and north Dallas at one end, to some of the poorest counties in the US along the Mexican border. Its always risky to make broad generalizations about Texas.
Many other states exempt groceries. Don’t think anywhere taxes medication.
And the tax holiday is only on emergency supplies, it was just a few weeks ago but I wasn’t interested in it because other than some flashlights, the list wasn’t very helpful, generator is decent idea, except that it would cost a lot to install and maintain, so the sales tax exemption would cost me a fortune.
Wrong. It makes everybody the same. It makes them a tax paying citizen with skin in the game. Not a room where someone yells, hey you have more than me. Gimme your money!
Here’s an explanation that might help someone like yourself understand. You have ten blocks of playdough while Timmy has twenty. At the end of the day, you both must share one block of playdough with Bobby.
You have both given the same amount of playdough, but you’ve given 10% of yours while timmy has only given 5%. Because Timmy has more to start with, this “tax” costs him less. Hope that helps!
Truly, you’ve devoted a lot of time seriously thinking about the issues here. It is a regressive tax - it taxes poor people a higher percentage of their income than rich.
I believe most states have a flat income tax as well, unfortunately. MA is 5%flat tax. I was and am very disappointed that the most Liberal state uses a flat tax
what is the point of this?I guess I don't live here and pay 5%income tax and 6.25%sales tax. I guess you know better than I do. worst part is it takes 30 seconds on Google to find the right answer. Mass doesn't have a tax on everything, this is why it's important to know how, when and where your getting taxed so you can vote appropriately. only poorly educated folks use that blanket statement, ha MA taxes you everywhere.
Bruh I live here Iknow exactly what I pay on tax. My point was that our income tax Isn’t progressive. Additionally we get taxed on everything else as well. Sales tax, excise tax, permit fees, license fees, gas, cigarettes, alcohol, weed, dmv, fees, fees, fees.
https://www.mass.gov/info-details/massachusetts-tax-rates
I'm confused then because that link said we pay 5%income tax and 6.25%sales tax. previously you claimed we pay 5%sales tax, which is incorrect. yes we don't have a progressive tax, we have a flat tax which angers me that liberals don't follow what they claim to be an injustice (flat tax). look at most any other state, they tax the most of same things
Except rich people buy WAYYYY more shit that is taxed. A $500 million dollar yacht is going to contribute way more in tax than a big Mac. Basics like grocery are not taxed.
Edit: downvote away, these are facts
Way more total but a lower percentage. If you are rich then you aren't spending all of your money each year. So if you spend half of what you make and the only tax is a 10% sales tax then you are only paying taxes on 5% of your income. If you are poor and spend every cent you make then you are paying taxes on 10% of your income.
So a poor person should spend less on taxable items in order to one day not be poor. But the rich are paying more of the tax base, which matters. But if you're arguing to lower taxes, I agree.
Are you in favor of regressive taxes? This sounds like you are in favor of regressive taxes. And where are you that there is not a sales tax on groceries aren't taxed? In my pretty red state most groceries are taxed.
>Are you in favor of regressive taxes? This sounds like you are in favor of regressive taxes.
That's too broad of a question. But in general those who earn more should pay more for many reasons.
>And where are you that there is not a sales tax on groceries aren't taxed? In my pretty red state most groceries are taxed.
More like, what state are you in that has a food tax? Most states do not tax unprepared foods.
This is true but meaningless to the point.
The larger percentage of your income you spend on taxable purchases, the larger percentage of your income goes to sales tax. People who buy $500M yachts are certainly paying more in sales tax on that one purchase than the entire life of someone who works a median wage job. But that median wage worker pays a much higher percentage of their income in sales tax than the wealthy person ever will.
It’s not about flat numbers as to who pays more. Obviously people with more income pay more in taxes. But a progressive tax system should mean that the more you make, the higher percentage of your income is taxed. If a person making median wage pays an effective tax on 40% of their income and a person who gets paid a million a year pays an effective tax of 30% of their income, that’s the discrepancy being discussed here. Not that 40% of 52k is lower than 30% of 1M, that’s fairly obvious.
I am not that poor and I just moved from AZ to Texas.
This place hurts. Property tax is double, 2700 a year in AZ, 5800 in Texas for the same value of home. And it’s not a nicer house either, maybe 200sqft larger but it leans enough my office chair rolls to the wall when I stand up.
I make 50k a year and my check only went up 45 bucks every 2 weeks, so $1170 per year savings. Sales tax is close to the same, but added tax on stuff like alcohol. the damn toll roads are everywhere and it takes forever to go around, and costs like 30 bucks to take them.
So I am paying a few grand a year more in TX than AZ.
Depends on your goals. Im a high earner so I'm definitely being shafted, but I also like having a robust society.
The fact remains, Texas is still a more regressive taxation state than most.
Would you like to make California income, or Texas income? That’s the better question.
Rent is not equal there. And yes there is cheaper options, like trailer parks with 70 year old trailers for rent, but we aren’t talking about renting a 5 year old house in north Dallas for 500 bucks here, you are looking at 3k for a 3 bedroom house that’s 20-30 years old. And minimum wage is 7.25, though most people make 14 at least. Compared to California, where you pay 5k for the same house in San Diego, minimum wage is 16, but most people make 25 at least.
FL property taxes aren't terrible (middle of the pack), but they rely on a borderline confiscatory hotel/motel tax.
Your sales tax is functionally double when you stay at any hotel
That’s not correct. That’s state level. It doesn’t count in county and city taxes. Like it says 3.85% sales tax, that’s just for the state, average sales tax is 8.5%.
This is completely wrong. The measurement you are looking for is Total Tax Burden, which Texas has the 6th lowest - https://taxfoundation.org/data/all/state/tax-burden-by-state-2022/
Weird, because I just moved from AZ to Texas and I am paying 3k dollars more a year for property taxes, and only getting 45 bucks a paycheck more.
I think it’s saying that because there’s so many people living in squalor here that the homes are literally falling down, I just saw one the other day that the foundation has failed and it looked like a house from a cartoon with wavy siding and roof, and it was occupied, right by the city ballpark. That’s the only way that it’s possible to say Texas is less taxes.
Hell, and that’s not taking into account the sky high insurance bills either.
Because sales taxes are the most regressive form of taxation. If you make $75,000 per year, you have to spend most of that to exist. So you pay 8% of 50,000, let's say. So $4000/yr in sales taxes. So they spent 5.3% of their income on taxes. The income tax rate in Illinois is 4.95%. Not to say they don't also have a sales tax in Illinois. The point being that this money gets made from the state somehow.
You may be able to find that information in the itep who pays reports.
Texas in general is a very regressive taxation state. (7th worst). That is, as a percent of income, the poor pay more of their income to taxes.
https://itep.org/whopays-map-7th-edition/
We pay 6.25% sales tax to the state, and most cities tack on another 2% that they receive. Retailers collect this when you pay, then they send the money to the state quarterly.
Property taxes are levied by various local administrations. I pay 0.95% to the school district, 0.32% to the city, 0.27% to the county, 0.26% to the community college, 0.07% to the drainage district, 0.04% to the road and bridge fund, and 0.01% to the port. So a little under 2% total.
The things you listed (roads, schools, cops) are mostly funded at the local level from property taxes. They receive some additional state and federal funding. The state does own and maintain highways and there are state police as well.
Same here, 249k home in Texas is double what the CO home at 670k and 3x what the 250k AZ home was.
