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.”
No no. Just seems blue states seem to do more for them than the red states do. That’s all. Nobody is advocating forced moves but if I were in such a situation the politics of the state and the services available would be paramount to my choice to where to go as well as the opportunities for fair housing and good jobs.
Isn’t his wife’s family in commercial property? So he’d be naturally aligned in favor of building housing any place they have commercial property. Not “affordable housing” which is a tax that makes less construction happen, but cheaper housing for everybody.
It doesn't help, but I doubt he's single handedly responsible for the housing crisis in California though.
There are many things that cause housing in California to be expensive (proposition 13, rent control, the excessively bureaucratic processes for building additional housing, single use zoning, etc.), and all of them need to be addressed.
Not even just housing. Everyone in Texas is freaking out about current electricity pricing going sky high to ~14c/kWh.
What's the rate you'll get from PG&E again?
Gas is ~$3.45/gal around me. Looks like gas around LA is ~$4.79/gal. $1.34/gal difference at the moment. A 25mpg car going an average 13,500 miles in a year, that's $723 more expensive in CA than TX right now. According to their data, the difference tax rate between the two is like 2.5% for the lowest group. 2.5% of $20,900 is $522.50. So congrats, you paid less in taxes but ended up paying $200 more in the end just factoring in fuel cost differences.
Not to mention the externalities that don't fall into taxes. E.g. If you are poor in a red state and you get caught with pot, that's going to hurt you pretty bad. If you want an abortion, now you need to travel to another state. If you want an education from a stronger public university system found in blue states, now you pay out of state tuition.
California is not better for working people because the cost of living is higher, in aggregate -- counting taxes together with everything else. You may be paying less property tax indirectly when you pay 3000 USD/month for a studio that would be less than 1500 USD/month in Texas; but you're paying massively for policy decisions around land use, permitting and zoning.
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.
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.
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.
>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.
In general yes, but I think Prop 13 complicates matters, because it's not just a lower tax rate, but rather applies unequally to different properties based on their transaction history. (e.g. a property built or sold recently gets high taxes, while one that's been unchanged remains low)
So we can divide the rental market into high-tax and low-tax properties. The landlords of high-tax properties must incorporate the tax into the rent. Meanwhile, the landlords of low-tax properties can set their rents just as high, since they compete in the same market, and pocket the tax difference.
In contrast, a flat property tax reduction would increase the profit margins of all landlords equally, and any one of them could start undercutting the others and be undercut in return, which over time in an efficient market will tend to lower prices back to a similar margin before the tax reduction.
It's primarily an indirect effect. Landlords won't buy/build new houses if the expenses would be too high relative to the rent the market is willing to pay. That lowers the supply and raises the rents in the long term. However, if you have an existing property, there are no guarantees that you can find a tenant who is willing to pay enough to cover your interest, taxes, and other expenses.
There's good empirical evidence that the portion of property taxes that falls on the unimproved value of the land (ie, the location's value minus the value of the building), is not passed on to the renter:
Not if the tax is specifically on the unimproved value of land (i.e. property value minus buildings or other improvements). Landlords are already charging as much in rent as they can get away with; raising rent even further would increase vacancies - and a land value tax would directly penalize keeping units vacant.
Sure if we change the way that property tax is assessed then it’ll no longer be true that renters are indirectly paying property tax. But that’s not relevant to the thread topic.
It's very relevant to the thread topic. If the goal is to minimize the regressiveness of our tax system, then a land value tax is very hard to beat. The only one better from a wealth redistribution standpoint is maybe a wealth tax, but unlike other forms of wealth you can't exactly move land to an offshore account.
Some percentage of property taxes (and the savings from lower property taxes) will be passed through to the renter in the form of higher (lower) rent. That percentage will be between zero and one. What is your justification for asserting that percentage is exactly zero?
I'd argue that this percentage is near-zero in high-demand places like NYC and the bay area. Rent is simply set at what the market will bear. For example, during the height of the pandemic, landlords had no choice, but to significantly lower their rents in NYC even if they had to do so at a loss.
Sales taxes usually are not applied on some items like food. Corporate taxes are usually on all corporations regardless of their industry (excluding charities).
