In what way does TX make up for the lack of state income tax? (Houston: sales, renter)

[Ronaldon]

Hi,

As a self-employed person, I can potentially save about $20k/year if I move to Austin, Texas. This is the amount I pay in state income tax in CA. However, I've seen people say that Texas has other ways to make that money. So is there anything that I'm missing aside from property tax? (I'd rent for now, so this doesn't apply yet.) Will I be able to save those $20k/year, or is there something else that I'll be spending on that I haven't in CA?

[centralaustinite]

Mainly just property tax, and of course, expect a low level of social services in exchange.

[Novacek]

Some from oil and gas revenue as well (California actually has some of this, but not as much per-capita).

[Eastcoasting]

Well, do have motorized vehicular transportation right now?

If so, you're cool

If not and you move to Austin you will probably wind up with a car.

This would be a way that you might bleed some clams.

Public transit is skeletal.

[mowilly]

If you move here, you're about to spend a lot more money on breakfast tacos.

[rangergrit]

That $20K you are talking about isn't very important. You asked the wrong question.

[beasley106]

Well the tax burden is low compared with California/Northeastern US but Texas still has higher property taxes/sales taxes and a generally higher cost of living compared with other states. Not to mention things like higher homeowners insurance rates and tolls in major cities such as DFW/Houston/Austin.

[Ronaldon]

Originally Posted by rangergrit

That $20K you are talking about isn't very important. You asked the wrong question.

Why is $20k not important? What would be the right question to ask?

Originally Posted by beasley106

Well the tax burden is low compared with California/Northeastern US but Texas still has higher property taxes/sales taxes and a generally higher cost of living compared with other states. Not to mention things like higher homeowners insurance rates and tolls in major cities such as DFW/Houston/Austin.

Got it. But property taxes and HOI doesn't apply to me if I rent, correct? And I'm only comparing with CA. I understand there are cheaper places than Austin, TX out there.

[blakely]

Originally Posted by Ronaldon

Hi,

As a self-employed person, I can potentially save about $20k/year if I move to Austin, Texas. This is the amount I pay in state income tax in CA. However, I've seen people say that Texas has other ways to make that money. So is there anything that I'm missing aside from property tax? (I'd rent for now, so this doesn't apply yet.) Will I be able to save those $20k/year, or is there something else that I'll be spending on that I haven't in CA?

FYI, property tax may well affect you as a renter because landlords will need to recoup their taxes in their rental fees. So it should be passed through, albeit indirectly.

[Austin97]

texas and california sales tax are about the same (vary by locale)