IS IT TRUE WHAT THEY SAY ABOUT TEXAS AND FLORIDA?
Gov. Gavin Newsom has been repeating a claim that California has lower taxes than Texas and Florida on lower-income residents. For example, on March 7, he posted this on the X platform:
“For the bottom 40% of families, California taxes are LOWER than states like Florida and Texas. In fact, 16 other states tax LOW-WAGE earners MORE than California taxes our HIGH-WAGE earners. The evidence is clear, and the numbers don’t lie.”
Is it true?
The source for that claim is the 7th edition of the “Who Pays?” report from the Institute on Taxation and Economic Policy, or ITEP. The nonprofit, nonpartisan organization studies tax policy in all 50 states to “provide data-driven recommendations on how to shape equitable and sustainable tax systems.”
California has the nation’s highest state sales tax, high local sales taxes added to it, and very high gasoline taxes. The ITEP report calls these taxes “very regressive,” meaning they take a higher share of the income of lower-income people.
California also has a very high state income tax, which even bites into lower incomes. Florida and Texas have no income tax at all.
So how did the researchers come to the conclusion that California has lower taxes on “the bottom 40%” of households than states including Texas and Florida?
This is how: ITEP calculated “the portion of residential real estate taxes passed through to tenants.” And property taxes are lower on long-held apartment buildings in California because of Proposition 13.
Therefore, lower-income households that rent in California pay lower property taxes than lower-income renters in Florida, Texas and other states that don’t have Proposition 13 to keep property taxes under control.
Proposition 13 deserves all the credit for lowering the tax burden on lower-income households in California compared to other states measured in the ITEP study.
We’ll let the governor know.