So in Northern California, if you cross the Bay Bridge or the Golden Gate Bridge as part of your daily commute—assuming a 5 day/week workweek in the office for historical purposes but as a caveat, this may be inaccurate in the present—you can easily spend between $1500 and $2K/year in bridge tolls.
BART is also an option, but is in the same ballpark at about $1500-1700 depending on how many days of the year you work and that’s assuming a West Oakland to Embarcadero commute so it only goes up from there if you live and work further from those stations. Maybe you end up not having to pay for parking on the other side though if you live near the station, although some people end up having to pay for parking at a BART garage.
Yes but you don't pay for gas/maintenance/depreciation/accident risk you take BART. At the IRS rate that works out to about $5/day just for the length of the Bay Bridge, not including any extra driving on either side. Driving is expensive.
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.
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.
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.
> 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.
This is present in some form in almost every state, the states vary in how they penalize switching to development (some require timber land to be dedicated for 30 years, others let you switch whenever you want).
> Description: Annual timberland property tax is based on its current use. Standing timber is exempt from local ad valorem tax system and instead is subject to a state tax at the time of harvest. The revenue generated from timber yield tax is collected by the State Board of Equalization and then is distributed back to the counties where the timber was harvested.
In addition to the point of this thread (overall tax incidence of the wealthy), surely you can see the difference in reduced taxation of property being used for timber and Michael Dell avoiding $1M/year in property tax by claiming his massive estate in the suburbs of Austin is an agricultural property because they 'maintain a deer herd'? Or companies claiming parts of their campus are "agricultural" based on a few head of cattle who are brought in to graze it? Why on earth should the rest of Texans subsidize Dell or HP's campus?
California has its own screwed up property tax policy - all of Prop 13 should be immediately repealed - but it's different in impact and abuse potential than Texas's ag. nonsense.
It was in jest. But, still -- do people in transit not deserve representation? Casting a ballot for a US Congress seat before you depart does not seem dishonest to me; especially if you cannot vote in the destination locale yet.
Tax revenues are fungible. The government might like to claim otherwise, but push comes to shove and emergency funding is needed, it will come from somewhere.
i seem to remember the roads in Los Angeles were pretty bad, but most of the sf bay area is pretty good, so a lot probably depends on the income and (in)efficiency of the city that maintains it
Posing a question with a lot of assumptions baked into it isn't really a great way of starting a conversation. Are the roads in Texas under-maintained? Is that under-maintenance significantly different from other states? Then finally, are income taxes what usually fund roads?
All of these things are assumptions built in to your question without having any real evidence of those things necessarily being true. Personally I don't have the answer to those questions, but one shouldn't begin their research making a lot of big assumptions which may or may not be true.
I had a rental car wheels bottom out on a road in Highland Park (Dallas). Scraped the air dam all up. Hertz didn't care. It's one of the richest areas in TX. Great public school though.
Spanish toll roads are nice too, if you can afford them every day.
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.
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).
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.
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.
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.
> A quick look at Redfin says tax on this $385k home is about $564/mo
The tax estimate is based on an assessment based on a sale that happened 6 years ago, which ends up valuing the house at $100k (roughly 25%) less. :-) A new buyer would have a hard time paying the same tax because this would involve successfully arguing that the property is worth $100k less than what they just paid for it. $800/mo is likely in the ballpark of what the new owner would be looking at.
EDIT: Since millage rates are public, we don't have to guess. The topline Austin (Travis County) millage rage is 2.1767, so if that property were in the city of Austin its taxes on a $385k assessed value would be 8,380.29, or $698/mo. It may actually be in Pflugerville (hard to tell at a glance) where the taxes are lower due to letting Austin taxpayers pay for the big shared muni services.
The other effects are interesting, but my experience living in TX is it is definitely not a low-tax state.
Sure, but if you're going to compare taxes you have to compare the effect of Prop 13 on property valuations, as that's basically a tax but with the revenues going to existing property owners rather than the state.
> but my experience living in TX is it is definitely not a low-tax state
Dunno, I'd take property taxes (i.e. taxes on consumption of real estate) over income taxes. Particularly since income taxes are progressive whereas property taxes are a flat percentage. Even if I paid $2k/month in additional property taxes, the difference in income taxes would still make TX cheaper.
