this post was submitted on 27 Apr 2024
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It’s an odd argument, but I think it comes down to sales tax and property tax. Property tax is high in texas, and sales tax is 7% (not the highest in the nation, but high, and local sales tax can also run 1-2%). I think the theory is that you only pay so much sales tax in goods for one person, so it balances out california’s higher property taxes.
That makes zero sense.
Cali sales tax is 7.25, Texas is 6.25
Poor people likely don’t own property, but yeah it’s about double in Texas.
Income tax in Cali ramps from 1% up slowly to 9% at just 68k/yr. But even lowest income pays 1%. Texas is 0%.
The argument has no merit. None. California appears to have objectively higher tax on most people, and certainly on all those who don’t own property.
What am I missing?
Landlords pass on higher property taxes to their tenants in the firm of higher rents. You don't need to own property to be affected by high property taxes.
Ok, then we are getting into estimated tax derivatives. Yeah I can’t just make guesses there.
That’s not direct tax.
But I agree there could be something there. It would be minimal I’d assume but I truly don’t know.
Texas has a base sales tax of 6.25, which can be raised by local taxes up to 2%. So it is effectively 8.25% everywhere.
Ok? But that income tax is huge…
I hadn’t considered the fact that some people make money under the table and/or illegally. And this pay not income tax in either state, but a ton of sales tax.
I highly doubt a large amount of that in a 2% local sales tax county is what causes this. If so, that’s crazy.
I feel part of the confusion may be thinking california has a flat tax? It has tax brackets, which increase the percent as you make more.
Yeah, starts at 1%, hits 9% by 68k income. I’m not misunderstanding that. Not seeing how 1% < 0%.