midtownguy Posted November 23, 2005 Share Posted November 23, 2005 When I first moved here several years ago, I thought it was great that I finally lived in a state with no income tax. I used to brag to my friends: we don't have an income tax, after the govt takes it's share, we're done. I felt that it was great because I'd rather spend my money the way that I wanted, rather than have a government entity take it from me. That, combined with Houston's low cost of living made getting a paycheck here a dream. That was UNTIL I decided I want to buy a house. I'm blown away. My thoughts now? This state desperately needs an income tax. I'm seeing $150,000 properties with $5,000 a year tax bills. There have been plenty of properties that I've seen that are within my price range - until I see the tax bill. I know dual-income couples that are shelling out $600 per month JUST in property taxes alone. It's absurd. The Texas tax structure makes homeownership a detriment. Homeownership, in the long run, is better for local communities. Don't get me wrong, I"m not necessarily pro-tax, pro spend, but, damn, it just seems that the property tax rates here are outrageous. Quote Link to comment Share on other sites More sharing options...
JasonDFW Posted November 23, 2005 Share Posted November 23, 2005 (edited) SNIP... I"m not necessarily pro-tax, pro spend, but, damn, it just seems that the property tax rates here are outrageous.Actually the total tax rate in Texas is pretty reasonable. My parents who live in Wisconsin pay the same tax rate as I do in Dallas yet they also pay income tax. There are certain situations where the state income tax really gets you too.Jason Edited November 23, 2005 by JasonDFW Quote Link to comment Share on other sites More sharing options...
GoAtomic Posted November 23, 2005 Share Posted November 23, 2005 I have raised this question in several discussions with people who own homes in CA, Arizona, up north, and Florida, and as bad as the homeownership tax hit is in Texas, it seems that we get off easy when you factor in the overall lower home purchase prices and the lack of a state income tax.It still sounds bad, though, when my taxes are 33% of my principal payment. What we really ought to gripe about is homeowners insurance rates - they have gone through the roof and you now have less coverage than before. Quote Link to comment Share on other sites More sharing options...
Subdude Posted November 23, 2005 Share Posted November 23, 2005 I think we would be better off to have an income tax and dial back property and sales taxes. That would help encourage home ownership, which I believe isn't as high in Texas as in some states, and could be a less regressive structure w.t.o. sales taxes. Also Texans lose millions because state income taxes are deductible from federal income tax. (Sales taxes are in part currently deductible, but that is new and probably will not last). Quote Link to comment Share on other sites More sharing options...
MaxConcrete Posted November 23, 2005 Share Posted November 23, 2005 The politics of property and income taxes could change once the baby boomers retire in large numbers. Basically, they will own large homes with large property tax bills, but have little taxable income. So they will want to shift the tax burden away from property owners and toward others (ie people with regular income).We're talking about a lot of voters who tend to go to the polls, so their influence could be large. Quote Link to comment Share on other sites More sharing options...
TJones Posted November 23, 2005 Share Posted November 23, 2005 Midtownguy, you need to factor in also, that the $150,000 you are paying for that house is $250,000 in alot of other parts of the country, and they are paying taxes on top of it, and some places have a state tax on top of that. Houston housing market is still one of the best values in the country. Quote Link to comment Share on other sites More sharing options...
jm1fd Posted November 23, 2005 Share Posted November 23, 2005 The politics of property and income taxes could change once the baby boomers retire in large numbers. Basically, they will own large homes with large property tax bills, but have little taxable income. So they will want to shift the tax burden away from property owners and toward others (ie people with regular income).We're talking about a lot of voters who tend to go to the polls, so their influence could be large.But under the current system the old geezers get huge property tax breaks... Quote Link to comment Share on other sites More sharing options...
midtownguy Posted November 24, 2005 Author Share Posted November 24, 2005 Midtownguy, you need to factor in also, that the $150,000 you are paying for that house is $250,000 in alot of other parts of the country, and they are paying taxes on top of it, and some places have a state tax on top of that. Houston housing market is still one of the best values in the country.Actually, no, it's not. Do the numbers. In addition to the super-high property taxes, we have some of the lowest apprecation rates in the country, and the highest homeowners insurance rates in the country.High property taxes + low appreciation + high insurance rates = disaster. Quote Link to comment Share on other sites More sharing options...
ziggy29 Posted November 24, 2005 Share Posted November 24, 2005 Actually, no, it's not. Do the numbers. In addition to the super-high property taxes, we have some of the lowest apprecation rates in the country, and the highest homeowners insurance rates in the country.High property taxes + low appreciation + high insurance rates = disaster.And let's not forget electricity costs. Despite being the so-called "energy capital," Houston has some of the highest electric rates in the country, now at around 16 cents per kilowatt-hour. (A lot of good "energy choice" has done when all of the providers raise their rates in near lock-step.)So even if you can buy a nice house in Houston with mortgage payments of (say) $800 on a $150,000 mortgage, you'll still pay nearly $500 a month in property taxes, about $100-150 a month for insurance and about $300-$400 a month to keep cool in the summer. These are all big reasons why Houston housing prices are among the lowest. If you combine all the monthly costs of owning a home here, it's not that much cheaper than elsewhere. The mortgage tends to be less than the combined cost of taxes, insurance and keeping cool for many homeowners. Quote Link to comment Share on other sites More sharing options...
editor Posted November 26, 2005 Share Posted November 26, 2005 Actually the total tax rate in Texas is pretty reasonable. My parents who live in Wisconsin pay the same tax rate as I do in Dallas yet they also pay income tax. There are certain situations where the state income tax really gets you too.JasonYour parents also get a big fat rebate check back from the state each year to cover a portion of their Winter heating bill.And as much as I hate Wisconsin, their state taxes (and my federal taxes) pay for a mighty fine public radio network. Quote Link to comment Share on other sites More sharing options...
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