A primary reason Texas has people moving in to avoid taxes. Texas has no State income tax.
This is turn means other taxes are higher to compensate, just like States with no sales taxes, or property taxes, etc. The money to run things has to come from somewhere, if spread out across multiple tax sources then each individual source is a smaller percentage. If you remove one of those tax sources, then others will need to be higher to compensate.
People don’t think about that though, they just see that there’s a specific tax missing and think they’ll have fewer taxes taken overall. Which could be true, or not depending on how the state’s tax revenue is structured and if own property that has a higher tax rate. For instance, gas taxes on fuel may be higher, and if you have a vehicle with poor mileage, you’ll be paying more than you would otherwise. But most people aren’t paying attention to the “hidden” taxes that are just embedded in everyday prices. Do you know what the tax rate added to a gallon of fuel is in your State? I doubt it. But you probably know what the sales tax rate is, or close enough to estimate for purchases at least.
To be honest, TX probably has fairly low fuel taxes though since they have a massive oil business, but the example applies to most sales taxes, regardless of the type of sale/purchase it is.
I was gonna say, it’s usually the property taxes that make up a significant part of the difference.
Which in turn also means higher rent charges by landlords, so renting doesn’t even really mean you avoid it, it’s again just obfuscated in a different payment so you don’t see it.
A primary reason Texas has people moving in to avoid taxes. Texas has no State income tax.
This is turn means other taxes are higher to compensate, just like States with no sales taxes, or property taxes, etc. The money to run things has to come from somewhere, if spread out across multiple tax sources then each individual source is a smaller percentage. If you remove one of those tax sources, then others will need to be higher to compensate.
People don’t think about that though, they just see that there’s a specific tax missing and think they’ll have fewer taxes taken overall. Which could be true, or not depending on how the state’s tax revenue is structured and if own property that has a higher tax rate. For instance, gas taxes on fuel may be higher, and if you have a vehicle with poor mileage, you’ll be paying more than you would otherwise. But most people aren’t paying attention to the “hidden” taxes that are just embedded in everyday prices. Do you know what the tax rate added to a gallon of fuel is in your State? I doubt it. But you probably know what the sales tax rate is, or close enough to estimate for purchases at least.
To be honest, TX probably has fairly low fuel taxes though since they have a massive oil business, but the example applies to most sales taxes, regardless of the type of sale/purchase it is.
Property taxes and municipal utility district fees in Texas are crazy and they go up annually.
I was gonna say, it’s usually the property taxes that make up a significant part of the difference.
Which in turn also means higher rent charges by landlords, so renting doesn’t even really mean you avoid it, it’s again just obfuscated in a different payment so you don’t see it.