Including prop 13 as a tax is extra, like including private school as a tax in places where the schools are bad. Possibly relevant to cost of living, but not a measurable tax.
The killer with high property taxes is that you have to keep earning more as your property increases in value, or there is a real risk of you falling behind. Similarly if you are ever unemployed you might prefer a tax proportional to your income. Obviously this also makes retiring early even more difficult. But there’s a system to suit every need, I guess.
> The killer with high property taxes is that you have to keep earning more as your property increases in value, or there is a real risk of you falling behind
That's a feature, not a bug. The entire reason California's real estate market is so dysfunctional is that people are disincentivized from selling due to Prop 13, so you have people living in oversized houses paying a tiny fraction of the property tax their neighbors are.
You "falling behind" means someone else gets a fair shot at living in the area without being disadvantaged by a 10x higher property tax.
Ideally the property would never increase in value in the first place, because we'd build enough housing to prevent that.
>Ideally the property would never increase in value in the first place, because we'd build enough housing to prevent that.
This is the key takeaway from all of my experiences reading about and owning property. We'd all be much better off if we built a ton more housing, but that doesn't fall within the Overton window and so likely will not happen.
> The killer with high property taxes is that you have to keep earning more as your property increases in value, or there is a real risk of you falling behind
Not if the municipality has a fixed budget and all property values are rising in the municipality. The mill-rate changes so that you only pay more taxes if your property has gone up relatively more than other properties in your municipality. See thread here: https://news.ycombinator.com/item?id=32528916
Also if your property value has gone up, you have gained equity, so that may offset increased taxes (depending on divers factors).
In an area where property values are rising, other costs typically increase as well. Municipalities can't often provide the same services on a fixed budget any more than businesses can do so.
> Also if your property value has gone up, you have gained equity, so that may offset increased taxes (depending on divers factors).
This doesn't help unless you borrow against the increase in equity. Otherwise it just means less money in your pocket monthly.
>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.
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.
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).
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.
> 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.
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.
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.
It is lazy journalism only insofar as the journalist did not eliminate the blogspam by linking to reddit rather than the underlying study. Which is annoying, sure, but does not invalidate the conclusions, and the root comment seems to carry a connotation that the conclusion is not trustworthy on the basis it came from a public forum and not an authoritative source, when really it's just one degree removed.
>and the root comment seems to carry a connotation that the conclusion is not trustworthy on the basis it came from a public forum and not an authoritative source
Right - because reddit is not inherently trustworthy (even though there are subject-matter experts that post there)
> when really it's just one degree removed.
Hence, 'lazy journalism' (or the sarcastic 'quality journalism') moniker. They were just one degree removed from an authoritative source, and they didn't bother linking to either the reddit post, or the authoritative source (though hard to tell because of paywall)
The article is not using the Reddit post to support its position. The position support is in the paragraph below the graph from Reddit where it links to the source of the data.
All the Reddit post is there for is the handy graph it has that puts Texas and California side-by-side. In the source there are separate pages for each state so if you want a side-by-side comparison of Texas and California you have to make your own graph, or find someone who already did so and use theirs. I don't see anything wrong with doing the latter.
From another comment I gather there is a paywall that is stopping some people from seeing the full article. I wonder if that is cutting off the article right below the graph, so some people are not realizing that the article isn't based on the graph from Reddit?
This reminds of news channels quoting tweets by random Twitter users.
They could be real, or credible, but even if they are, if I see journalists directly cite Reddit/Twitter, I can't help but think the exact same thought: "Quality journalism right here."
It's about the lowest form of credibility one could possibly have. Quoting Wikipedia would be infinitely more credible, and even then, Wikipedia itself tells you not to use it is not a reliable source, and not to use it as such.
"The graphic is of data from the sixth edition of the Institute of Taxation and Economic Policy's "Who Pays" series, which tracks tax data for all 50 states and Washington, D.C."
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 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
> 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.
> 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.
I think this is a good reason to take this study with a grain of salt. Having lived in WA most of my life, I have never had a reason to complain about taxes here. They feel far from regressive - I basically didn't pay anything until I owned a home.
FWIW: back when Planet Money tried to find some sort of political consensus among economists, lack of an income tax was actually one of the proposals: https://www.npr.org/transcripts/499490275
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.
> 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.
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.
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.
