Deep in the heart of Texas is something that just about any American can admire: there are low taxes in Texas.
To some people, Texas may be a weird place, but not when it comes to money.
Anybody living in California today faces the Golden State’s tax trap. California has the nation’s highest sales tax, the highest gasoline tax, and the highest top bracket for the personal income tax: 13.3 percent.
California also has the nation’s the seventh highest corporate income tax. The California State Legislature is the highest paid in the nation.
Now take a look at the low taxes in Texas.
Texas has no state income tax. In California, a person earning over $500,000 a year pays a state income tax of 12.3 percent. If a Californian’s income is over $1 million, the tax rate jumps to 13.3 percent.
The gasoline tax in Texas is 38.4 cents a gallon. This figure includes the 18.4 cents a gallon charged by the federal government. By contrast, California’s gasoline tax is 71.9 cents per gallon (again, including the federal tax of 18.4 cents a gallon).
Texas has a sales tax of 6.25 percent. The comparable number for California is 7.5 percent. However, local jurisdictions in California can add substantial amounts to the sales tax. In Concord, for example, the sales tax is 9.0 percent.
In terms of corporate taxes, low taxes in Texas is serious, where charges are between 0.5 percent and 1.0 percent if a business has annual revenue exceeding $1 million. In California, look out: the corporate income-tax rate is 8.84 percent!
These tax numbers come from the Federation of Tax Administrators.
So which is it: low taxes in Texas or the California tax trap? California has nice beaches, great scenic wonders (like Yosemite), and a pleasant climate. But when it comes to money, the Lone Star States wins big.
And remember, April 15 is only days away.