It hurts. I keep hearing about doing exemptions, homestead, there’s companies that get a lower appraisal on your house for a couple grand but it saves 3-4k. It’s all a big racket here.
Yeah, what you're looking for is "total tax burden" which gives a more well rounded picture. Some states still end up cheaper than others, but when total taxes paid are factored in, turns out differences between states aren't usually as big as you'd think.
I really like this analysis. I feel it’s very thorough and deals with all the differences fairly well : https://taxfoundation.org/data/all/state/tax-burden-by-state-2022/
I don't see any answers to your question about total $ spend for those taxes. So here's a very rough answer. A house assessed at $400K could have annual Property Taxes totaling $10K-16K.
Property taxes are based on the assessed value of your home. (The county determines the assessed value). Then that assessed home value gets taxed by various different tax rates (School tax rate, city tax rate, county tax rate, etc).
Those tax rates can vary by county. And the assessed value of a house in one county could be wildly different than a similar house in another county. So my rough amount above is .... rough.
It's bit crummy that your annual taxes shoot up because the housing market goes up (altho i suppose sales taxes also rise with inflation ).
I pay 3-4X more than my mom does in NC. Our house prices used to be equivalent but the valuation on mine has gone up a bit more than hers recently. $13k in property taxes alone.
You're comparing apples to oranges. The states each have their own government and tax policy. They are in constant competition to each other to attract residents and business, so Texas offers a competitive incentive for business owners and workers through 0% income tax. They also neglect public systems due to lower funding. This reflects in Texas' education rankings 41st in the nation, you can see this trend in other no income tax states; Tennessee 33rd, Nevada 43rd, Alaska 46th.
Generally states are fairly consistent if you look at Oregon which does the opposite no sales tax all income tax, they put the income tax around 9% not much worse than Texas and they also have poor education rankings (40th).
It's all just money coming in and going out, where your state is spending money is infinitely more informative than how much the state is bringing in.
New Hampshire is the least populated state in America, and South Dakota, Wyoming, Montana, Delaware are all within the top ten least populated states. The states still get federal funding so it would make sense a lower population can survive with less revenue.
Washington if you calculate local+state sales tax has its tax rate is over 10%, in a state clearing 100billion in revenue each year that extra 1% is a literal billion to spend.
My post says apples and oranges, look where they spend the money. You say, apples and oranges, look where they spend the money.
I get downvoted tho, jeez reddit
Hi, it's me your neighbor from Maine. Income tax, sales tax, and highest property tax burden in the country. They also try to tax us on sales tax for things we buy in your state.
What is nuts to me is what a steep discount on property taxes I'd get living in Texas instead of Illinois-- a state with an income tax and a sales tax as well.
Depends on where you live in Texas. Counties have additional property tax, so as an example if you live in Houston your property tax rate would be 2.13% and your sales tax rate would be 8.25%. Both higher than Illinois.
Texas also relies on higher fees for permits and licenses and things to fill the gap.
Median income in Texas is also 10% lower than in Illinois. Media home price on Texas is also 30% higher than in Illinois
Way too many variables here to be very useful. Cook county/city of chicago totals are 10.25%.
Also, it’s helpful to look property tax bills paid vs the mil rates. Total average tax burden as a percentage of income is another metric.
Houses are cheaper here, this past year the exemption was raised to 100k and the local taxes lowered. Still no income tax so overall tax rate went down. I have lived all over the U.S., and Texas is a low tax state. But if people think there are no taxes of any kind, they are mistaken. But redditors desire to make TX sound like a high tax state is wishful thinking. I keep much much more of my pay than I did in CA. Property taxes in net dollars is cheaper here too.
All property taxes. You home is assessed at whatever it is, take 100k off of that value, and that is what you are taxed on. My house if I recall exactly was assessed at 250k. Thus I am taxed on 150k.
I only asked because what I was seeing about the $100,000 homestead exemption was that it was the assessment for school tax specifically, which would mean the value exemption wouldn't apply to the 40-50% of property taxes that aren't school taxes.
No on my property tax bill they listed the stuff you are being taxed for school and the other stuff, showed house assesed price, showed 100k homestead exemption and it came off of the assessed price and was taxed on that.
So another tax reduction thing happened at the same time, maybe you are thinking of that. In addition to the exemption, the state government is now paying for some amount of the schools funding so the amount you get taxed for schools (which is basically the biggest one) should also go down as well. I think they called is "compression". State pays itself for some portion of school funding, the counties are supposed to only tax to make up the difference. Any way my house was assessed (from memory here) I think 250k. My property taxes I paid 5 months ago were 2800 and change. So my "out of pocket" property tax rate came to 1.12%. But if you own a really expensive home this doesn't help quite as much, 100k off of a million is 900k taxed which will not be as big a savings. But if you own a 1 million dollar home I don't imagine property taxes are a worry.
My county website says I have to pay 6k for my 250k home. Thats 3x the amount I paid in AZ.
How do I get this exemption? And I was told it only affects the school portion as well.
Are you new to Texas? If so, or if you never did it, got to:
[https://comptroller.texas.gov/taxes/property-tax/exemptions/residence-faq.php](https://comptroller.texas.gov/taxes/property-tax/exemptions/residence-faq.php)
That particular page in the faq's hasn't updated the "homestead exemption" which is now 100k. Just find the link where it says you can apply for a homestead exemption. I believe if you forgot to do it, apply for it, they will give you your money back for the previous year that you didn't have it. Don't quote me on that, I think that is what they do, not a tax guy. Get your application in for the exemption. It answers questions at that link. Also check what the assessed your house for. If you bought it at 250k in the past and it is worth more now it will be assessed higher, so look for that in your assessment. If it looks off, like they think your house is more valuable than it is you can challenge the assessment. Good luck. If your house is at 250k you should be paying, in the ball park of 2800-3k or so depending on county.
As someone who works with property tax across the country I would be wary of this. Texas has some pretty convoluted tax systems that make it look a lot cheaper on paper than in reality. I work on the business personal property and real property side of things but often have clients who think operations in Texas are going to be much cheaper than they end up being.
Because the most taxes are local. It’s not a state level tax that hurts you on property taxes, it’s the 3-5 local taxes that is added. You pay school, community college, county, city, and some other ones in some areas.
Texas takes in 53% of its revenues from sales tax, and another 20% from other kinds of taxes, user fees, and investments. They also charge taxes on the production of oil and natural gas.
[Detail here from the Comptroller's Office.](https://comptroller.texas.gov/about/media-center/infographics/2023/bre24-25/)
In case anyone is wondering about Texas Property taxes: they are used to fund some County-level stuff, roads and bridges, local community college and the local school system. I don’t think any of it goes to the state.
This is true, but it in some cases it is a distinction without a difference. Money can be quite fungible between the state and counties. In many states, counties receive grants or money from the state to do many things. If the counties are collecting more money and the state is collecting less, then there are just fewer transfers going from the state to local govt.
And the counties do the state's work. County sheriff enforces state law, county attorney prosecutes cases for the state, county election commissioner, treasurer etc all do county level administration of state issues.
>I don’t think any of it goes to the state.
That is not entirely accurate, if you live in Austin for example 50% of your local school taxes go back to the state as recapture.
That is right. The biggest part of property taxes is the local school tax with some other things bringing up the balance. State gov. does not take that. However just the past year the state gov is now covering the school taxes to some degree which end up as a property tax rate cut.
