Middle class pays higher tax in Texas than California (Los Angeles: loan, mobile home)

[payutenyodagimas]

Originally Posted by expatCA

In CA the overall tax burden on an individual basis seems to hit the poor the hardest.

thats true anywhere

they dont pay income tax though

[BeauCharles]

I'm 58 right now. When I retire I'll probably have less than $30,000 a year in income (with a house with no mortgage). Living in the Sacramento Valley there is no way I'd better myself by moving out of state. My property tax is less than $2,000 a year and even thought sales tax is 8.25% here its not high enough to be a factor. I'll probably just stay put.


I keep seeing articles about the worst states to retire in with California always in the top five or ten. I've done the math and everyone's situation is different. Again, I won't better myself my leaving my home state.

[JJonesIII]

Originally Posted by BeauCharles

I'm 58 right now. When I retire I'll probably have less than $30,000 a year in income (with a house with no mortgage). Living in the Sacramento Valley there is no way I'd better myself by moving out of state. My property tax is less than $2,000 a year and even thought sales tax is 8.25% here its not high enough to be a factor. I'll probably just stay put.


I keep seeing articles about the worst states to retire in with California always in the top five or ten. I've done the math and everyone's situation is different. Again, I won't better myself my leaving my home state.

Uh huh, now run your scenario with someone renting or bought their house later than you with a higher tax basis. Of course, there are situations where someone can live comfortably but they are few and far between. I'm 59 and our property tax is $6k (and we consider ourselves lucky...many are higher than that). Let's not cherry pick here. If you like where you live, that's fine, enjoy it. But to think you couldn't sell your house in the Sacramento Valley and live financially like a king in Texas is ludicrous. And let's not get started on San Francisco, San Diego, or Los Angeles which are much higher than your area (we are talking about CA, not the Sacramento Valley exclusively).

[earthisle]

Originally Posted by JJonesIII

Hilarious and you beat me to it. What a stupid comparison. The OP really thought he was on to something here. Without taking into account the COL, this means nothing. You're absolutely right Taksan. This is not even close to an apples-to-apples comparison. Who in their right mind thinks a family making $62k in a metropolitan area of CA lives the same as one in Texas. That's gotta be the stupidest thing I've ever heard.

I think maybe you totally missed my explanation of what a quintile is. It's based on equally sized divisions, IE with the same number of households in each. There are 11.5 million households in California. That means 2.3 million households are in that middle quintile making $39k-62k. There are 4.5 million making less than that range. There are 4.5 million making more than that range.


Make sense?



By definition, that is the exact middle of incomes, regardless of what you personally consider middle class.



What this data shows is that a household in the middle is paying higher taxes in Texas vs California. Pretty simple thing.

[JJonesIII]

Originally Posted by earthisle

I think maybe you totally missed my explanation of what a quintile is. It's based on equally sized divisions, IE with the same number of households in each. There are 11.5 million households in California. That means 2.3 million households are in that middle quintile making $39k-62k. There are 4.5 million making less than that range. There are 4.5 million making more than that range.


Make sense?



By definition, that is the exact middle of incomes, regardless of what you personally consider middle class.



What this data shows is that a household in the middle is paying higher taxes in Texas vs California. Pretty simple thing.

No, i didn't miss it at all. It's disingenuous to somehow try to make a claim that the Middle Class (the words in your title) live the same in CA vs TX. Here are some of the most commonly used descriptions of the Middle Class...

https://money.cnn.com/infographic/ec...way/index.html

https://www.thebalance.com/definitio...income-4126870

It goes well beyond what you are disingenuously trying to claim. And for most, it involves (as stated in the 1st link)....home ownership, owning a car, having enough in health and retirement savings, etc., etc.

A family making $62k is living in poverty in the San Francisco area. That same family is doing fine in the Austin area. Let's stop being ridiculous here. When you decide you want to have an honest conversation, re-run the numbers comparing a family making $75k in the Austin area vs that same family making $150k in the San Francisco area. Other than that, you're just p i s sing in the wind.

P.S. You can also stop with the straw man argument and address "affordability" as opposed to taxes.

[expatCA]

Originally Posted by earthisle

I think maybe you totally missed my explanation of what a quintile is. It's based on equally sized divisions, IE with the same number of households in each. There are 11.5 million households in California. That means 2.3 million households are in that middle quintile making $39k-62k. There are 4.5 million making less than that range. There are 4.5 million making more than that range.


Make sense?



By definition, that is the exact middle of incomes, regardless of what you personally consider middle class.



