Lone Star Success News

Texas Doesn’t Break Your Bank

October 9th, 2014

by Susan Combs

Growing up as the daughter of a very cost conscious father had the beneficial effect of making me cost conscious as well. When you never know if it is going to rain over the summer, or whether there will be enough wind to turn the windmill up the hill to make sure we had water down at the ranch house, you are very aware of things beyond your control.

So when you do have the chance to exert some control over your finances, it is a big relief. As a kid, I would do household jobs and occasionally I even got paid for them. Quite a treat. And I kept my money in a piggy bank. It wasn’t pink but it was shaped like a pig and had a slot running down the back to drop coins in. There was a little dial on the bottom, which you could turn to get your money out.

Today we use banks, and we do a lot of our banking online – although I miss that satisfying “kerchunk” of coins I used to hear when I shook my piggy bank. But whether online or a little ceramic piggy, the goal is the same – save your money. But what if someone could come up to you and physically take the money you had put aside?

Taxes have a way of doing that. You got paid to do a job, or you had accumulated some money, and then you have to take a portion of that and give it to government. It may be the federal government, which is taking an ever-increasing part of our money. It may be the city or county where you live – through property tax or some other form of taxation. Sometimes it doesn’t seem very visible. But if you absolutely knew a state was going to take a big slice of your piggy bank, you might try to guard it.

That is what makes Texas so attractive to people trying to guard their piggy banks. The state of Texas does not have a state income tax. So people trying to keep more of their hard-earned money are moving here. In big numbers.

As our video this week shows, places like Oregon, New York, Minnesota, and California, to name a few, take a bunch of change from your piggy bank if you live in those states. Even though it is not technically a state, Washington, D.C., also imposes a “state” income tax on its local residents and takes a whack at their piggy bank – to the tune of 8.9%. Take a look:

OUCH! If you’ve lived in a state that took an income tax sledge hammer to your piggy bank, you know the crunch those little pink guys are feeling! And if you want to hang onto your pennies and dollars, you have to think about where you want to live and why. And you have to elect leaders that are going to protect your piggy bank!

Texas is a place that continues to reward thrift, hard work, enterprise and innovation, and while you may not be able to control wind or rain, here in Texas, you can have some control over your own personal piggy bank.

One reason for our Lone Star Success is that we won’t break your piggy bank with state income taxes. Maybe those other states will learn a few things from us.

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Susan Combs
Texas Comptroller of Public Accounts

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