I don't get the no state income tax hype (Frisco: real estate, insurance)

[unknown00]

All outsiders think the hype is real, and I get it if you rent, but I'd rather pay 5%-10% extra state income on my salary than pay an extra 1% on my house lol

[usc619]

It’s a conservative ideology scam, they’re going to beat you in property taxes anyways.

[numbersguy100]

It's a very good deal for high income earners. When real estate was cheaper it was easier to make the case that can pick your tax rate if you just buy/consume cheaper housing. But that argument isn't is winner with where prices are these days. The bigger issue with crossing the line into an income tax is that you'll start it just low enough to fund some programs that we can probably all agree are worthwhile, and taxing some really wealthy people whose lives will be affected in only a limited way by the extra taxes. Then the "needs" will expand (rather quickly) and the rate will have to go up, for more people, lower in the income distribution. It's the same reason everyone should reject a national "wealth tax" in the US. It sounds great when you say that it's only supposed to tax people with a net worth over $100 million (or pick your high number). It will never stay that high. If it's reasonable to tax someone with $100 million in net worth, it's probably reasonable to tax someone with $50 million...... rinse and repeat until lots of people are paying it who were never supposed to be affected.

[Ralph_Kirk]

Originally Posted by unknown00

All outsiders think the hype is real, and I get it if you rent, but I'd rather pay 5%-10% extra state income on my salary than pay an extra 1% on my house lol

Except that my property tax in Illinois was more than my property tax in Texas...and I had to pay a state income tax on top of that.

I suspect that even paying a higher property tax, people who have only one or the other but not both always make out better. And what state has no property tax?

[escanlan]

Originally Posted by unknown00

All outsiders think the hype is real, and I get it if you rent, but I'd rather pay 5%-10% extra state income on my salary than pay an extra 1% on my house lol

What "extra 1%" are you referring to?

[unknown00]

Originally Posted by Ralph_Kirk

Except that my property tax in Illinois was more than my property tax in Texas...and I had to pay a state income tax on top of that.

You literally picked 1 of like the 5 states that has a higher property tax than TX lol

Originally Posted by escanlan

What "extra 1%" are you referring to?

On average, I know "it depends", TX property tax is about 1% more than other major states

[Wittgenstein's Ghost]

You pay for it in rent, too. It's just baked into your rent. Any would-be investor is running numbers that include taxes and insurance.

More people should look at overall tax burden. Texas is normally on the better end of things, but it's of course not like the superficial hype would lead an uninformed person to believe. And, as the last couple years have shown, a scenario where housing suddenly goes bonkers significantly increases tax burden and leaves many local jurisdictions with an abundance of cash.

I personally prefer a state income tax as a general societal preference, but both have their pros.

I pay $2700 per year in property taxes on my house in Colorado, which is worth about $800k. That same house in Frisco would be about $16,000 per year. The Colorado state income tax rate is 4.55%, so my break even income level would $292,000 plus the $25,000 standard deduction for married filers, meaning I'm better off in Texas in my same house if I make $307,000 per year or more. There are a few nuances I'm not accounting for, but I think that's a good picture of the situation.

I honestly don't know what portion of people who make $307,000 per year live in houses more or less expensive than $800k, but this goes to show that one's housing preferences play a big role in which sort of system is preferable.

[1200RT]

Originally Posted by unknown00

All outsiders think the hype is real, and I get it if you rent, but I'd rather pay 5%-10% extra state income on my salary than pay an extra 1% on my house lol

Is this a mathematically accurate statement?

How much would you pay in income tax in another state and what is your current property tax, +1%?

Signed, someone who deals with all of the above.

[Ralph_Kirk]

Originally Posted by unknown00

You literally picked 1 of like the 5 states that has a higher property tax than TX lol

Only an anecdote of my own experience.

On average, I know "it depends", TX property tax is about 1% more than other major states

Only 1 percent? Then the difference in taxes for the average home would be less than the state income tax those people would pay. So, most people would save money in Texas.

[unknown00]

Originally Posted by 1200RT

Is this a mathematically accurate statement?

For me yes, obviously everyone's numbers are different. 10% off my salary is less than 1% of property tax