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Comment by xnyan | Hacker News Reader

The effective state and local tax rate is ~12.5% in Texas and 9.6% in California.

I think every "effective tax rate" calculation, which necessarily combines several things, needs more information about methods ... but I think your statement sounds pretty backwards.

E.g. this seems pretty methodical and finds 13.5% for CA and 8.6% for TX. https://taxfoundation.org/data/all/state/tax-burden-by-state...

Yes the accurate way is to add receipts plus unpaid annual taxpayer liabilities. Divide by gdp. Most the weird ways you see are bogus, for interesting controlling for average taxpayer doesn't take into account the plebs ultimately pay the taxes of the rich through higher prices that look like private income/spending but are actually offsets for higher tax.

Can't be, texas only has tax receipts on about 8% of their gdp.

https://texasgateway.org/resource/162-taxation

Having lived in both California and Texas I have to say, that's a stretch.

What data is backing up those numbers? Does that include sales tax, gas tax, utility tax, car registration fees, and every other form of state tax?

Not sure what "effective" tax rate means, but 9.6% seems accurate to me for income tax only, and can go up to 12%. Sales tax is like 7 something, and all the other taxes are all over the place.

Right but the Texas income tax rate is 0% and the sales tax is 6.25%. So I'm curious how they arrived at a 12.5% vs 9.6% effective tax rate.

Speaking as a Texan, Texas has plenty of ways to tax you. My favorite is the punitive registration fees they recently added to electric cars.

Better than California requiring 0.65% of your vehicle value every year in licensing fees.

Washington state also added a yearly EV registration fee. Their argument is the gas tax pays for road maintenance, but EVs don't consume gas, so they need some other way of extracting money from those owners.

EVs are heavier which causes more wear on the roads.

This makes sense. Gas taxes in almost all states pay for a lot of programs related to DMV activities and what not, so DMVs are having to figure out other ways to recoup the costs of EVs.

California has had extra EV registration fees for years. Unfortunately it makes sense to do that if road maintenance/repairs are dependent on gas taxes

I did the math and it seems that the TX legislature assumes an EV is going to be driven around 80,000 miles a year.

Isn't that because the gas tax is regressive against the poor who have older cars with bad gas mileage and this compensates by having rich electric owners pay the share of gas tax they've skirted?

I heard property tax in Texas is the big one.

It's almost certainly the real estate taxes.

In California, Prop 13 makes real estate tax effectively de minimis (especially if you bought a long time ago), and the higher income tax rates make up for that.

Texas rates are higher and there's no limitation on their growth.

This difference is obscured if you're a renter.

Real estate and sales tax are what get people in texas: https://www.cato.org/blog/are-taxes-really-lower-california-...

https://fortune.com/2023/03/23/states-with-lowest-highest-ta...

Essentially, California has a more progressive tax system than Texas.

My understanding is that California taxes are better for lower-income people, and Texas taxes are better for higher-income people. Your situation will dictate what state is better for your finances.

Doesn’t the local rate depend on… where in the state you live? These numbers don’t make sense at all.

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