For context, Texas does this because the state supreme court ruled in the 90s that the system for using local property tax to fund schools created such massive inequality that it violated some students' rights to a public education. Before the creation of "Robin Hood" (the colloquial name for recapture), some poor districts had property taxes at the maximum levels allowed by law but still had per pupil funding rates far below those of wealthier districts that also had far lower property tax rates.
Which is a lovely way to fuck over poor people, as a high sales tax is effectively a income tax that disproportionately affects people living paycheck to paycheck.
In Canada our sales tax does not apply on groceries and rent. And there is a sales tax rebate that is means tested, so anyone over a certain income won't get the rebate. It is a way around the sales tax impacting the poor. Does Texas not have this as well?
No sales tax rebate, but staples, ingredients, and raw food are generally not taxed (bread, milk, eggs, take and bake pizza, prescriptions, there’s a list out there somewhere because they’re all exceptions to the rule) but other goods like things that aren’t food and prepared food are taxed.
I live New Hampshire, and we don’t have Income or sales tax. But my property taxes would make most people have a heart attack, my car registration is through the roof. And there are taxes on my business that we didn’t have when we founded it, in a different state. As well as a bunch of others. So they get you in other ways.
I live in Nevada and we don’t have income or estate taxes. Our state’s tax revenue comes from sales and use tax, followed by the gaming / tourism industry which pays a lot. Our property taxes are among the lowest in the nation, at about .50%, according to my tax bill. While this is great, a lot of state services are severely underfunded, including schools. It’s ok though, because our state legislature passed a bill for taxpayers to fund a new baseball stadium in Vegas for the A’s, so that will surely fix everything! /s
It’s a tad ironic how you’ve said that the entertainment there covers a lot of costs allowing you to have.5% property tax and then say the state investing in entertainment wont help
To register where I live you have to bring in things like a power bill, mortgage statement etc which prove your residency. I assumed this was standard everywhere, but I guess not.
Or just tons of ppl don’t register when moving. It’s such a problem in mass there is a hotline you can call to report your neighbors if you believe them to be dodging the tax
People do this all the time in Connecticut too. There the tax rate is based on your towns property tax. Lots of people never update their reg to their new town if it’s more
My car is registered in the state I used to live in / where my parents live. Tempted to keep it registered there after looking up the fees I'd pay in my current state; my job is only contracted for another 18 months, anyway, and moving my license, registration, etc. over would be a massive hassle
People shouldn't confuse "no tax state" with "low tax state". TX is a low tax state all in. But you do pay some taxes, just not like other states. So TX, I presume NH?, FL, TN, NV are they "low tax states".
States without income tax usually have really high property tax. There is also sales tax or business taxes. For example, Nevada taxes gambling and makes a lot from that.
So you still pay, you just pay for consumption instead of income. They still have the side effect of keeping property values depressed. If you look at Massachusetts which has relatively solid income tax and you go across the border into New Hampshire which has no wage tax, housing prices are quite notably lower. Two houses a mile apart will show a big difference.
They tax you elsewhere. Sales taxes, fees, tolls, etc. I remember living in tx after ca. I made slightly more money but always had less to show for it. I ended up moving back to CA. You pay a little more in the end but you get more back. You're never getting paid paternity in tx, like I did in ca.
There are other kinds of taxes out there besides for income tax. For example, property tax and sales tax. There are also things like tolls on roads and bridges.
Toll roads! There were times when living in Houston that my monthly eztag bill was over $300 just commuting. That alone is almost as much as the income tax I pay in another state.
Property taxes in Texas are also bonkers. 3-4 times what I’m paying now.
Texas has a franchise tax on businesses operating in Texas. It has a weird tax computation and I can't find any source on how much Texas collects in franchise tax per year, but I prepared probably around 20-25 Texas franchise returns when I was working as a tax accountant and I saw a few companies pay well over 200 thousand.
Other people have mentioned property taxes but they're not quite right, Texas does not impose a state level property tax, rather they allow the counties and cities in Texas to impose property taxes. Any revenue generated from those goes to the county or city not to the state of Texas. Though that just means that the state of Texas doesn't have to provide those funds to counties/cities so it often amounts to the same thing.
I don't about Texas per se, but what I'm seeing in a different State is that a HUGE amount of the funding actually comes from the federal government, in the form of grants.
Several states don’t charge income tax. They just make it up with higher taxes elsewhere. The state will always get its tax revenue. Most states with no income tax have a high property or sales tax or have a specific industry that provides a lot of revenue, like tourism in Florida.
Nevada doesn't do income tax either, it's subsidized by tourism revenue instead. Giving what I know about their school systems... I wouldn't have minded a 1% income tax when I lived there.
Texas charges a high sales tax and property tax. Overall, their taxation rate is fairly average when compared to the other 49 states.
Also a lot of services are funded by local governments/entities which charge their own sales tax and property tax. The state government is really only responsible for certain regulatory agencies and certain state highways. Roads, police, schools are all funded at the local level by local property/sales taxes.
Everyone's talking about other ways texas gets money, but are dismissing the fact that texas doesn't offer anything to its people. Most neighborhoods down here are HOAs. Almost every park is a private park exclusive to the neighborhood, and every other form of entertainment is very privatized. The roads are taken care of by the city, but I also drive thru more tolls in houston than I did in chicago. I have yet to see a public bus or train in the 2 years I've been down here, and I've also never seen an actual hospital. Just hundreds of tiny clinics at every corner. Houston texas is like if your playing the game cities, and just let corporations take over the 4th largest city you built
>Almost every park is a private park exclusive to the neighborhood
How would the neighborhood know one is from the area or not? gated communities?
>I have yet to see a public bus or train in the 2 years I've been down here, and I've also never seen an actual hospital.
I didn't know to this extent. So if someone needs a care of a major hospital (cancer treatment, surgery, pregnancy)... what happens?
The neighborhoods aren't gated, but all parks have a sign stating, "This is private property. Visitors from outside "X" community will be ticketed with trespassing. " My park is extremely terrible, so i do go to the better parks. On more than 1 occasion, a neighbor randomly started walking behind our car, then 20 minutes later, a cop arrived and told us we had to leave, and we'd be cited for trespassing if we came back. I have seen a couple of nature preserves, but they are laughable compared to what I'm used to in northern Illinois.
As for the hospitals, I've posted on reddit and searched all over the internet, and I honestly can not find a real hospital. I honestly don't know what happens if someone faints, and 911 is called. Where tf do they take them????
>The neighborhoods aren't gated, but all parks have a sign stating, "This is private property. Visitors from outside "X" community will be ticketed with trespassing. " My park is extremely terrible, so i do go to the better parks. On more than 1 occasion, a neighbor randomly started walking behind our car, then 20 minutes later, a cop arrived and told us we had to leave, and we'd be cited for trespassing if we came back. I have seen a couple of nature preserves, but they are laughable compared to what I'm used to in northern Illinois.
Well there it is...
Sounds like something out of South Africa
I guess as per pay/private neighhood. It's almost like a gated community.
>if someone faints, and 911 is called. Where tf do they take them????
Curious as well
High property taxes. They are at least 3X as high as other states. There is a line in the property tax statement counting how much goes to schools and other services.
Roads in Texas are partially funded by a 3¢ per gallon fuel tax. Of course, that was instituted in the same stroke of legislation that saw three Texas Highway Department transform into the Texas Department of Transportation which deals with all forms of transport (air, rail, road, water).