WA was in prime position to take advantage of California’s missteps, if only it had not neutered its non compete ban by excluding people earning over $100k.
> Washington State is suing to block a natural gas pipeline to California, so California will burn filthy coal instead.
California's electric grid has problems, but burning coal isn't one of them. Coal represents 0.15% of electricity generation in the state and 3% of overall power consumption when accounting for power imports.
Also, coal isn't used for peaker plants, which is what California uses a lot of natural gas for. That service will be replaced by dispatchable storage and loads.
California has very few coal plants left, so the likelihood that it will replace that natural gas capacity with coal is very low. Please feel free to provide a citation for your assertion though.
The state isn't building new coal capacity at all. It's cheaper by nearly every metric to build renewables and storage than build new coal capacity, or just import natural gas from another source.
Is this a joke? Like, I agree taxes are lower for businesses in Texas, but you'd be hard pressed to say that businesses in California "don't work out". Isn't the entirety of Silicon Valley in, you know, California?
I actually did and its fine. Would I save a bit more money if I did it in TX? yes but I'm doing fine in California and I enjoy living and running my side business here.
> Drive out the businesses, and the tax revenue will dry up.
yes for Texas.
California is doing fine too cause different businesses want to be here for other reason and pay the tax for it and they are fine. I was not implying one is better than the other I was stating what was best for my situation and was glad I moved away from Texas.
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.
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.
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.
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.
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.
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.
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.
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.
> 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:
Methinks you may have picked these numbers to tilt things in favor of CA. If the income were _slightly_ more in line with what might be considered “reasonable” for a $1M house, like say $250K, suddenly the math makes
much more sense in Texas.
And this doesn’t even get into the whole “house that costs $1M in CA wouldn’t cost $1M in Texas” thing...
The point was to illustrate that a rise in home prices with stagnating wages, means the effective tax rate for an individual will only get worse under Texas's system, hence, regressive. Whether it's at that tipping point right now, I don't believe thats the case when comparing like-for-like income+property as you rightfully point out. As I understand the source data it also introduces sales/excise taxes which does make it tip over.
With more and more people moving to Texas, it's not unrealistic to see more $1M homes.
> And this doesn’t even get into the whole “house that costs $1M in CA wouldn’t cost $1M in Texas” thing...
People tend to buy the most house they can afford, not just the most house they need. If you have 1M for a house, you buy a 1M house in Cali or TX. Most wouldn’t move to TX and buy something cheaper, but instead something bigger.
I don't think this is accurate. The "no income tax, high sales tax" tax structure in TN/FL/TX/etc is intended to make sure poor people are paying high tax rates even when they aren't making much money. Thus somebody who makes less (and is forced to spend most of their money buying basic "things" needed to get by) will spend a higher percentage of their overall earnings on taxes than in states with lower sales tax.
In regressive tax states, tax revenue "per capita" may be lower (because you're leaving a lot of money on the table - you're letting the rich take home more) and you've de-facto shifted the tax burden to people who have less money to begin with. So a large percentage of the population ends up paying more in taxes - the people who make less and use most of their income for purchases - while the high income earners pay less. You simultaneously reduce the money available for government programs while penalizing the people who need those programs more.
Note: people on HN are likely to be the "high income" earners who benefit from such a tax regime. If you're looking to work remotely and are optimizing to this level - i.e., you are seeking out regressive tax regions so you can pocket more money - you might want to consider whether this is a moral choice you actually feel comfortable with.
If your point (and the article's point) is that sales taxes are regressive and that moving from California where Prop 13 locks your property tax rate to a new state with high property taxes is effectively regressive, I guess... okay. That's not really news to anyone or surprising. If you were not in California or Texas, but had to pick one to move to, you'd be better off moving to Texas at any income level at or above the federal median income. While the property tax rates are lower in California and can be locked in with Prop 13, the house prices are massively higher. You can buy a nice home in Texas for $250k in most of the state (not in Austin), and that same house in California would be minimum $1M. A smaller percentage of a significantly higher valuation is still a boatload of money.
