this post was submitted on 27 Apr 2024
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The “Texas Miracle” loses some of its magic as Oracle announces it’s moving its new HQ out of Austin and Tesla lays off nearly 2,700 workers.

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[–] mosiacmango@lemm.ee 2 points 6 months ago* (last edited 6 months ago)

The fact that Californians make more money overall than Texans is still irrelevant. On a percentage basis, almost all Texans are taxed more in their state than almost all Californians are in theirs. High earners in California are taxed at a much higher rate than high earners in Texas however, which is where that extra tax revenue is coming from.

You can go to the source of the data I initially linked if you like and compare the states directly:

Texas

California

Here is a more recent article of theirs talking about how almost all Californians still pay lower taxes then Texans

Heres an excerpt that addresses your qestion above:

For families across the bottom 80 percent of the income scale, California’s overall tax rates are within 1 percentage point of the national average. The difference between California and other states is somewhat wider for upper-middle class families and is widest for families at the very top of the income scale. Only the top 5 percent of California families pay tax rates that are more than 2 percentage points higher than the national average.

A comparison to the nation’s second and third largest states—Texas and Florida—yields even more jarring results. Despite these states’ reputations for having low taxes, California has lower taxes for its bottom 40 percent of earners than either Texas or Florida. In the middle of the income scale, these three states’ overall tax rates are all within 1 percentage point of each other. The story is reversed at the top of the income scale: Texas and Florida are undoubtedly low tax for the rich.

While most other states tax their wealthiest families at lower rates than any other group, California has a flatter tax distribution where the rich are responsible for tax rates similar to those paid by other families. This policy choice—achieved through a mix of higher tax rates at the top and refundable credits for lower-wage workers, among other measures—largely explains why California has some of the most robust tax revenue collections in the nation.[2] Taxpayers at the top of the economic scale enjoy a large share of overall income and, as a result, taxing them at higher rates leads to comparatively higher revenue collections without requiring especially high tax rates on most families.

The 20 bil in extra tax revenue you asked about with just 1/3rd larger population than Texas is from taxing the ultra wealthy at the same rate as other families. Since they have the most income by a ludicrous amount, taxing it at 12% instead of 3% like Texas nets a huge amount of money.