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.

    • @[email protected]
      link
      fedilink
      English
      237 months ago

      https://itep.org/whopays-7th-edition/#income-taxes

      This report identifies the most regressive state and local tax systems and the policy choices that drive that outcome. Many of the most upside-down tax systems have another trait in common: they are frequently hailed as “low tax” states, often with an emphasis on their lack of an income tax. But this raises the question: “low tax” for whom?

      This study finds that very few states achieve low tax rates across the board for all income groups, and those that do usually rely heavily on energy or tourism sectors that cannot realistically be replicated elsewhere. Alaska is the only state that ranks among the bottom 10 lowest-tax states for all seven income groups included in the study. New Hampshire and North Dakota are among the lowest-tax states for six of their seven income groups. Nevada, South Dakota, and Wyoming have low taxes for five of their income groups.

      The absence of an income tax, or low overall tax revenue collections, are often used as shorthand for classifying a state as “low tax.” These two measures are, in fact, reliable indicators that taxes will be low for the highest-income earners, but they tell us next to nothing about the tax level being charged to low-income families.

      Florida, Tennessee, Texas, and Washington all forgo broad-based personal income taxation and have low taxes on the rich, yet they are among the highest-tax states in the country for poor families. These states are indicative of a broader pattern. Using the data in this report, we find a modest negative correlation between tax rates charged to the lowest and highest income groups. In other words, if a state has low taxes for its highest-income earners, it is more likely to have high taxes for its lowest-income residents.

      Similarly, we find that the overall level of tax revenue collected in a state has almost zero correlation with the tax rate charged to that state’s lowest-income families. Put another way, states that collect comparatively little tax revenue tend to levy tax rates on poor families that are roughly on par with those charged in other states. And, as a group, states collecting higher amounts of revenue do not do so with above-average tax rates on the poor.

      For high-income families, on the other hand, overall revenues are highly correlated with their own personal tax bills. This suggests that high-income families receive a financial windfall when a state chooses to collect a low level of tax revenue overall, though that windfall comes at the cost of fewer or lower-quality public services.

      • @[email protected]
        link
        fedilink
        English
        -177 months ago

        I agree with all this. Not sure it’s relevant.

        CA charges almost no tax on its poorest, and the poorest make $0 , so they see no benefit. Same in TX.

        • @[email protected]
          link
          fedilink
          English
          22
          edit-2
          7 months ago

          So you’re just going to be willingly obtuse. Got it.

          What mosaicmango and itep are trying to say is that with everything that’s taken into consideration, income, property, sales, excise, other taxes and bullshit fees like car registration, that California are better for middle class and lower class because you pay overall less tax there because you don’t see that benefit in Texas unless you’re in the 1% already rich asshole territory.

          So those “fleeing” not seeing actually less money taken out of their yearly salary.

          • @[email protected]
            link
            fedilink
            English
            -57 months ago

            Not being willingly obtuse, this is a good faith discussion. It feels very obtuse on the other end tbh, and I’m genuinely trying to have an intelligent discussion.

            “Other taxes and bullshit” I agree 100% that I’m not taking into account. Thats where I’m looking for some sources of specific info. Not just unsourced opinions.

            • @[email protected]
              link
              fedilink
              English
              67 months ago

              You are being willingly obtuse when I have provided the study abstract that contains the methodology, the data behind it, and 30+ citations and sources.

              Don’t come talking about ‘good faith discussion’ and asking for sources when you clearly didn’t even bother to read the information provided.

              • @[email protected]
                link
                fedilink
                English
                -27 months ago

                I did not see the link for some reason, just the quote. Once again, I’m not being willingly obtuse. Thank you for the link and I will read it.

                It’s not helpful to the discussion to repeatedly tell people how they feel, unless you just want to dismiss the conversation. And in such a case, no reply at all would be a better option imo.

        • iquanyin
          link
          fedilink
          English
          47 months ago

          the poorest rely the most on services and on things like clean water. they can’t just jet off to a better area.

      • @[email protected]
        link
        fedilink
        English
        -15
        edit-2
        7 months ago

        This isn’t comparing taxes. It’s comparing what section of the population shares more of the total burden.

        This isn’t saying the people in Texas pay more, just that the distribution is different across income groups. Which makes sense because there is no income tax. Overall, the vast majority (and all non-landowners) in Texas is paying less than they would in Cali.

        It’s a misleading graph, possibly on purpose to make people think what you did.

        Edit: brain fart. further discussion below.

        • @[email protected]
          link
          fedilink
          English
          11
          edit-2
          7 months ago

          You realize that the percentage of your income that is taxed is a fixed number regardless of state, right? That 1% of 60k in California is the same as 1% of 60k in Texas?

          It very directly shows that poorer people in Texas pay more than poorer people in California over the wide range of taxes in each state. They fully take into account land ownership or not, which you can confirm by reading the linked article in the comment:

          The graphic reportedly contains 2018 data from the Institute of Taxation and Economic Policy (ITEP), which compiled statistics regarding IRS income tax, sales tax, property tax, and information from Bureau of Labor Statistics’ Consumer Expenditure Survey from sources including the U.S. Census Bureau

          • @[email protected]
            link
            fedilink
            English
            -47 months ago

            Ugh I’m sorry. I started trying to make sense of it and then somehow confused myself into thinking it was a % share of total - as if each side added to 100%. Nevermind, I was wrong.