Also, you are making a bunch of conclusions not in evidence. The evidence, at least for Texas, shows that the majority of tax revenue comes from high income earners, primarily because they're land owners who buy more expensive/larger properties and because they make larger purchases. The state gets its income from property tax and sales tax primarily, both of which are considered "regressive taxes". While you're correct that these taxes account for a larger percentage of income for someone with lower income, the net effect is that the majority of the tax burden is being paid by more wealthy residents. Generally the right thing to do for people in lower income brackets in states without income tax is to increase their income, since they aren't penalized for it. In other states, you get penalized for increasing income, and in many cases are completely out of reach of ever having property ownership. Average people own homes in Texas, average people in California rent forever.
Ultimately, I suppose it's a good thing for these sorts of analysis to occur because it's more information to consider, but I do think there's some insidiousness to the way this is framed both in the article and in many of the comments. I don't even live in Texas anymore, but I definitely don't want to see it Californiated. If you want to live in California and think it's a better deal, go live in California, don't demand that Texas matches the same tax regime.
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.
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.
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.
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.
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:
I worry that the ITEP study (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.
263 comments
[ 3.7 ms ] story [ 230 ms ] thread“ 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.”
There are many things that cause housing in California to be expensive (proposition 13, rent control, the excessively bureaucratic processes for building additional housing, single use zoning, etc.), and all of them need to be addressed.
What's the rate you'll get from PG&E again?
Gas is ~$3.45/gal around me. Looks like gas around LA is ~$4.79/gal. $1.34/gal difference at the moment. A 25mpg car going an average 13,500 miles in a year, that's $723 more expensive in CA than TX right now. According to their data, the difference tax rate between the two is like 2.5% for the lowest group. 2.5% of $20,900 is $522.50. So congrats, you paid less in taxes but ended up paying $200 more in the end just factoring in fuel cost differences.
I wonder what the point of piece like this is for. To dissuade people from migrating to Texas?
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.
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.
So we can divide the rental market into high-tax and low-tax properties. The landlords of high-tax properties must incorporate the tax into the rent. Meanwhile, the landlords of low-tax properties can set their rents just as high, since they compete in the same market, and pocket the tax difference.
In contrast, a flat property tax reduction would increase the profit margins of all landlords equally, and any one of them could start undercutting the others and be undercut in return, which over time in an efficient market will tend to lower prices back to a similar margin before the tax reduction.
http://gameofrent.com/content/can-lvt-be-passed-on-to-tenant...
Similarly, how is a corporate profit tax less regressive than a sales tax? Won't the price be passed on to consumers all the same?
So in Northern California, if you cross the Bay Bridge or the Golden Gate Bridge as part of your daily commute—assuming a 5 day/week workweek in the office for historical purposes but as a caveat, this may be inaccurate in the present—you can easily spend between $1500 and $2K/year in bridge tolls.
BART is also an option, but is in the same ballpark at about $1500-1700 depending on how many days of the year you work and that’s assuming a West Oakland to Embarcadero commute so it only goes up from there if you live and work further from those stations. Maybe you end up not having to pay for parking on the other side though if you live near the station, although some people end up having to pay for parking at a BART garage.
Transportation is expensive.
> Transportation is expensive.
Uhhh.... what?
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.
See https://www.timbertax.org/statetaxes/states/summary/wisconsi... for some examples or even California: https://www.timbertax.org/statetaxes/states/summary/californ...
> Description: Annual timberland property tax is based on its current use. Standing timber is exempt from local ad valorem tax system and instead is subject to a state tax at the time of harvest. The revenue generated from timber yield tax is collected by the State Board of Equalization and then is distributed back to the counties where the timber was harvested.
California has its own screwed up property tax policy - all of Prop 13 should be immediately repealed - but it's different in impact and abuse potential than Texas's ag. nonsense.
Though I guess it would be more “Texas” to instead establish a church or non-profit to hold the land for you.
But seriously - if any of y'all decide to go back to Cali please cast a vote in November before moving back ;)
While we are at it, taxes in Idaho are even higher. Also Idahoan bears prefer the taste of Californians too.
This is not my experience near Austin.
All of these things are assumptions built in to your question without having any real evidence of those things necessarily being true. Personally I don't have the answer to those questions, but one shouldn't begin their research making a lot of big assumptions which may or may not be true.
Spanish toll roads are nice too, if you can afford them every day.
https://news.ycombinator.com/newsguidelines.html
https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so...
i use badwolf[0] for quick paywalled articles.
