>For the first two decades of the century, what it meant to be Texan—as explained by the state’s politicians—was largely wrapped up in a feeling of competition with California
Completely asymmetrical, however. California does not define itself in terms of Texas.
>Technologists started picking up sticks in Taxifornia and moving to the Lone Star State in greater numbers.
>Meanwhile, Texas is not a low-tax, low-service state, as is commonly held. It’s a high-tax, low-service state: we may have no income tax, but at least one study found that we have one of the ten highest total tax burdens in the nation, with property taxes making up most of the gap. The quality of state services, however, has not improved commensurate with the growth of state budgets.
Imagine if this truth were more widely known, along with the fact that California pays federal taxes at a disproportionately higher rate than other states[0] and yet receives back less federal spending. California's degree of taxation without representation at the federal level is part of the reason why state taxes are so high, but this is never mentioned when discussing the topic.
[0]a middle income CA taxpayer on average pays more federal tax than a middle income taxpayer in the South because there is no tax rate and tax deduction adjustment for different cost of living regions -- simple example is business deduction for standard mileage, which does not reflect CA higher cost of gasoline.
I've read somewhere that there are actually retirees in Texas who are moving to California for the lower taxes. Its true that California has the highest state income tax and Texas has no income tax, but for retirees whose income is mostly social security plus some IRA/401k withdrawals and who don't have much debt there is a good chance their California income tax will be quite low or even zero.
Social security is not taxed by California, so their only state income tax will be on those retirement account withdrawals. For a married couple the standard deduction in California is nearly $11k and the lowest tax bracket is 1% on the first ~$21k over that. That means they could take up to ~$11k/year out of their retirements accounts with no state tax, and up ~$32k/year out of their IRA/401k with that tax being less than ~$210.
I did some checking on Redfin and Zillow to check house prices and property taxes. Same sized houses and lots in California are more expensive than in Texas, so it looks like if your sold your house in Texas and moved to California and put all the money from the house sale into your new house you would have to downsize. A 2000 sq ft house on Texas might become a 1600 sq ft house in California, which would be acceptable to a lot of people. If that is acceptable then it appeared that moving to California could indeed lower your taxes.
My retired parent is unable to fathom that with their prop 13 property tax rate and retiree income, they would pay more overall taxes by moving into a similar house in Texas. They just won’t believe it, because all they hear is Texas = right wing = low tax and CA = left wing = high tax
I can’t imagine the pikachu faces there were on the many retirees that did that make that move, saw their tax bill, and then realized they’re 1000 miles away and can never get back their lower taxes…
Currently it may be true that Californians pay (slightly) more to the federal government than they get back when compared to Texas (17.8% vs 20.5%)[0], that wasn’t always the case. In 2016, for example, California was bringing back around 25% of federal dollars vs Texas 15%.
In 2023 California was 41st in terms of paid federal tax vs benefit. It was lower than Florida, for example, which like Texas, doesn’t have an income tax. Per capita, California isn’t some huge outlier for GDP or even the top in the country, it just has the most people.
The idea that California is funding all the poors is inaccurate and an indicator of the states perceived hubris. Florida, Illinois, Minnesota, and several others have more reason to complain than California.
Right wing media controls all but a thin sliver of the airwaves, and the remainder is considered state propaganda. Red states are the welfare queens of the union, but the smallest tax on the rich riles up those media barons, who flog their flock into a frenzy. The truth just isn't profitable.
Completely asymmetrical, however. California does not define itself in terms of Texas.
>Technologists started picking up sticks in Taxifornia and moving to the Lone Star State in greater numbers.
>Meanwhile, Texas is not a low-tax, low-service state, as is commonly held. It’s a high-tax, low-service state: we may have no income tax, but at least one study found that we have one of the ten highest total tax burdens in the nation, with property taxes making up most of the gap. The quality of state services, however, has not improved commensurate with the growth of state budgets.
Imagine if this truth were more widely known, along with the fact that California pays federal taxes at a disproportionately higher rate than other states[0] and yet receives back less federal spending. California's degree of taxation without representation at the federal level is part of the reason why state taxes are so high, but this is never mentioned when discussing the topic.
[0]a middle income CA taxpayer on average pays more federal tax than a middle income taxpayer in the South because there is no tax rate and tax deduction adjustment for different cost of living regions -- simple example is business deduction for standard mileage, which does not reflect CA higher cost of gasoline.