Friday, March 9, 2012

Taxes in Texas

Texas is a great state to live in because our tax system works differently than other states, and usually it works out to our advantage. A small family living in on a small property does not have to pay any income tax, and will most likely have a low property tax on their land- not, of course, in comparison to other state's property tax, but in comparison with larger land plots in Texas. Our property tax is nearly double that of most other states. This is because we are not taxed on our income, and therefore the government makes up for losses in income tax by doubling the property tax. It's a fairly simple concept to understand. While Governor Perry was still in the presidential race, he said the following in a primary debate in Florida, "because they know there's still a land of freedom in America, freedom from overtaxation, freedom from overlitigation and freedom from overregulation, and it's called Texas. We need to do the same thing for America."

The weakness of this model, as explained in this star telegram article, is that our state looks highly unattractive to companies that need vast amounts of land for development, factories or for storage to operate their businesses. While the corporate tax rate is also low, the property tax for running a large scale operation would be astronomical. This article explains that Texas, in reality, actually has a medium to high tax rate. Texas also has the 5th most regressive tax model in the country. 

Read more here:

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