[0] https://hacktivis.me/projects/badwolf
[0](https://archive.ph/NWhr0)
tl;dr: Top 20% pays less in taxes in TX than CA.
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).
Which is?
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
There are a handful of listings in the ~$300k range, where the property tax will run around $800/mo.
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/h...
The tax estimate is based on an assessment based on a sale that happened 6 years ago, which ends up valuing the house at $100k (roughly 25%) less. :-) A new buyer would have a hard time paying the same tax because this would involve successfully arguing that the property is worth $100k less than what they just paid for it. $800/mo is likely in the ballpark of what the new owner would be looking at.
EDIT: Since millage rates are public, we don't have to guess. The topline Austin (Travis County) millage rage is 2.1767, so if that property were in the city of Austin its taxes on a $385k assessed value would be 8,380.29, or $698/mo. It may actually be in Pflugerville (hard to tell at a glance) where the taxes are lower due to letting Austin taxpayers pay for the big shared muni services.
The other effects are interesting, but my experience living in TX is it is definitely not a low-tax state.
> but my experience living in TX is it is definitely not a low-tax state
Dunno, I'd take property taxes (i.e. taxes on consumption of real estate) over income taxes. Particularly since income taxes are progressive whereas property taxes are a flat percentage. Even if I paid $2k/month in additional property taxes, the difference in income taxes would still make TX cheaper.
The killer with high property taxes is that you have to keep earning more as your property increases in value, or there is a real risk of you falling behind. Similarly if you are ever unemployed you might prefer a tax proportional to your income. Obviously this also makes retiring early even more difficult. But there’s a system to suit every need, I guess.
That's a feature, not a bug. The entire reason California's real estate market is so dysfunctional is that people are disincentivized from selling due to Prop 13, so you have people living in oversized houses paying a tiny fraction of the property tax their neighbors are.
You "falling behind" means someone else gets a fair shot at living in the area without being disadvantaged by a 10x higher property tax.
Ideally the property would never increase in value in the first place, because we'd build enough housing to prevent that.
This is the key takeaway from all of my experiences reading about and owning property. We'd all be much better off if we built a ton more housing, but that doesn't fall within the Overton window and so likely will not happen.
Not if the municipality has a fixed budget and all property values are rising in the municipality. The mill-rate changes so that you only pay more taxes if your property has gone up relatively more than other properties in your municipality. See thread here: https://news.ycombinator.com/item?id=32528916
Also if your property value has gone up, you have gained equity, so that may offset increased taxes (depending on divers factors).
In an area where property values are rising, other costs typically increase as well. Municipalities can't often provide the same services on a fixed budget any more than businesses can do so.
> Also if your property value has gone up, you have gained equity, so that may offset increased taxes (depending on divers factors).
This doesn't help unless you borrow against the increase in equity. Otherwise it just means less money in your pocket monthly.
>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.
(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.
Quality journalism right here.
Also, OP isn't actually saying the information is wrong because its reddit, rather he's saying it's lazy journalism - which it is.
Right - because reddit is not inherently trustworthy (even though there are subject-matter experts that post there)
> when really it's just one degree removed.
Hence, 'lazy journalism' (or the sarcastic 'quality journalism') moniker. They were just one degree removed from an authoritative source, and they didn't bother linking to either the reddit post, or the authoritative source (though hard to tell because of paywall)
All the Reddit post is there for is the handy graph it has that puts Texas and California side-by-side. In the source there are separate pages for each state so if you want a side-by-side comparison of Texas and California you have to make your own graph, or find someone who already did so and use theirs. I don't see anything wrong with doing the latter.
From another comment I gather there is a paywall that is stopping some people from seeing the full article. I wonder if that is cutting off the article right below the graph, so some people are not realizing that the article isn't based on the graph from Reddit?
They could be real, or credible, but even if they are, if I see journalists directly cite Reddit/Twitter, I can't help but think the exact same thought: "Quality journalism right here."
https://old.reddit.com/r/economy/comments/wjkqdx/low_taxes_f...
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/washingto...
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,_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...
> 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.
FWIW: back when Planet Money tried to find some sort of political consensus among economists, lack of an income tax was actually one of the proposals: https://www.npr.org/transcripts/499490275
(In terms of tax policy. Lots of other areas leave much to be desired)
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.