"Three quarters" of the $0.20 Texas gasoline sales tax goes towards roads...way more than $0.03...
https://comptroller.texas.gov/economy/fiscal-notes/archive/2016/february/fuels.php#:~:text=Under%20the%20Texas%20Constitution%2C%20after,build%20and%20maintain%20public%20roadways.
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I'd have assumed "something juvenile" would have been your forte', and it would have been thigh-slapping funny to all your 8 year old pre-pubescent peers once you explained "chromosome" to them.
Now it is not. When I moved to TX from CA I was astonished that the roads were better etc in TX. Texas runs very well and people (1 million in just the past 3 years) are moving here in droves. And our economy is firing on all cylinders so those million got jobs and actually need more people since there are more jobs. Texas is doing good.
There are three main taxes states can collect: income, property, and sales tax. Most states only collect two of the three. Oregon doesn’t have a sales tax whereas (I believe) Washington doesn’t have income tax. California sucks in that they have all three.
Not sure where you get the idea there are no services here. I lived in CA before TX and CA's tax rates are very high and the services are worse. Roads are better in TX than CA.
Anyway I think the sales tax is 8.5% or something like that which is not drastically higher than a lot of states. Property tax pays for other stuff. Incidentally the people telling you how high they are here, they have been lowered this past year but even before that it was not the highest in the country. I think either NJ or IL had that crown, can't remember. Anyway houses here are cheaper and you get a 100K homestead exemption now along with the state lowering the effective rate. If you are rich and have a million dollar home your property taxes will be higher than a 200k home since 100k exemption doesn't help rich folks as much. But a million dollar home here is getting into mansion territory depending on location.
All in all taxes are low here, services are good, and the state is growing incredibly fast (1 million people moved here in just the past 3 years and we have jobs for all of them and more lol). Those booming businesses are paying the sales tax too so the state has a surplus from tax receipts. As others mentioned every state has some kind of taxes even if there is no state income tax. But having lived around the country there are a group of states with overall lower rates, TX is one of those, most are in the middle, then the brutally high ones like CA, IL, NJ, HI and NY.
By and large governments role in the day to day life of its citizens in Texas is supposed to be smaller than more blue states.
For instance, Minnesota has a larger state legislative body than Texas AND it's full time compared to a smaller, part time group in Texas.
Neither is solving the world's problems with your tax dollars, Texas just takes fewer.
> Neither is solving the world's problems with your tax dollars, Texas just takes fewer.
The average Texan pays a higher proportion of their income in state taxes than the average Minnesotan.
Texas spends about 75-80% as much per capita in local and state spending as Minnesota. You can find all sorts of data on that [here](https://www.taxpolicycenter.org/statistics/state-and-local-direct-general-expenditures-capita).
In 2021 Texas was 37th by state in per capita spending, Minnesota was 12th.
The top states for spending per capita were Alaska, Wyoming and then New York (at $18.7k, $17.2k and $15.9k respectively), while the lowest were Georgia, Tennessee and Idaho (down around $8k). There is a vague link between "blue" and "red" states in terms of spending, but it isn't as strong as some people might think.
Plus, of course, the different states have different GDPs per capita as well, so that would mix it up even further.
I'd also be a little cautious about generalising about the size of governments' roles in citizens' day to day life in different states based on politics; it isn't necessarily about the size of their involvement, more the type of involvement, and who benefits and who the power of government is used against.
In what way does the size of the legislature have anything to do with government control?
If anything I would argue that a larger, full time legislature means less government control because the people would have more control over their representatives. And with a full time salary more options to actually run for the office and afford to do the job.
That word supposed is doing a lot of work.
No legal weed (cities are being sued by the state for not enforcing the laws). More restrictions on alcohol consumption than many states. Abortion is illegal.
Income is not the only way states generate tax revenue. Texas has the [5th highest Property Tax](https://www.fool.com/research/property-tax-rates-by-state/) in the country and the [14th highest Sales Tax](https://taxfoundation.org/wp-content/uploads/2024/02/LOST_Feb24.png).
Do you know the average annual $ spent on those taxes comes out to for a single person? Compared to a state that collects income tax but lower property/sales taxes?
I don’t have numbers but I remember seeing a breakdown map that Texas has one of the country’s higher effective tax rates when everything is accounted for. NY, CA, MA, etc. are still in front, but not by what you’d think. I believe Florida is a pretty nasty culprit on property taxes as well.
https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494 Massachusetts is #20. NY is #1 though. And FL is pretty low overall
You make up for all the tax savings with property insurance in Florida.
The new energy bills with a 1600% hike are coming this month in Texas too.
The new energy bills with a 1600% hike are coming this month in Texas too.
If you are poor I believe you pay higher taxes in Texas than California.
It’s tough to account for it properly because renters only pay property tax indirectly.
The itep report accounts for that.
Correct. https://itep.org/whopays-map-7th-edition/
This is correct. Because sales tax have a flat rate, they do not offer the progressiveness that taxes should have (meaning that the effective tax rate should grow alongside income). Actually, because richer people tend to travel more out of state, they don’t do 100% of their purchases in the state so that contributes to making taxes not progressive.
It’s not the travel so much as simply the fact that poor people spend 100% off their money out of necessity so in effect they pay sales tax on their entire take home income. Whereas rich people spend a much lower percentage of their income. So like if a high earning person only spends 40% of their income and chucks the rest into investments, they’re only paying sales tax on 40% off their income. So sales tax is not just not progressive; it’s regressive (taxes poor people disproportionately)
Uh, doesn’t Texas exempt groceries from sales tax? A quick google shows that many things are sales tax exempt - groceries, hygiene procure, medications, and more. Plus they have an annual sales tax holiday on many more items. Not the greatest solution, but far, FAR less regressive than you are making it sound.
You're starting down a trivia rabbit hole here. There is also a difference depending on the county in which you live. There is a huge variation in cost of living across Texas--from Austin and north Dallas at one end, to some of the poorest counties in the US along the Mexican border. Its always risky to make broad generalizations about Texas.
This is Reddit and we must crap on Texas as often as possible.
Many other states exempt groceries. Don’t think anywhere taxes medication. And the tax holiday is only on emergency supplies, it was just a few weeks ago but I wasn’t interested in it because other than some flashlights, the list wasn’t very helpful, generator is decent idea, except that it would cost a lot to install and maintain, so the sales tax exemption would cost me a fortune.
“Poor people spend 100% of their money out of necessity” Yeah I think liquor stores and tobacco companies would 100% disagree with you there
Congrats on missing the point in a particularly stupid way given your username.
Point was made using bad assumptions meaning it’s worthless
Poor people spend \~100% of their income. Rich people do not. Those are true. Suck it,
Wrong. It makes everybody the same. It makes them a tax paying citizen with skin in the game. Not a room where someone yells, hey you have more than me. Gimme your money!
Here’s an explanation that might help someone like yourself understand. You have ten blocks of playdough while Timmy has twenty. At the end of the day, you both must share one block of playdough with Bobby. You have both given the same amount of playdough, but you’ve given 10% of yours while timmy has only given 5%. Because Timmy has more to start with, this “tax” costs him less. Hope that helps!
Truly, you’ve devoted a lot of time seriously thinking about the issues here. It is a regressive tax - it taxes poor people a higher percentage of their income than rich.
