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The Pros And Cons Of Texas State Income Tax

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Texas is one of seven states that doesn’t have state income tax. This doesn’t mean Texas
Residents pay less in taxes than the states that have a state tax. All states must generate revenue and they do so through various taxes including income taxes, sales taxes, and property taxes, just to name a few. (Longley) Texas has a state sales tax rate of 6.25%, but once you add in taxes from counties, cities, transit, and special purpose districts, the tax rate reaches 8.25%. (Texas) There are pros and cons to Texas not having state taxes. Overall Texas still receives a fair amount of taxes by collecting sales tax and property tax. Most Texans pay more in taxes than places such as Californians, but rich Texans pay a lot less. That's great for rich …show more content…

Texas does outperform other states in terms of economic growth and population growth. Many people move to Texas because of the jobs and they do taxes right. (Batheja, 2013) Gov. Rick Perry believes Texas’s performance through the recession is due to lack of income tax. He says “You can stop trying to figure out how to pay the state income tax, because we don’t have one.” (Batheja, 2013) The Tax Foundation, a conservative-leaning research group, ranks Texas ninth-best on its State Business Tax Climate Index, largely because of the state’s lack of an income tax. (Batheja, 2013) On the other hand, Texas’s high property taxes remains a crucial complaint among business and homeowners. It’s harder for small business to pay their taxes especially if their business wasn’t very profitable. Small business end up using their own personal savings, mortgages, or borrow money in order to pay their taxes. Having a state tax would benefit small business. Although having no state tax is accepted by many, it puts a dent on cities and towns. Local debt has increased over the past decade, in large part to cover the costs for new schools and public maintenance projects. (Batheja, 2013) The state is pushing projects such as building of highways and roads to cities and counties. (Batheja, 2013) In 2012, more than 500 lawsuits were from school districts arguing that our public education isn’t properly

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