It’s likely worse if you factor in embedded property taxes within rental payments to landlords in the top 1%.
Texas is 7th highest in property tax rates. California is one of the lowest. I sort of had that in my head when I made the comment. I should have been more thorough. “California's average effective property tax rate is just 0.72% – among the lowest in the country. In Texas, they'll pay 1.9%.” California Exodus: Why Are Californians Moving to Texas?
Interesting story about how people perceive taxes. I'd propose that people perceive large scale, one time checks as bigger deals than even larger amounts dripped out over the entire year in small amounts (i.e., sales taxes).
This is not an accurate representation. Texas has no state income tax and no city or local income taxes. The following are the taxes that provide revenue to the state of Texas: Alcohol Beverage Taxes Cigarette and Tobacco Tax Franchise Tax (Corporate Tax) Hotel Occupancy Tax Insurance Taxes Motor Fuel Taxes Vehicle Sales and Rental Taxes Natural Gas Production Tax Oil Production Taxes Other Taxes Sales Taxes Utility Taxes Data Visualizations Add to that county property taxes. None of these taxes are regressive. Almost every one of those is a flat tax rate. The franchise tax is a flat rate after a minimum threshold, which makes it somewhat progressive. Some of those taxes are not paid by individuals. Most of the taxes individual people pay to the state or county are consumption taxes or property taxes. It makes sense that lower income people pay a higher percentage of their income as taxes because a higher proportion of their income will go towards purchasing taxable items. So how do these flat taxes “reward” the rich?
Most of those are regressive - in terms of tax paid as a percent of income. The wealthy save more, so sales taxes as a percent of income are typically higher for lower income.
I could give a rat's ass bout Tx taxes - though it was my home for 6+ years -, but these 2 statements don't really jive.
You are wrong on local taxes. They can tax up to 2% on top of the 6.25% state tax. And pretty sure if you actually read the graph on the first post you'd see that 13% for the bottom earners, 9.7% for middle, and 3.1% for top earners is regressive. Unless you believe that isn't the definition of regression.
You specifically said that Texas has a tax scheme designed to reward the rich. Please tell us how that is so. Furthermore, please tell us how you would make each of those taxes progressive. How would you make sales tax progressive? How are you make motor fuel taxes progressive? And all the rest.
I don’t have a dog in this fight. I live in tx. There are positives and negatives. Texas tends to have very high sales taxes, up to 8.25%, and they are assessed on some services that aren’t in other states. Property taxes as a percent of property value are very high, usually around 2.5%. Previously that was somewhat offset by low property values, but property values in urban areas have increased a lot lately. For the most part property tax rates haven’t. CA is weird property tax wise because of prop 13 (I think) which capped growth in taxes at a very low number for a resident. The result could be a new resident next door could have much higher taxes than his neighbor that’s been there 20 years. It is one of several reasons not to move in CA. Personally I’d rather be taxed in sales and property than income. Cost of living is much lower in TX, I would think that more than offsets the higher tax burden on middle and low end. Due to CA extensive regulation on zoning and other things, you have a sort of built in tax of higher cost of living. Some of the regs could be for good reason, others may be excessive. CA has a higher average household income base $107k vs TX $87k. Thus they have more income to tax. Per Capita Income by State 2022
pass on the first thing. the other is simple. once a year submit a form with proof of income & proof of purchases* & refund in such a way as to make 'em progressive. *even simpler, but less accurate, is just refund according to income.
Please keep in mind that I was responding to gator lawyer’s contention the Texas has a tax scheme designed to reward the rich. I was pointing out that cannot be the case. The regressiveness is not designed in the system. It is merely an artifact of life, that the lower your income the larger the portion of your income is spent on taxable items. It’s just the way life is. It’s not some system designed to reward the rich.
This is what I specifically said: If you need an explanation of why, look at the OP. If you want to how to make a tax scheme progressive, my answer is to not design your tax scheme like Texas's. When you impose flat taxes on consumption, you're going to end up imposing a heavier tax burden on the people who have to spend a larger percentage of their income consuming goods. Doc offered an idea on how to make it progressive. But I'd simply recommend not building a tax scheme in that sort of manner.