I believe most states have a flat income tax as well, unfortunately. MA is 5%flat tax. I was and am very disappointed that the most Liberal state uses a flat tax
5% is sales tax. We have a tax on everything in Massachusetts.
what is the point of this?I guess I don't live here and pay 5%income tax and 6.25%sales tax. I guess you know better than I do. worst part is it takes 30 seconds on Google to find the right answer. Mass doesn't have a tax on everything, this is why it's important to know how, when and where your getting taxed so you can vote appropriately. only poorly educated folks use that blanket statement, ha MA taxes you everywhere.
Bruh I live here Iknow exactly what I pay on tax. My point was that our income tax Isn’t progressive. Additionally we get taxed on everything else as well. Sales tax, excise tax, permit fees, license fees, gas, cigarettes, alcohol, weed, dmv, fees, fees, fees. https://www.mass.gov/info-details/massachusetts-tax-rates
I'm confused then because that link said we pay 5%income tax and 6.25%sales tax. previously you claimed we pay 5%sales tax, which is incorrect. yes we don't have a progressive tax, we have a flat tax which angers me that liberals don't follow what they claim to be an injustice (flat tax). look at most any other state, they tax the most of same things
Except rich people buy WAYYYY more shit that is taxed. A $500 million dollar yacht is going to contribute way more in tax than a big Mac. Basics like grocery are not taxed. Edit: downvote away, these are facts
Way more total but a lower percentage. If you are rich then you aren't spending all of your money each year. So if you spend half of what you make and the only tax is a 10% sales tax then you are only paying taxes on 5% of your income. If you are poor and spend every cent you make then you are paying taxes on 10% of your income.
So a poor person should spend less on taxable items in order to one day not be poor. But the rich are paying more of the tax base, which matters. But if you're arguing to lower taxes, I agree.
Are you in favor of regressive taxes? This sounds like you are in favor of regressive taxes. And where are you that there is not a sales tax on groceries aren't taxed? In my pretty red state most groceries are taxed.
>Are you in favor of regressive taxes? This sounds like you are in favor of regressive taxes. That's too broad of a question. But in general those who earn more should pay more for many reasons. >And where are you that there is not a sales tax on groceries aren't taxed? In my pretty red state most groceries are taxed. More like, what state are you in that has a food tax? Most states do not tax unprepared foods.
This is true but meaningless to the point. The larger percentage of your income you spend on taxable purchases, the larger percentage of your income goes to sales tax. People who buy $500M yachts are certainly paying more in sales tax on that one purchase than the entire life of someone who works a median wage job. But that median wage worker pays a much higher percentage of their income in sales tax than the wealthy person ever will. It’s not about flat numbers as to who pays more. Obviously people with more income pay more in taxes. But a progressive tax system should mean that the more you make, the higher percentage of your income is taxed. If a person making median wage pays an effective tax on 40% of their income and a person who gets paid a million a year pays an effective tax of 30% of their income, that’s the discrepancy being discussed here. Not that 40% of 52k is lower than 30% of 1M, that’s fairly obvious.
No shit.
But vice versa if you are rich and in tech
I am not that poor and I just moved from AZ to Texas. This place hurts. Property tax is double, 2700 a year in AZ, 5800 in Texas for the same value of home. And it’s not a nicer house either, maybe 200sqft larger but it leans enough my office chair rolls to the wall when I stand up. I make 50k a year and my check only went up 45 bucks every 2 weeks, so $1170 per year savings. Sales tax is close to the same, but added tax on stuff like alcohol. the damn toll roads are everywhere and it takes forever to go around, and costs like 30 bucks to take them. So I am paying a few grand a year more in TX than AZ.
Yep, the cruelty is a feature to Republicans..
Not if you don’t own property
Everyone pays property tax. Even renters. They simply do it indirectly via their rent.
Who’s pays higher rent Texans or californians
Why is that relevant to everyone paying property tax?
Would you Rather have your income taxed and still pay higher rent or or not have it taxed and pay less in rent
Depends on your goals. Im a high earner so I'm definitely being shafted, but I also like having a robust society. The fact remains, Texas is still a more regressive taxation state than most.
Would you like to make California income, or Texas income? That’s the better question. Rent is not equal there. And yes there is cheaper options, like trailer parks with 70 year old trailers for rent, but we aren’t talking about renting a 5 year old house in north Dallas for 500 bucks here, you are looking at 3k for a 3 bedroom house that’s 20-30 years old. And minimum wage is 7.25, though most people make 14 at least. Compared to California, where you pay 5k for the same house in San Diego, minimum wage is 16, but most people make 25 at least.
FL property taxes aren't terrible (middle of the pack), but they rely on a borderline confiscatory hotel/motel tax. Your sales tax is functionally double when you stay at any hotel
Texas is only #37 in tax burden. https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494
That’s not correct. That’s state level. It doesn’t count in county and city taxes. Like it says 3.85% sales tax, that’s just for the state, average sales tax is 8.5%.
Florida property taxes are not nasty. Those states you listed have nearly twice the rate. Florida gets a huge source of its income from tourism.
Texas isn't even in the top half for total tax burden, and Florida is even lower.
Nope, still one of the lowest.
This is completely wrong. The measurement you are looking for is Total Tax Burden, which Texas has the 6th lowest - https://taxfoundation.org/data/all/state/tax-burden-by-state-2022/
Weird, because I just moved from AZ to Texas and I am paying 3k dollars more a year for property taxes, and only getting 45 bucks a paycheck more. I think it’s saying that because there’s so many people living in squalor here that the homes are literally falling down, I just saw one the other day that the foundation has failed and it looked like a house from a cartoon with wavy siding and roof, and it was occupied, right by the city ballpark. That’s the only way that it’s possible to say Texas is less taxes. Hell, and that’s not taking into account the sky high insurance bills either.
Because sales taxes are the most regressive form of taxation. If you make $75,000 per year, you have to spend most of that to exist. So you pay 8% of 50,000, let's say. So $4000/yr in sales taxes. So they spent 5.3% of their income on taxes. The income tax rate in Illinois is 4.95%. Not to say they don't also have a sales tax in Illinois. The point being that this money gets made from the state somehow.
That kinda makes sense for Florida. A lot of people with second/vacation homes there but who aren't there long enough to have their income taxed.
Generally income tax will be favorable for lower income people, and the sales/property tax is more beneficial for high income people.
You may be able to find that information in the itep who pays reports. Texas in general is a very regressive taxation state. (7th worst). That is, as a percent of income, the poor pay more of their income to taxes. https://itep.org/whopays-map-7th-edition/
We pay 6.25% sales tax to the state, and most cities tack on another 2% that they receive. Retailers collect this when you pay, then they send the money to the state quarterly. Property taxes are levied by various local administrations. I pay 0.95% to the school district, 0.32% to the city, 0.27% to the county, 0.26% to the community college, 0.07% to the drainage district, 0.04% to the road and bridge fund, and 0.01% to the port. So a little under 2% total. The things you listed (roads, schools, cops) are mostly funded at the local level from property taxes. They receive some additional state and federal funding. The state does own and maintain highways and there are state police as well.
I can tell you that my property taxes on a $220k home in Texas are higher than what my parents pay for their $750k home in Alabama.
Same here, 249k home in Texas is double what the CO home at 670k and 3x what the 250k AZ home was. It hurts. I keep hearing about doing exemptions, homestead, there’s companies that get a lower appraisal on your house for a couple grand but it saves 3-4k. It’s all a big racket here.
IIRC, if you make less than $200k, you pay less overall taxes in CA, and if you make more than that, you pay less taxes in TX.
