Are DFW property taxes really higher than the rest of the country? (Denton: rent, mortgage)

[yjc281]

Originally Posted by D-Towner

California is broke because many middle class taxpayers are fleeing the state and the Liberal legislature continues to spend.

That is one reason but not the whole picture. Increasing welfare spending while enacting "taxcuts" simply won't work. As far as I understand CA relied heavily on income taxes to fund entitlement programs. It was good when they could collect insane amount of taxes during .com booms, but not anymore. Reduction of property taxes also shifted school funding responsibility from local to state government. The Texas government is at least more fiscally responsible than CA. Overall tax burden in TX is much lower than most states. People who cannot afford the property taxes probably should not own those homes.... It's kind of a deterrent to discourage people from buying too much, possibly one of the reasons housing is cheaper in TX.

[DWong]

Originally Posted by yjc281

That is one reason but not the whole picture. Increasing welfare spending while enacting "taxcuts" simply won't work. As far as I understand CA relied heavily on income taxes to fund entitlement programs. It was good when they could collect insane amount of taxes during .com booms, but not anymore. Reduction of property taxes also shifted school funding responsibility from local to state government. The Texas government is at least more fiscally responsible than CA. Overall tax burden in TX is much lower than most states. People who cannot afford the property taxes probably should not own those homes.... It's kind of a deterrent to discourage people from buying too much, possibly one of the reasons housing is cheaper in TX.

Whoah... whoah whoah...

One reason for Prop 13 in CA was to keep seniors who bought their homes after WWII in their homes and not force them out of them bc the adjusted property tax would force them to move. Let's face it, my grandpa retired on a NAVY salary and his property taxes would be more than his ENTIRE salary now. That's unconstitutional if you ask me. Thank god for the ONE thing our STATE did correct. TX... maybe think about changing it.... bc those who earn an honest decent salary now (not this quick money, but everyday hard worker)... when you're retired on an fixed income it WON'T be fun.

[Bideshi]

Originally Posted by Lakewooder

Yes but you can see mountains in the distance while you are stuck on the freeway on one of those clear days!

Oh yeah, I remember that day!

[DWong]

Originally Posted by yjc281

Lol, there is a good reason the CA government is broke and need to raise all kinds of taxes to some ridiculous levels. The CA tax model is not sustainable, period.

Oh... we waste plenty of $$$ in other ways. I don't think anyone likes that their taxes go up REGARDLESS of what they did to their homes. Let it be what I paid for it. It's a bad system in the long run. Ask any Senior citizen or person on a fixed income.

[aceplace]

Originally Posted by cdelena

You can do anything you want with statistics and tell any story. Texas property taxes are the highest in the nation when measured as a percentage of appraised value.

So what? The usual measure of the tax burden is in its relation to income.

Perhaps the "problem" is that house prices in Texas are too low? Wow, what a heartbreaker.

[aceplace]

Originally Posted by DWong

People, keep in mind in CA our values don't adjust annually. My grandparents home in 1960 for $15,000 now worth 100x that isn't being taxed at it's current rate. So these CA % values are HIGHLy inflated. Not to mention in many of our larger cities, SAC, Inland Empire and Fresno our prices are similiar to many TX areas as well... NOT 3-4x higher...

The property tax figures are an average over an entire county, and are a balance between low property taxes that have been grandfathered in, and super high taxes applied to more recent house purchases. For someone trying to buy a house in California, the situation is far more dire than the numbers suggest.

Housing prices are low in major Texas cities because the local governments do not apply draconian and market-killing building regulations to the building industry. Also, there is much more land on the periphery of an inland city than a coastal city.

[lh_newbie]

Even if housing prices were the same... your overall tax burden in CA is higher due to property taxes. My wife and I paid $6K in property taxes in Dallas and $0 in state income tax. If we moved to CA and by some miracle, found our same exact home for the same exact price and only paid the 1% property taxes, our property tax bill would drop to $3K per year - but we'd pay in excess of $15K per year in income taxes. You tell me which area has a higher tax burden.

The argument that CA's property taxes stay the same has been used here, so let's explore that argument. To be as favorable to California as possible, let's assume that the TX property taxes increase by 5% per year, every year for 20 years and this miracle home stays the same in CA along with income taxes staying the same.