What this data shows is that a household in the middle is paying higher taxes in Texas vs California. Pretty simple thing.

I wonder if just based on % as to the tax burden, not the actual amount paid, as the actual property tax paid in TX is less than in CA due to the less expensive cost of homes in TX? Then in the lower % sections as to earnings there may well be more renting at a higher cost in CA than in TX, and many in that group in TX can buy a home and in CA they have a very hard time doing so?



Then CA has all the "Fees" that were named that to avoid the 67% vote needed to pass a tax.

[earthisle]

Originally Posted by JJonesIII

No, i didn't miss it at all. It's disingenuous to somehow try to make a claim that the Middle Class (the words in your title) live the same in CA vs TX. Here are some of the most commonly used descriptions of the Middle Class...

https://money.cnn.com/infographic/ec...way/index.html

https://www.thebalance.com/definitio...income-4126870

It goes well beyond what you are disingenuously trying to claim. And for most, it involves (as stated in the 1st link)....home ownership, owning a car, having enough in health and retirement savings, etc., etc.

A family making $62k is living in poverty in the San Francisco area. That same family is doing fine in the Austin area. Let's stop being ridiculous here. When you decide you want to have an honest conversation, re-run the numbers comparing a family making $75k in the Austin area vs that same family making $150k in the San Francisco area. Other than that, you're just p i s sing in the wind.

P.S. You can also stop with the straw man argument and address "affordability" as opposed to taxes.

Nobody says they live the same, the point of this thread is that Texas taxes the middle class more than California does

[earthisle]

Originally Posted by expatCA

I wonder if just based on % as to the tax burden, not the actual amount paid, as the actual property tax paid in TX is less than in CA due to the less expensive cost of homes in TX? Then in the lower % sections as to earnings there may well be more renting at a higher cost in CA than in TX, and many in that group in TX can buy a home and in CA they have a very hard time doing so?



Then CA has all the "Fees" that were named that to avoid the 67% vote needed to pass a tax.

It's not burden, it's amount paid as a fraction of household income


I don't know how home ownership compares so I googled and found this list of metro areas https://www.zillow.com/research/home...y-income-9419/

[expatCA]

Originally Posted by earthisle

It's not burden, it's amount paid as a fraction of household income


I don't know how home ownership compares so I googled and found this list of metro areas https://www.zillow.com/research/home...y-income-9419/

According to your post and the site:
Rates paid by various household income levels:
Middle 20%: Texas 9.7% vs California 8.3%
Poorest 20%: Texas 13% vs California 10.5%
Top 1%: Texas 3.1% vs California 12.4%


The lower one’s income, the higher one’s overall effective state and local tax rate. On average, the lowest-income 20 percent of taxpayers face a state and local tax rate more than 50 percent higher than the top 1 percent of households. The nationwide average effective state and local tax rate is 11.4 percent for the lowest-income 20 percent of individuals and families, 9.9 percent for the middle 20 percent, and 7.4 percent for the top 1 percent.


Your note above refers to Figure 3 on the site not the charts you posted.


On the link above check LA, CA and then Dallas, TX on the Zillow column and you will see more home ownership in TX at each level than in CA.

[earthisle]

Originally Posted by expatCA

According to your post and the site:
Rates paid by various household income levels:
Middle 20%: Texas 9.7% vs California 8.3%
Poorest 20%: Texas 13% vs California 10.5%
Top 1%: Texas 3.1% vs California 12.4%


The lower one’s income, the higher one’s overall effective state and local tax rate. On average, the lowest-income 20 percent of taxpayers face a state and local tax rate more than 50 percent higher than the top 1 percent of households. The nationwide average effective state and local tax rate is 11.4 percent for the lowest-income 20 percent of individuals and families, 9.9 percent for the middle 20 percent, and 7.4 percent for the top 1 percent.


Your note above refers to Figure 3 on the site not the charts you posted.


On the link above check LA, CA and then Dallas, TX on the Zillow column and you will see more home ownership in TX at each level than in CA.

Right, that's what I'm saying, it's percent of income paid. As far as I know, burden refers to fraction of total taxes shouldered by each group. For example you often see the statistic that the top 10% of taxpayers pay half of federal taxes (or whatever)

I looked at the ownership rates for Austin vs Sacramento and I was surprised. The middle quintile is higher ownership in Austin, but the one just below is higher ownership in Sacramento. I wonder if that's because retired people are more likely to stay in their homes due to lower property taxes in California?