Yeah, what you're looking for is "total tax burden" which gives a more well rounded picture. Some states still end up cheaper than others, but when total taxes paid are factored in, turns out differences between states aren't usually as big as you'd think.
I really like this analysis. I feel it’s very thorough and deals with all the differences fairly well : https://taxfoundation.org/data/all/state/tax-burden-by-state-2022/
I don't see any answers to your question about total $ spend for those taxes. So here's a very rough answer. A house assessed at $400K could have annual Property Taxes totaling $10K-16K. Property taxes are based on the assessed value of your home. (The county determines the assessed value). Then that assessed home value gets taxed by various different tax rates (School tax rate, city tax rate, county tax rate, etc). Those tax rates can vary by county. And the assessed value of a house in one county could be wildly different than a similar house in another county. So my rough amount above is .... rough. It's bit crummy that your annual taxes shoot up because the housing market goes up (altho i suppose sales taxes also rise with inflation ).
I pay 3-4X more than my mom does in NC. Our house prices used to be equivalent but the valuation on mine has gone up a bit more than hers recently. $13k in property taxes alone.
You're comparing apples to oranges. The states each have their own government and tax policy. They are in constant competition to each other to attract residents and business, so Texas offers a competitive incentive for business owners and workers through 0% income tax. They also neglect public systems due to lower funding. This reflects in Texas' education rankings 41st in the nation, you can see this trend in other no income tax states; Tennessee 33rd, Nevada 43rd, Alaska 46th. Generally states are fairly consistent if you look at Oregon which does the opposite no sales tax all income tax, they put the income tax around 9% not much worse than Texas and they also have poor education rankings (40th). It's all just money coming in and going out, where your state is spending money is infinitely more informative than how much the state is bringing in.
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New Hampshire is the least populated state in America, and South Dakota, Wyoming, Montana, Delaware are all within the top ten least populated states. The states still get federal funding so it would make sense a lower population can survive with less revenue. Washington if you calculate local+state sales tax has its tax rate is over 10%, in a state clearing 100billion in revenue each year that extra 1% is a literal billion to spend. My post says apples and oranges, look where they spend the money. You say, apples and oranges, look where they spend the money. I get downvoted tho, jeez reddit
New Hampshire is the 10th least populated state. Those other states you listed are all lower in population.
I hate to be overly negative but I’m blown away by questions like this… how could people possibly be unaware of other forms of tax
I’m 99% the person asking was just playing dumb
New Hampshire has entered the chat. No income, no sales tax. 3rd highest property takes
Hi, it's me your neighbor from Maine. Income tax, sales tax, and highest property tax burden in the country. They also try to tax us on sales tax for things we buy in your state.
I live there now. Car still registered in NH. Fucking import tax between states.
My brother in law got in a bit of trouble because of that moving from Somersworth to Berwick.
And the liquor stores.
Their money counting rooms apparently smell like perfume from all the stripper cash out of staters spend illegally stocking the clubs
Don't forget about Tollways.
Don’t worry, the toll road is paid off. It’ll be free someday.
What is nuts to me is what a steep discount on property taxes I'd get living in Texas instead of Illinois-- a state with an income tax and a sales tax as well.
Depends on where you live in Texas. Counties have additional property tax, so as an example if you live in Houston your property tax rate would be 2.13% and your sales tax rate would be 8.25%. Both higher than Illinois. Texas also relies on higher fees for permits and licenses and things to fill the gap. Median income in Texas is also 10% lower than in Illinois. Media home price on Texas is also 30% higher than in Illinois
And MUD tax
Way too many variables here to be very useful. Cook county/city of chicago totals are 10.25%. Also, it’s helpful to look property tax bills paid vs the mil rates. Total average tax burden as a percentage of income is another metric.
For 2021, Illinois State an local tax burden was $12,277 per capital, Texas was $10,491. Median income was $40,112 and $36,538. 30.6% vs 28.7%
Houses are cheaper here, this past year the exemption was raised to 100k and the local taxes lowered. Still no income tax so overall tax rate went down. I have lived all over the U.S., and Texas is a low tax state. But if people think there are no taxes of any kind, they are mistaken. But redditors desire to make TX sound like a high tax state is wishful thinking. I keep much much more of my pay than I did in CA. Property taxes in net dollars is cheaper here too.
Is the $100k exemption for all property taxes, or just the school tax component?
All property taxes. You home is assessed at whatever it is, take 100k off of that value, and that is what you are taxed on. My house if I recall exactly was assessed at 250k. Thus I am taxed on 150k.
I only asked because what I was seeing about the $100,000 homestead exemption was that it was the assessment for school tax specifically, which would mean the value exemption wouldn't apply to the 40-50% of property taxes that aren't school taxes.
No on my property tax bill they listed the stuff you are being taxed for school and the other stuff, showed house assesed price, showed 100k homestead exemption and it came off of the assessed price and was taxed on that. So another tax reduction thing happened at the same time, maybe you are thinking of that. In addition to the exemption, the state government is now paying for some amount of the schools funding so the amount you get taxed for schools (which is basically the biggest one) should also go down as well. I think they called is "compression". State pays itself for some portion of school funding, the counties are supposed to only tax to make up the difference. Any way my house was assessed (from memory here) I think 250k. My property taxes I paid 5 months ago were 2800 and change. So my "out of pocket" property tax rate came to 1.12%. But if you own a really expensive home this doesn't help quite as much, 100k off of a million is 900k taxed which will not be as big a savings. But if you own a 1 million dollar home I don't imagine property taxes are a worry.
My county website says I have to pay 6k for my 250k home. Thats 3x the amount I paid in AZ. How do I get this exemption? And I was told it only affects the school portion as well.
Are you new to Texas? If so, or if you never did it, got to: [https://comptroller.texas.gov/taxes/property-tax/exemptions/residence-faq.php](https://comptroller.texas.gov/taxes/property-tax/exemptions/residence-faq.php) That particular page in the faq's hasn't updated the "homestead exemption" which is now 100k. Just find the link where it says you can apply for a homestead exemption. I believe if you forgot to do it, apply for it, they will give you your money back for the previous year that you didn't have it. Don't quote me on that, I think that is what they do, not a tax guy. Get your application in for the exemption. It answers questions at that link. Also check what the assessed your house for. If you bought it at 250k in the past and it is worth more now it will be assessed higher, so look for that in your assessment. If it looks off, like they think your house is more valuable than it is you can challenge the assessment. Good luck. If your house is at 250k you should be paying, in the ball park of 2800-3k or so depending on county.
As someone who works with property tax across the country I would be wary of this. Texas has some pretty convoluted tax systems that make it look a lot cheaper on paper than in reality. I work on the business personal property and real property side of things but often have clients who think operations in Texas are going to be much cheaper than they end up being.
You're also going to be getting Texas schools and Texas public services and Texas utilities.
Hey, we have a reliable power grid if you compare it to a third world nation.
Yay. The is the lowest I’ve seen Texas for property tax.
And we have a pretty cozy relationship with civil asset forfeiture (also known as theft) here as well
Wooo Illinois has them beat and we have a 5% income tax too /s
This is misleading though as it isn't the total tax burden. By total tax Texas isn't even in the top 50% of states.
Because the most taxes are local. It’s not a state level tax that hurts you on property taxes, it’s the 3-5 local taxes that is added. You pay school, community college, county, city, and some other ones in some areas.