At the end of 20 years:

- Yearly tax burden in TX $15,161 (all property tax). Cumulative tax burden over 20 years: $198K
- Yearly tax burden in CA $18,000 ($3,000 in property taxes and $15,000 per year in income taxes). Cumulative tax burden over 20 years: $360K.

Anyone that argues that CA has less of a tax burden on their citizens clearly needs to run the numbers.

Brian

[D-Towner]

Originally Posted by lh_newbie

Even if housing prices were the same... your overall tax burden in CA is higher due to property taxes. My wife and I paid $6K in property taxes in Dallas and $0 in state income tax. If we moved to CA and by some miracle, found our same exact home for the same exact price and only paid the 1% property taxes, our property tax bill would drop to $3K per year - but we'd pay in excess of $15K per year in income taxes. You tell me which area has a higher tax burden.

The argument that CA's property taxes stay the same has been used here, so let's explore that argument. To be as favorable to California as possible, let's assume that the TX property taxes increase by 5% per year, every year for 20 years and this miracle home stays the same in CA along with income taxes staying the same.

At the end of 20 years:

- Yearly tax burden in TX $15,161 (all property tax). Cumulative tax burden over 20 years: $198K
- Yearly tax burden in CA $18,000 ($3,000 in property taxes and $15,000 per year in income taxes). Cumulative tax burden over 20 years: $360K.

Anyone that argues that CA has less of a tax burden on their citizens clearly needs to run the numbers.

Brian

Are you not able to write your state income tax off your federal income tax?

[aceplace]

Originally Posted by D-Towner

Are you not able to write your state income tax off your federal income tax?

No. There is no Federal tax credit for a state income tax.

The only saving grace is that the money you pay to the state is not taxed at the Federal level. On the other hand, residents of states such as Texas with no state income tax can take an income deduction on the total amount they spent on sales taxes. If they cannot document the sales taxes, they can take a theoretical amount based on annual income.

It is true that your California house is not periodically reassessed to a higher value. Once you buy it, the purchase price is the permanent assessed value, until you sell it. This freezes your tax payment, but it locks you into that house. If you need to move to take another job somewhere else, you will buy another house and pay property tax based on the current sales price.

Thus, California property taxes are not collected impartially. People who have lived in the same house for a long time pay less than their average share, but those who must move, or want to upgrade their housing, pay much more than their share. This is one economic and social dislocation that we in Texas are spared from, thank God.

[aceplace]

Originally Posted by lh_newbie

Even if housing prices were the same... your overall tax burden in CA is higher due to property taxes. My wife and I paid $6K in property taxes in Dallas and $0 in state income tax. If we moved to CA and by some miracle, found our same exact home for the same exact price and only paid the 1% property taxes, our property tax bill would drop to $3K per year - but we'd pay in excess of $15K per year in income taxes. You tell me which area has a higher tax burden.

The argument that CA's property taxes stay the same has been used here, so let's explore that argument. To be as favorable to California as possible, let's assume that the TX property taxes increase by 5% per year, every year for 20 years and this miracle home stays the same in CA along with income taxes staying the same.

At the end of 20 years:

- Yearly tax burden in TX $15,161 (all property tax). Cumulative tax burden over 20 years: $198K
- Yearly tax burden in CA $18,000 ($3,000 in property taxes and $15,000 per year in income taxes). Cumulative tax burden over 20 years: $360K.

Anyone that argues that CA has less of a tax burden on their citizens clearly needs to run the numbers.

Brian

That's a pretty good statement of the problem, Brian.

Just to make the exercise a little more compelling, let us also assume that the Texas property tax is increasing 5% because of general national inflation. Thus, general incomes should also rise.

Now this will not hurt the Texan, since he pays no income tax. On the other hand, the Californian will pay more money to the state because his inflation-adjusted income has increased. So his cumulative tax burden at the end of the 20 year period will be even worse.

Now salaries usually are adjusted for inflation, so he probably will be paying a higher and higher income tax each year. But what if he doesn't get these salary increases? Then he loses equivalent purchasing power. The Californian is hurt either way.

So he has a significantly higher tax burden, and his state government still has a $40 billion deficit?