Middle class pays higher tax in Texas than California (Los Angeles: sale, buying a home)

[expatCA]

Originally Posted by earthisle

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?

The retirement issue plays a large part, but remember that while TX property tax is higher than in CA, the cost of homes is less so less actual out of pocket costs in TX on average, so the actual amount paid is less. Prop 13 certainly helps homeowners in CA and was one of the best laws passed by .. the people.



I was just in Dallas and the number of homes starting at about $200,000.00 was surprising. New homes and nice ones.

The study is interesting from a statistical point of view, but over all the COL in CA is higher. Pay in most cases is better in CA, but in many TX is equal. The variance or regressive tax policy really comes down to if the poor and the next couple of levels are doing better in CA or TX.



Then while to percents of taxes in the 1st 3 groups is higher in TX, more people in those groups own a home than in CA, so it seem that they are better off even with a slightly higher tax, due to far lower COL and the lower home cost.

[payutenyodagimas]

Originally Posted by expatCA

I was just in Dallas and the number of homes starting at about $200,000.00 was surprising. New homes and nice ones.

a Californian can pay that home in cash after selling his house

can a Texan do the same? sell his house and move to cheaper state?

[earthisle]

Ironically I'm amazed when I look at houses in California, calculate the property tax, and compare to salaries... Apparently I can own a house, but in California rather than Texas.

I work for the state and state jobs in California are mostly in Sacramento. The average house price is lower in Sacramento vs Austin https://www.zillow.com/sacramento-ca/home-values/ https://www.zillow.com/austin-tx/home-values/

Looks like property tax would be about $4000/yr in Sacramento, but in Austin it would be about $10000/yr

Assuming same income I would pay $2200 in state income tax, but at an accurate income for my job it would be more like $4000.

[expatCA]

Originally Posted by payutenyodagimas

a Californian can pay that home in cash after selling his house

can a Texan do the same? sell his house and move to cheaper state?

Yes, there are cheaper states for housing and not buried in snow either.

[JJonesIII]

Originally Posted by earthisle

My comparison is apples to apples. The middle class is households in the middle quintile. I have no idea what your definition of middle class is as you have not explained it. You're just complaining that using the actual middle as a standard is invalid

Yawn. Now we go into "dodge" mode. Gee, I've never seen that before.

So let's reference back to post #45 to show that I did indeed give you my definition of middle class and gave you two links that document what is commonly used to describe Middle Class families. And from the 1st article...

"While some experts define the middle class by income, others define it by lifestyle. Still others say it's a state of mind."

They go on to describe the 5 most common attributes of a Middle Class Family: 1) Income, 2) Wealth (i.e property, investments, etc), 3) Consumption, 4) Aspirations, and 5) Demographics.

The 2nd article goes on to list the Middle Class in the range from $46,153 to $138,460.

To further document your disingenuous claim, this is the recent article based on HUD that is bandied about in the San Francisco forum....

https://www.cnbc.com/2018/06/28/fami...francisco.html

And let's remember that I believe at last claim, 85% of the families in San Francisco could not afford a median price home.

You used the term "Middle Class" instead of Middle Quintile to deceive and paint a narrative (it's as simple as that). Had you used the other term, most would have laughed and said but that's not necessarily the Middle Class since there is a significant difference in the cost of living between CA and TX.

In addition, let's look at how you started the whole conversation with your Straw Man argument....

Originally Posted by earthisle

There seems to be a widespread belief that Texas is a low tax state, and I see that cited very often as a reason people move from California. Perhaps more importantly, it's cited as a reason Texas is better than California.

The widespread belief is that there are no state taxes in Texas. Everyone knows property taxes are higher but most people who are not familiar with the area often claim it's 3% everywhere, and it's not (some areas are in the low 2% range). And no, most people cite that Texas is more "affordable" than California (and it is). And that would certainly be more the reason anyone would say it was better...not the disingenuous straw man that you are using.

