When I read this statement by Marc Joffe in a piece at Cato, “Are Taxes Really Lower in California than in Texas?” (spoiler alert: it depends on how you figure it)
WalletHub recently published an analysis of tax burdens by state that included some surprising findings: most notably, that Texas state and local governments impose heavier taxes on median earners than their California counterparts. Of the fifty states plus DC, the Golden State had the 12th lightest tax burden, while Texas ranked 41st.
I immediately hustled over to the analysis at WalletHub comparing total tax burdens by state, pretty sure of what I would find. Of course, Illinois has the higher tax burden in the country (the alternative analysis at Tax Foundation gives no joy—we’re in the six states with the highest burden there).
Two questions immediately come to mind. Why are Illinois’s taxes so high? Our roads are full of potholes and the state contribution to K12 education is one of the lowest in the country. The answers I would give are:
- Illinois is one of the most corrupt states in the country. Our only real competition is Louisiana and that’s saying something.
- Public employees (teachers, police officers, firefighters) are among the best-compensated in the country and we have a lot of them
- Sales taxes and property taxes are high—without Prop 17 California’s taxes would be a lot higher.
The other question, of course, is why do I live here? Largely by accident. I moved to Illinois to attend college and never left. I like my house. There isn’t much to draw me to any other state. It’s better to be going to something than fleeing from something. Almost the only attachments I have to my state of origin, Missouri, are to the dead. Now my closest family are in Iowa, Minnesota, Michigan, Indiana, New York, and Florida and I wouldn’t move to be near any of them.
My personal acquaintance with New Jersey makes me think they could compete with your two choices. Even New Jersey people joke about it.
The WalletHub article was a good one. I am sure it has flaws but it pointed out that taxes are lower in Texas only if you are well above the median income. If you move someplace and you are concerned about taxes you dont want to know the overall numbers but what they are for your own income level. Tactically, this is good for Texas as the people making decision about moving businesses are in the group that will benefit the most from moving. Most of their workers may suffer but too bad.
Steve
Political corruption is a sad category in which to be competing for who has the most.