A cool guide to total tax burden by state
A cool guide to total tax burden by state
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Not a fair comparison if they leave out property taxes.
Last year I paid twice as much in property tax as I did in state income tax.
I bet a bunch of ‘low tax’ states wouldn’t look so great if they included the full picture.
In texas I went to dinner with 5 people who complained a solid hour about property taxes, and then asked when I was finally going to buy a home there.
Texas homeowner here! The homestead exemption used to be awesome for keeping property taxes down and probably still does in rural areas. My property taxes have gotten crazy high in the last few years in a Houston suburb.
Taxes are necessary. We have high property, sales, and use taxes to offset the fact that we have no state income tax. I think anyone that is bitching about it probably doesn't understand that if it were lowered then either one of the others would get raised or they'd have to amend the state constitution and start taking income tax. Governments need money to run and build infrastructure.
I am also a texas home owner. The issue I have is when my county assessor has found their own incentive to ride the housing bubble and claim my property (a 2/2 condo in dallas) has somehow gained +60% in value over 3 years so they can get far more tax out of me knowing fully well that it isn't worth that much. And when I argue it down all I get it down to is "just" +50% in value, knowing fully well that I might actually get +30% at best, but realistically +20%.
The state is incentivized to pump land values for more tax revenues and it will only cause a stagnation down the road when the bubble pops. It is a short sighted money grab from the state and it fuels the bubble that much more. It is one of the multiple catch 22 factors to make a housing crash into a self fulfilling prophesy.
Are you homesteaded? I just looked it up to make sure I'm not talking out my ass here. The maximum annual assessment increase for a homestead is ten percent. Over three years, your max increase should be thirty three percent, not sixty. Additionally, the homestead exemption went up from $40,000 to $100,000 this past year. My tax bill went down year over year because of this. My assessment that just came in the mail went up three percent for 2024. Granted I don't live in the most fashionable neighborhood. I'm sure the HOA infested suburbs went up more than that.
I am homesteaders and you are correct in your numbers. And to be transparent here, I am actually a disabled veteran and receive an even larger exemption than most people. The value can grow more than the capped 10% in a few ways. The first was from the first assessment after I bought it. I bought for 170k and yet it was immediately assessed for 210k. Now I am up to about 250k. No improvements. I will be happy to sell for 200k.
The second thing they can do that I discovered was this last time they tried to say it was worth more than that (before I got it down to the 250k it is now), and did even note that the capped "taxable" increase- essentially saying that they have pre-locked in +10% increases for the next so many rounds of assessments until the taxable value is even with the assessed value. I argued it down. The value is still inflated.
Now, my personal opinion? I'm actually not mad about paying for taxes. I enjoy the idea of everyone pitching in what they can afford and together we can build a better community, nation, and world. I just hate that my city is playing in the real-estate speculation game as a way to pump their budget and the taxes I pay are going to a bunch of bullshit. Fuck dallas.
That makes sense. I was curious because my boss who lives in Plano neglected to homestead so he was getting violated on his taxes. I discovered it, we filled out this form and talked to that person and eventually got him several thousand dollars of retroactive credit.
My house was assessed at something like $130k the year before I bought it and two years later it's in the $230k range, but I'm fine with it as the old assessment was based on a structure that was torn down and my current house was built brand new on the original footprint. So it's more or less assessed at what I paid for it.
I do get amused trying to explain to people out of state how property tax protest is pretty much the national sport of Texas.
I may have lived in Texas too long. My thought was that the people bitching were the kind of people who just bitch about having to pay taxes at all because those people are EVERYWHERE. I wasn't taking into account your view because it's not one I hear often. I'm personally in favor of amending the state constitution, putting a progressive tax in place, and lowering property and sales tax. Realistically, with the people in office right now, they'd amend, keep the taxes that already exist in place, then institute a flat tax.
You're right, of course.
So true. I am from Houston and loved it. I know what you mean about people bitching about taxes no matter what. The oil and gas guys are the worst. They have million dollar town homes, jobs that bring in 250k or more, and then bitch about the sales tax being on their bar tabs that are over a thousand dollars. They will bitch about their city taxes going to nothing, but then when I bring up the port of Houston, all the amazing museums, Herman/memorial park, miller outdoor theater, any of the amazing parks really, or any of the other things Houston pays for- that doesn't count because they don't use it and they just want a city paid for frat house with free booze and prostitutes. Ahhhh, classic Houston O&G....
I did IT for O&G for years and you fucking nailed it. Plus, have you seen some of the nicer schools?!? I grew up in a very rural area and the schools were an absolute tragedy. The ones here, paid for with my property taxes, at least look amazing and I'm here for it. I just wish the taxes were spread more evenly so that places like where I went to school had opportunities for stand out kids and resources for neuro-divergent kids and the children with learning disabilities.
Let me step off this tangential soapbox.
From the bottom of the graphic: “Total tax burden based on property tax, individual income tax, and sales & excise tax.“
Several states have no state income tax at all, so it wouldn’t make sense to only look at that.
What does make this a bit of an unfair comparison is that it doesn’t break it down by income. Compare tax burdens for the bottom quartile earners and it tells a different story.
What does make this a bit of an unfair comparison is that it doesn’t break it down by income. Compare tax burdens for the bottom quartile earners and it tells a different story.
I'm curious how they handle rentals with regard to tax VS income. Obviously, the landlord is paying the property tax, but they're rolling that into rent. I assume it gets counted as their tax burden, but they're not really the ones paying it. The renter is paying that surplus cost from their income, but I'm guessing it's not counted as part of their tax burden.
I also don't know how that all shakes out when you look at it over the population. It might average out the same, regardless of who gets credit for the payment, but I agree that a breakdown by income would be very interesting.