            Anyhow, back to the chart - it simply makes no sense in that case. I would need to take a look at the underlying to tell me how the bottom 20% pay 13% of income to taxes in a state with 0% income and 6.25% sales tax. Only thing left is property tax (according to chart it’s those 3).

            Yes I realize small local sales taxes may apply, but is a max of 2%.

            How much property does this bottom 20% own?!

          • @[email protected]
            link
            fedilink
            English
            -10
            edit-2
            7 months ago

            The bottom 20% of earners aren’t likely to make the same amount in CA vs TX.

            California’s minimum wage is $16. Working 40 hours (hard on a minimum wage job for reasons) brings $640 a week. 10.5% of that is $67

            Texas’s is $7.25. 40 hours of that job is $290. 13% of that is $38.

            In this bad example, a minimum wage earner in California pays almost double the tax than a minimum wage worker in Texas. It’s a bad example for many reasons, including us not taking into account the extra spending power the California worker has after taxes.

            • @[email protected]
              link
              fedilink
              English
              5
              edit-2
              7 months ago

              Youre talking about the total dollar amount of taxes paid, which is irrelevant because of regional differences. What you can compare is percentage of income, which is a metric that works regardless of total dollar wages.

              Someone paying $100 to the tax man when they only make $5000 is more of their money then someone paying $200 to the tax man when they make $15000. The first person is paying higher taxes. The total dollar amount is irrelevant compared to the percentage of income paid.

              The data is very clear. Almost all Texans pay more of their income to state taxes than almost all Californians. The fact that California provides a more than doubled minimum wage than Texas while taxing people less is a feather directly in their cap.

                • @[email protected]
                  link
                  fedilink
                  English
                  2
                  edit-2
                  7 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.

        • @[email protected]
          link
          fedilink
          English
          107 months ago

          It literally isn’t though, the graph is labeled and the article explains it in further detail, this is a graph of the percent of income each income group pays in taxes. You explination doesn’t even make sense, the numbers of all the groups don’t add up to 100%.

          • @[email protected]
            link
            fedilink
            English
            37 months ago

            I already corrected my brain fart in another comment. Agreed makes no sense. Agreed there too. Will edit.

    • capital
      link
      fedilink
      English
      97 months ago

      Income taxes get all the attention but they aren’t the only taxes.

      I don’t know about the 600k figure specifically though.

      • @[email protected]
        link
        fedilink
        English
        -77 months ago

        They aren’t. There is sales tax too, which is higher in Cali. And property taxes seem moot if we’re talking about poor people, no?

    • @[email protected]
      link
      fedilink
      English
      97 months ago

      It’s an odd argument, but I think it comes down to sales tax and property tax. Property tax is high in texas, and sales tax is 7% (not the highest in the nation, but high, and local sales tax can also run 1-2%). I think the theory is that you only pay so much sales tax in goods for one person, so it balances out california’s higher property taxes.

      • @[email protected]
        link
        fedilink
        English
        -87 months ago

        That makes zero sense.

        Cali sales tax is 7.25, Texas is 6.25

        Poor people likely don’t own property, but yeah it’s about double in Texas.

        Income tax in Cali ramps from 1% up slowly to 9% at just 68k/yr. But even lowest income pays 1%. Texas is 0%.

        The argument has no merit. None. California appears to have objectively higher tax on most people, and certainly on all those who don’t own property.

        What am I missing?

        • @[email protected]
          link
          fedilink
          English
          117 months ago

          Landlords pass on higher property taxes to their tenants in the firm of higher rents. You don’t need to own property to be affected by high property taxes.

          • @[email protected]
            link
            fedilink
            English
            17 months ago

            Ok, then we are getting into estimated tax derivatives. Yeah I can’t just make guesses there.

            That’s not direct tax.

            But I agree there could be something there. It would be minimal I’d assume but I truly don’t know.

        • @[email protected]
          link
          fedilink
          English
          67 months ago

          Texas has a base sales tax of 6.25, which can be raised by local taxes up to 2%. So it is effectively 8.25% everywhere.

          • @[email protected]
            link
            fedilink
            English
            17 months ago

            Ok? But that income tax is huge…

            I hadn’t considered the fact that some people make money under the table and/or illegally. And this pay not income tax in either state, but a ton of sales tax.

            I highly doubt a large amount of that in a 2% local sales tax county is what causes this. If so, that’s crazy.

            • @[email protected]
              link
              fedilink
              English
              67 months ago

              I feel part of the confusion may be thinking california has a flat tax? It has tax brackets, which increase the percent as you make more.

              • @[email protected]
                link
                fedilink
                English
                17 months ago

                Yeah, starts at 1%, hits 9% by 68k income. I’m not misunderstanding that. Not seeing how 1% < 0%.