Which state has lower taxes overall, California or Texas?

It depends on your income and home value. Texas has no state income tax, while California has the highest top income tax rate in the country (up to 13.3%). However, Texas property taxes are among the highest in the U.S. (about 1.80% of home value versus California's effective 0.73%). For high earners who rent, Texas is almost always cheaper. For homeowners with modest incomes, California's lower property tax can partially offset the income tax — though California still usually costs more in total.

How high are California state income taxes?

California has a progressive income tax with rates from 1% to 13.3% (the top rate includes a 1% mental health services tax on income over $1 million). For a single filer, the 1% bracket starts at the first dollar and the top 13.3% rate applies above roughly $1 million in 2024. Brackets are indexed for inflation. Married couples filing jointly have roughly double the bracket widths. The comparison applies the progressive brackets to your income.

Why are Texas property taxes so high?

Because Texas has no state income tax, local governments fund schools, roads, and services primarily through property taxes. The average effective property tax rate in Texas is about 1.80% of home value per year, more than double California's effective 0.73%. On a $500,000 home, Texas property tax is about $9,000 per year versus $3,650 in California — a $5,350 annual difference that partially offsets Texas's income tax advantage.

At what income does Texas become cheaper than California?

The crossover depends on your home value. For a homeowner with a $500,000 home, Texas becomes cheaper once California income tax exceeds the roughly $5,350 annual property tax gap. For a single filer that happens at a relatively low income (around $60,000 to $80,000 of taxable income). For high earners, Texas is dramatically cheaper — a $300,000 earner with a $500,000 home saves roughly $20,000 to $25,000 per year in Texas. Run both scenarios with your numbers to find your crossover.

Does California's Proposition 13 cap property taxes?

Yes. Proposition 13 limits assessed value increases to 2% per year until the home is sold, so long-term homeowners pay far less than new buyers at the same home value. The 0.73% effective rate reflects the average across all homes, but a recent buyer in California can pay closer to 1.0% to 1.2% of purchase price. The comparison uses the average effective rate for simplicity; if you are a recent California buyer, your property tax burden may be higher than shown.

Are there other cost differences between California and Texas?

Yes — beyond taxes, the overall cost of living differs significantly. California has higher home prices, rent, gas, and utilities, while Texas is generally cheaper on those fronts. California also has a higher state sales tax (base 7.25% plus local add-ons) versus Texas (6.25% plus local). The comparison focuses on income and property taxes, which are the largest state-driven differences; pair it with our cost of living calculator for the full picture.

California vs Texas: Cost of Living & Salary Calculator

A California vs Texas cost of living comparison tool is a free online tool that compares two popular states. It shows income tax, property tax, cost of living differences, and the salary equivalence needed to maintain your standard of living. Free, no sign-up required.

State Comparison Inputs

Annual Income?Your total gross annual income before taxes and deductions.

Home Value?Enter your home value.

California uses the 2024 single-filer progressive brackets (1%–13.3%) and a 0.73% effective property tax. Texas has no state income tax and a 1.80% effective property tax.

End of inputs

California vs Texas

Metric	California Progressive income tax (1%–13.3%) + 0.73% property tax	Texas No state income tax + 1.80% property tax
State Income Tax	$10,608.85	$0.00
Property Tax	$3,650.00	$9,000.00
Total Tax Burden	$14,258.85	$9,000.00
Disposable Income	$135,741.15	$141,000.00

Texas leaves $5,258.85 more disposable income per year.

Key Insights

California income tax on $150,000.00 is $10,608.85 (progressive 1%–13.3% brackets); Texas income tax is $0.00.

Texas property tax ($9,000.00 at 1.80%) is $5,350.00 higher than California's ($3,650.00 at 0.73%) on a $500,000.00 home.

Texas wins because the $10,608.85 income-tax savings more than offset the $5,350.00 higher property tax — high earners with modest homes benefit most.

Guide

How to Use This Calculator

1Enter your annual income (the amount subject to state income tax).
2Enter your home value (used to compute property tax in each state).
3Review the side-by-side comparison: state income tax, property tax, total tax burden, and disposable income for California versus Texas.
4Read the AI Insight panel for a personalized take on which state leaves you with more money and where the crossover point lies.
5Adjust income and home value to see how the comparison shifts — high earners with modest homes benefit most from Texas, while low earners with expensive homes see a smaller gap.

Formula

How It's Calculated

CALIFORNIA SCENARIO:
  stateIncomeTax = progressive CA brackets (1% to 13.3%)
    Income is taxed across brackets; each rate applies only to income
    within that bracket. The top 13.3% rate applies above $1M (single).
  propertyTax = homeValue × 0.0073   (average effective rate)
  totalTaxBurden = stateIncomeTax + propertyTax
  disposableIncome = annualIncome − totalTaxBurden

TEXAS SCENARIO:
  stateIncomeTax = 0   (no state income tax)
  propertyTax = homeValue × 0.0180   (average effective rate)
  totalTaxBurden = propertyTax
  disposableIncome = annualIncome − totalTaxBurden

COMPARISON:
  California's income tax scales with income, while Texas's property
  tax scales with home value. High earners with modest homes benefit
  most from Texas; low earners with expensive homes see a smaller
  gap because California's low property tax offsets part of its
  income tax. The state with the higher disposableIncome wins.

Glossary

Key Terms

FAQ

Frequently Asked Questions

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