There's a current bill working through the CA legislature that will shut down small time fast food franchises.
Maybe whatever laws in the past year dethroned California, but I am not willing to bet on it.
CA will always have an advantage due to its climate and ports. But other countries have still managed to squander such advantages.
California's electric grid has problems, but burning coal isn't one of them. Coal represents 0.15% of electricity generation in the state and 3% of overall power consumption when accounting for power imports.
Also, coal isn't used for peaker plants, which is what California uses a lot of natural gas for. That service will be replaced by dispatchable storage and loads.
Coal.
The state isn't building new coal capacity at all. It's cheaper by nearly every metric to build renewables and storage than build new coal capacity, or just import natural gas from another source.
No, it says the comparison is a lot more nuanced than some would like to believe.
https://www.wsj.com/articles/big-labor-eats-small-business-i...
It's about the FAST Recovery Act. You can google it and see for yourself.
yes for Texas.
California is doing fine too cause different businesses want to be here for other reason and pay the tax for it and they are fine. I was not implying one is better than the other I was stating what was best for my situation and was glad I moved away from Texas.
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...
Here are the analyses that the Reddit post that the article referenced are based on:
https://itep.org/whopays/california/
https://itep.org/whopays/texas/
Progressive taxes can still be achieved, through property taxes, sales taxes on luxury goods, and taxes on excessive usage of public goods.
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.
But in reality, income taxes mostly contribute shifting income to non income benefits for employees.
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.
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.
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/
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%20....
A person in CA a 50k income will not pay a 10% income tax OR usually own a $1M valued home.
(Trying to make $20k 20% of $50k and failing)
Methinks you may have picked these numbers to tilt things in favor of CA. If the income were _slightly_ more in line with what might be considered “reasonable” for a $1M house, like say $250K, suddenly the math makes much more sense in Texas.
And this doesn’t even get into the whole “house that costs $1M in CA wouldn’t cost $1M in Texas” thing...
With more and more people moving to Texas, it's not unrealistic to see more $1M homes.
People tend to buy the most house they can afford, not just the most house they need. If you have 1M for a house, you buy a 1M house in Cali or TX. Most wouldn’t move to TX and buy something cheaper, but instead something bigger.
In regressive tax states, tax revenue "per capita" may be lower (because you're leaving a lot of money on the table - you're letting the rich take home more) and you've de-facto shifted the tax burden to people who have less money to begin with. So a large percentage of the population ends up paying more in taxes - the people who make less and use most of their income for purchases - while the high income earners pay less. You simultaneously reduce the money available for government programs while penalizing the people who need those programs more.
Note: people on HN are likely to be the "high income" earners who benefit from such a tax regime. If you're looking to work remotely and are optimizing to this level - i.e., you are seeking out regressive tax regions so you can pocket more money - you might want to consider whether this is a moral choice you actually feel comfortable with.
Also, you are making a bunch of conclusions not in evidence. The evidence, at least for Texas, shows that the majority of tax revenue comes from high income earners, primarily because they're land owners who buy more expensive/larger properties and because they make larger purchases. The state gets its income from property tax and sales tax primarily, both of which are considered "regressive taxes". While you're correct that these taxes account for a larger percentage of income for someone with lower income, the net effect is that the majority of the tax burden is being paid by more wealthy residents. Generally the right thing to do for people in lower income brackets in states without income tax is to increase their income, since they aren't penalized for it. In other states, you get penalized for increasing income, and in many cases are completely out of reach of ever having property ownership. Average people own homes in Texas, average people in California rent forever.
Ultimately, I suppose it's a good thing for these sorts of analysis to occur because it's more information to consider, but I do think there's some insidiousness to the way this is framed both in the article and in many of the comments. I don't even live in Texas anymore, but I definitely don't want to see it Californiated. If you want to live in California and think it's a better deal, go live in California, don't demand that Texas matches the same tax regime.
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.
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://ed100.org/lessons/whopays
Education is underfunded, and in California local property taxes aren't contributing much.
> This also leads to underfunded local services, like education, which is mostly funded by local property taxes.
https://www.thecentersquare.com/california/california-reside...
I worry that the ITEP study (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.