[expatCA]

Originally Posted by earthisle

Ironically I'm amazed when I look at houses in California, calculate the property tax, and compare to salaries... Apparently I can own a house, but in California rather than Texas.

I work for the state and state jobs in California are mostly in Sacramento. The average house price is lower in Sacramento vs Austin https://www.zillow.com/sacramento-ca/home-values/ https://www.zillow.com/austin-tx/home-values/

Looks like property tax would be about $4000/yr in Sacramento, but in Austin it would be about $10000/yr

Assuming same income I would pay $2200 in state income tax, but at an accurate income for my job it would be more like $4000.

The primary difference between Austin and Sacramento would be in the size of the home and the size of the lot. In doing a quick check the Houses in Austin were larger than in Sacramento. I picked 2 homes one in each city and checked the property tax rates. The one in Austin was about $2,700.00 more at the same price. The Sacramento one was about $4,400.00 and the TX one was about $7,100.00. Did a quick check and figuring, so it probably can vary by area and if additional taxes like Mello Roos, etc. Picked homes of about the same size and value at the Austin median.


Each person is different, but based on the charts you posted more people in each group own homes in TX than in CA, so TX still, even in Austin, is more affordable even with the salary variances.


I bought in TX and CA and the TX house was about 1/2 the CA house cost. Smaller house but multi acre lot and pool, barn etc.


I also dropped the home cost $100,000.00 in each city and there were more homes available in Austin, including a LOT of new homes, than in Sacramento by about 5 times the number and equal or larger than the Sacramento ones at the higher/median price. Austin is growing.


Note, I prefer Sacramento over Austin. I had family living there for years and a beautiful city.

[JJonesIII]

Let's continue with the fun and look at the family at $62,000 that you claim to be in the Middle Class. In comparing the 3 biggest metropolitan areas of CA (San Francisco, Los Angeles, and San Diego) to Austin, we find the following:

No one in the top 3 metropolitan areas of CA could ever put down a 20% down payment for a home unless they had some prior savings. So let's just look at a $0 down loan. At $62k on income, you could buy a home for $263k. In looking within 30 miles of the city limits, I found one home in the San Francisco Bay Area out in Vallejo



For Los Angeles, I had a little more luck



And for San Diego, the cheapest I could find is $290k



Looking inside of the 30 miles range for Austin....

Here's a nice little home coming in just under $265k



If we go up to the $290k range like San Diego





But the OP claims these are all Middle Class families and the comparison is apples-to-apples

[expatCA]

Originally Posted by JJonesIII

Let's continue with the fun and look at the family at $62,000 that you claim to be in the Middle Class. In comparing the 3 biggest metropolitan areas of CA (San Francisco, Los Angeles, and San Diego) to Austin, we find the following:

No one in the top 3 metropolitan areas of CA could ever put down a 20% down payment for a home unless they had some prior savings. So let's just look at a $0 down loan. At $62k on income, you could buy a home for $263k. In looking within 30 miles of the city limits, I found zero homes for this price in the San Francisco Bay Area (you'd have to be in a mobile home). The closest one I found was this one for $350k



For Los Angeles, I had a little more luck



And for San Diego, the cheapest I could find is $290k



Looking inside of the 30 miles range for Austin....

Here's a nice little home coming in just under $265k



If we go up to the $290k range like San Diego



And then getting to the San Francisco price range



But the OP claims these are all Middle Class families and the comparison is apples-to-apples

The other pics did not come through.


OK, right click and view image and the last 2 did. BIG difference.

[JJonesIII]

Originally Posted by expatCA

The other pics did not come through.


OK, right click and view image and the last 2 did. BIG difference.

Must be some capacity issues. Every time I re-add them, it pulls one or two out. Maybe it's good now.

[JesseD]

The rich can live anywhere, the poor can live anywhere the rich pay for their public benefits (including a lower tax rate). The middle class as defined by the OMB can live in Austin or Sacramento at about the same costs. But the middle class will live at two/thirds the costs in Dallas or Houston as in Los Angeles or San Francisco.

TOTALS COSTS OF LIVING.