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> Though Texas has no state-level personal income tax, it does levy relatively high consumption and property taxes on residents to make up the difference. Ultimately, it has a higher effective state and local tax rate for a median U.S. household at 12.73% than California's 8.97%, according to a new report from WalletHub. Obviously there are more than two states, but it’s not so simple. Plus, someone’s got to pay for everything: > [California] receives $0.99 in federal expenditures per dollar of taxes paid, which is below the national average return for states of $1.22 per dollar paid, according to its review of a 2015 New York Comptroller study. |
Bizarrely, even experts miss this obvious fact. If not income taxes, then how does government pay the bills? Income taxes are usually the most progressive tax, so no income tax usually means less wealthy people pay more. If government spends less, what services are cut?
No income tax != free lunch. Someone has to pay.