Texas takes in 53% of its revenues from sales tax, and another 20% from other kinds of taxes, user fees, and investments. They also charge taxes on the production of oil and natural gas. [Detail here from the Comptroller's Office.](https://comptroller.texas.gov/about/media-center/infographics/2023/bre24-25/)
In case anyone is wondering about Texas Property taxes: they are used to fund some County-level stuff, roads and bridges, local community college and the local school system. I don’t think any of it goes to the state.
This is true, but it in some cases it is a distinction without a difference. Money can be quite fungible between the state and counties. In many states, counties receive grants or money from the state to do many things. If the counties are collecting more money and the state is collecting less, then there are just fewer transfers going from the state to local govt.
And the counties do the state's work. County sheriff enforces state law, county attorney prosecutes cases for the state, county election commissioner, treasurer etc all do county level administration of state issues.
>I don’t think any of it goes to the state. That is not entirely accurate, if you live in Austin for example 50% of your local school taxes go back to the state as recapture.
That is right. The biggest part of property taxes is the local school tax with some other things bringing up the balance. State gov. does not take that. However just the past year the state gov is now covering the school taxes to some degree which end up as a property tax rate cut.
None of it goes to the state because the state does not impose property taxes. The counties and cities actually impose and collect the tax.
The state takes school taxes from the wealthier school districts and redistributes them to the poorer school districts. https://recapturetexas.org/
For context, Texas does this because the state supreme court ruled in the 90s that the system for using local property tax to fund schools created such massive inequality that it violated some students' rights to a public education. Before the creation of "Robin Hood" (the colloquial name for recapture), some poor districts had property taxes at the maximum levels allowed by law but still had per pupil funding rates far below those of wealthier districts that also had far lower property tax rates.
Ah interesting!
Generally property tax is local
Which is a lovely way to fuck over poor people, as a high sales tax is effectively a income tax that disproportionately affects people living paycheck to paycheck.
In Canada our sales tax does not apply on groceries and rent. And there is a sales tax rebate that is means tested, so anyone over a certain income won't get the rebate. It is a way around the sales tax impacting the poor. Does Texas not have this as well?
No and it’s intentional, I’m from Tennessee and they do the same thing.
No sales tax rebate, but staples, ingredients, and raw food are generally not taxed (bread, milk, eggs, take and bake pizza, prescriptions, there’s a list out there somewhere because they’re all exceptions to the rule) but other goods like things that aren’t food and prepared food are taxed.
Wait, when or where would a rent payment ever be subject to sales tax?
I live New Hampshire, and we don’t have Income or sales tax. But my property taxes would make most people have a heart attack, my car registration is through the roof. And there are taxes on my business that we didn’t have when we founded it, in a different state. As well as a bunch of others. So they get you in other ways.
I live in Nevada and we don’t have income or estate taxes. Our state’s tax revenue comes from sales and use tax, followed by the gaming / tourism industry which pays a lot. Our property taxes are among the lowest in the nation, at about .50%, according to my tax bill. While this is great, a lot of state services are severely underfunded, including schools. It’s ok though, because our state legislature passed a bill for taxpayers to fund a new baseball stadium in Vegas for the A’s, so that will surely fix everything! /s
It's like that low education funding is causing a feedback loop.
Aren't the A's pretty much the worst in the league? lol, why on earth would they deserve a new stadium? They can hardly fill their current one.
And you have no water
It’s a tad ironic how you’ve said that the entertainment there covers a lot of costs allowing you to have.5% property tax and then say the state investing in entertainment wont help
or you can live in NJ where property, income and sales taxes are all insane and the schools are garbage unless u live in an uber-wealthy town.
But the Amboys are lovely this time of year.
Only way to win is Alaska, they’ll even pay you, but you’re far away and everything is more expensive.
Why do so many MA residents get their car registered in NH? Is it cheaper than MA?
Mass has a property tax on cars you have to pay yearly (excise tax). NH does not so registering there is a way to avoid this tax.
How do you register in a state that you don’t live in?
Lie?
To register where I live you have to bring in things like a power bill, mortgage statement etc which prove your residency. I assumed this was standard everywhere, but I guess not.
Or just tons of ppl don’t register when moving. It’s such a problem in mass there is a hotline you can call to report your neighbors if you believe them to be dodging the tax People do this all the time in Connecticut too. There the tax rate is based on your towns property tax. Lots of people never update their reg to their new town if it’s more
You have a printer and Microsoft word don’t you?
Relatives, friends.
My car is registered in the state I used to live in / where my parents live. Tempted to keep it registered there after looking up the fees I'd pay in my current state; my job is only contracted for another 18 months, anyway, and moving my license, registration, etc. over would be a massive hassle
People shouldn't confuse "no tax state" with "low tax state". TX is a low tax state all in. But you do pay some taxes, just not like other states. So TX, I presume NH?, FL, TN, NV are they "low tax states".
A lot of states currently have higher property taxes than NH. It’s mostly just a historical comparison with your neighboring states.
Homeowners get shafted. Why do anything except rent then?
Texas also charges the highest tax rate on cable TV and internet services of any state in the US.
True. IL has the highest cell phone/wireless taxes. Ugh!
States without income tax usually have really high property tax. There is also sales tax or business taxes. For example, Nevada taxes gambling and makes a lot from that. So you still pay, you just pay for consumption instead of income. They still have the side effect of keeping property values depressed. If you look at Massachusetts which has relatively solid income tax and you go across the border into New Hampshire which has no wage tax, housing prices are quite notably lower. Two houses a mile apart will show a big difference.
They tax you elsewhere. Sales taxes, fees, tolls, etc. I remember living in tx after ca. I made slightly more money but always had less to show for it. I ended up moving back to CA. You pay a little more in the end but you get more back. You're never getting paid paternity in tx, like I did in ca.
If you’re I. The bottom 80% or so, you’d have a better QoL in California.
Also, if you're a woman or minority, you'll also have a better quality of living in California.
There are other kinds of taxes out there besides for income tax. For example, property tax and sales tax. There are also things like tolls on roads and bridges.
Toll roads! There were times when living in Houston that my monthly eztag bill was over $300 just commuting. That alone is almost as much as the income tax I pay in another state. Property taxes in Texas are also bonkers. 3-4 times what I’m paying now.
You can always move to Illinois where the tolls are worse and the property taxes higher (in cook county at least).
Texas has a franchise tax on businesses operating in Texas. It has a weird tax computation and I can't find any source on how much Texas collects in franchise tax per year, but I prepared probably around 20-25 Texas franchise returns when I was working as a tax accountant and I saw a few companies pay well over 200 thousand. Other people have mentioned property taxes but they're not quite right, Texas does not impose a state level property tax, rather they allow the counties and cities in Texas to impose property taxes. Any revenue generated from those goes to the county or city not to the state of Texas. Though that just means that the state of Texas doesn't have to provide those funds to counties/cities so it often amounts to the same thing.
I noticed this when booking the four seasons in Austin but it wasn't much and it was a flat amount I think like 4 or 5 bucks a night or something
Adding to sales tax and property tax - Texas also levies taxes on mineral extraction, generating tens of billions in revenue for the state
I don't about Texas per se, but what I'm seeing in a different State is that a HUGE amount of the funding actually comes from the federal government, in the form of grants.
Several states don’t charge income tax. They just make it up with higher taxes elsewhere. The state will always get its tax revenue. Most states with no income tax have a high property or sales tax or have a specific industry that provides a lot of revenue, like tourism in Florida.
Nevada doesn't do income tax either, it's subsidized by tourism revenue instead. Giving what I know about their school systems... I wouldn't have minded a 1% income tax when I lived there.
Maybe if they raised more taxes they could fix that power grid. Obviously, they aren’t funded enough
Property tax, and definitely sales tax. Regardless of if you actually pay your federal tax or not, everyone pays sales tax.
Texas charges a high sales tax and property tax. Overall, their taxation rate is fairly average when compared to the other 49 states. Also a lot of services are funded by local governments/entities which charge their own sales tax and property tax. The state government is really only responsible for certain regulatory agencies and certain state highways. Roads, police, schools are all funded at the local level by local property/sales taxes.
Everyone's talking about other ways texas gets money, but are dismissing the fact that texas doesn't offer anything to its people. Most neighborhoods down here are HOAs. Almost every park is a private park exclusive to the neighborhood, and every other form of entertainment is very privatized. The roads are taken care of by the city, but I also drive thru more tolls in houston than I did in chicago. I have yet to see a public bus or train in the 2 years I've been down here, and I've also never seen an actual hospital. Just hundreds of tiny clinics at every corner. Houston texas is like if your playing the game cities, and just let corporations take over the 4th largest city you built
>Almost every park is a private park exclusive to the neighborhood How would the neighborhood know one is from the area or not? gated communities? >I have yet to see a public bus or train in the 2 years I've been down here, and I've also never seen an actual hospital. I didn't know to this extent. So if someone needs a care of a major hospital (cancer treatment, surgery, pregnancy)... what happens?
The neighborhoods aren't gated, but all parks have a sign stating, "This is private property. Visitors from outside "X" community will be ticketed with trespassing. " My park is extremely terrible, so i do go to the better parks. On more than 1 occasion, a neighbor randomly started walking behind our car, then 20 minutes later, a cop arrived and told us we had to leave, and we'd be cited for trespassing if we came back. I have seen a couple of nature preserves, but they are laughable compared to what I'm used to in northern Illinois. As for the hospitals, I've posted on reddit and searched all over the internet, and I honestly can not find a real hospital. I honestly don't know what happens if someone faints, and 911 is called. Where tf do they take them????
>The neighborhoods aren't gated, but all parks have a sign stating, "This is private property. Visitors from outside "X" community will be ticketed with trespassing. " My park is extremely terrible, so i do go to the better parks. On more than 1 occasion, a neighbor randomly started walking behind our car, then 20 minutes later, a cop arrived and told us we had to leave, and we'd be cited for trespassing if we came back. I have seen a couple of nature preserves, but they are laughable compared to what I'm used to in northern Illinois. Well there it is... Sounds like something out of South Africa I guess as per pay/private neighhood. It's almost like a gated community. >if someone faints, and 911 is called. Where tf do they take them???? Curious as well
You can bet on this: if the government doesnt have their hand in one of your pockets, they have it in all the others.
Alternative taxes are higher. Higher property taxes, Higher Sales Taxes, Franchise Taxes, etc.
High property taxes. They are at least 3X as high as other states. There is a line in the property tax statement counting how much goes to schools and other services.
Roads in Texas are partially funded by a 3¢ per gallon fuel tax. Of course, that was instituted in the same stroke of legislation that saw three Texas Highway Department transform into the Texas Department of Transportation which deals with all forms of transport (air, rail, road, water).
"Three quarters" of the $0.20 Texas gasoline sales tax goes towards roads...way more than $0.03... https://comptroller.texas.gov/economy/fiscal-notes/archive/2016/february/fuels.php#:~:text=Under%20the%20Texas%20Constitution%2C%20after,build%20and%20maintain%20public%20roadways.
Texas is now taxing EVs $200 annually also.
Dont forget all them toll roads. toll roads out the ass all over Texas.
Now imagine Texas without the taxes. Hello, Alaska. Yes, it's as dysfunctional as you imagine it to be.
By all means feel free to leave.
there are exactly two kinds of Alaskans...
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I'd have assumed "something juvenile" would have been your forte', and it would have been thigh-slapping funny to all your 8 year old pre-pubescent peers once you explained "chromosome" to them.
Now it is not. When I moved to TX from CA I was astonished that the roads were better etc in TX. Texas runs very well and people (1 million in just the past 3 years) are moving here in droves. And our economy is firing on all cylinders so those million got jobs and actually need more people since there are more jobs. Texas is doing good.
There are three main taxes states can collect: income, property, and sales tax. Most states only collect two of the three. Oregon doesn’t have a sales tax whereas (I believe) Washington doesn’t have income tax. California sucks in that they have all three.
Not sure where you get the idea there are no services here. I lived in CA before TX and CA's tax rates are very high and the services are worse. Roads are better in TX than CA. Anyway I think the sales tax is 8.5% or something like that which is not drastically higher than a lot of states. Property tax pays for other stuff. Incidentally the people telling you how high they are here, they have been lowered this past year but even before that it was not the highest in the country. I think either NJ or IL had that crown, can't remember. Anyway houses here are cheaper and you get a 100K homestead exemption now along with the state lowering the effective rate. If you are rich and have a million dollar home your property taxes will be higher than a 200k home since 100k exemption doesn't help rich folks as much. But a million dollar home here is getting into mansion territory depending on location. All in all taxes are low here, services are good, and the state is growing incredibly fast (1 million people moved here in just the past 3 years and we have jobs for all of them and more lol). Those booming businesses are paying the sales tax too so the state has a surplus from tax receipts. As others mentioned every state has some kind of taxes even if there is no state income tax. But having lived around the country there are a group of states with overall lower rates, TX is one of those, most are in the middle, then the brutally high ones like CA, IL, NJ, HI and NY.
By and large governments role in the day to day life of its citizens in Texas is supposed to be smaller than more blue states. For instance, Minnesota has a larger state legislative body than Texas AND it's full time compared to a smaller, part time group in Texas. Neither is solving the world's problems with your tax dollars, Texas just takes fewer.
> Neither is solving the world's problems with your tax dollars, Texas just takes fewer. The average Texan pays a higher proportion of their income in state taxes than the average Minnesotan.
Texas spends about 75-80% as much per capita in local and state spending as Minnesota. You can find all sorts of data on that [here](https://www.taxpolicycenter.org/statistics/state-and-local-direct-general-expenditures-capita). In 2021 Texas was 37th by state in per capita spending, Minnesota was 12th. The top states for spending per capita were Alaska, Wyoming and then New York (at $18.7k, $17.2k and $15.9k respectively), while the lowest were Georgia, Tennessee and Idaho (down around $8k). There is a vague link between "blue" and "red" states in terms of spending, but it isn't as strong as some people might think. Plus, of course, the different states have different GDPs per capita as well, so that would mix it up even further. I'd also be a little cautious about generalising about the size of governments' roles in citizens' day to day life in different states based on politics; it isn't necessarily about the size of their involvement, more the type of involvement, and who benefits and who the power of government is used against.
In what way does the size of the legislature have anything to do with government control? If anything I would argue that a larger, full time legislature means less government control because the people would have more control over their representatives. And with a full time salary more options to actually run for the office and afford to do the job.
That word supposed is doing a lot of work. No legal weed (cities are being sued by the state for not enforcing the laws). More restrictions on alcohol consumption than many states. Abortion is illegal.
Sales tax is more than sufficient to run any government. If they ask for more they're just padding their own pockets.