🌴 California vs Texas Tax Comparison 2025

See exactly how much you'll save by moving from CA to TX

The Big Picture

🌴 California

13.3%

Highest in the Nation

9 progressive brackets
1% - 13.3%

⭐ Texas

0%

No State Income Tax

Constitutional prohibition
on income tax

💰 Typical Annual Savings

At $100,000 income:

$5,762

That's $480/month back in your pocket!

Calculate Your Personal Savings

Your Tax Comparison

California

Income: $0

State Tax: $0

Take Home: $0

Texas

Income: $0

State Tax: $0

Take Home: $0

🎉 Your Annual Tax Savings in Texas

$0

Tax Savings by Income Level

Income CA State Tax TX State Tax Annual Savings 10-Year Savings
$50,000 $1,711 $0 $1,711 $17,110
$75,000 $3,349 $0 $3,349 $33,490
$100,000 $5,762 $0 $5,762 $57,620
$150,000 $10,991 $0 $10,991 $109,910
$250,000 $22,471 $0 $22,471 $224,710

California Pros & Cons

✅ Pros

  • Perfect weather year-round
  • Tech hub (Silicon Valley, SF, LA)
  • World-class universities (Stanford, Berkeley, UCLA)
  • Ocean access, mountains, deserts
  • Progressive policies, diversity
  • Entertainment industry capital
  • Strong worker protections

❌ Cons

  • Highest state income tax (13.3%)
  • Extremely high cost of living
  • Housing crisis (median home $800k+)
  • Traffic congestion
  • High sales tax (7.25%-10.25%)
  • Wildfire risk
  • Water scarcity issues

Texas Pros & Cons

✅ Pros

  • 0% state income tax
  • Affordable housing ($300k median)
  • No personal property tax
  • Booming economy (2nd largest GDP)
  • Tech growth (Austin "Silicon Hills")
  • Business-friendly policies
  • No estate tax

❌ Cons

  • High property taxes (1.6% average)
  • Hot, humid summers
  • Hurricane risk (coastal areas)
  • High sales tax (6.25%-8.25%)
  • Less public transportation
  • Fewer worker protections
  • Power grid concerns

The Real Cost of Living Difference

🏠 Housing Comparison

San Francisco 2BR: ~$3,500/month

Austin 2BR: ~$1,800/month

Savings: $1,700/month ($20,400/year)

🏡 Property Taxes

California: ~0.76% of home value (Prop 13 limits increases)

Texas: ~1.60% of home value (no state income tax offset)

On $500k home:

  • California: $3,800/year
  • Texas: $8,000/year
  • Difference: $4,200/year more in TX

⚠️ The Trade-off

At $100k income:

  • Save $5,762/year on income tax in TX
  • Pay ~$4,200/year more on property tax in TX (on $500k home)
  • Net savings: ~$1,562/year

BUT: Housing is SO much cheaper in TX that you might buy a bigger/nicer home for the same price, making the property tax difference feel larger.

When Moving to Texas Makes Sense

✅ Move to Texas if you:

  • Earn $75k+ (bigger tax savings)
  • Work remotely or in tech/energy/finance
  • Want to buy a house (way more affordable)
  • Are starting a business (better policies)
  • Can handle hot weather
  • Value lower cost of living over beaches

⚠️ Stay in California if you:

  • Work in entertainment/Hollywood
  • Need specific CA tech ecosystem (deep specialization)
  • Have strong family/social ties
  • Value weather and outdoor access above all
  • Earn under $50k (tax savings are small)
  • Can't handle humidity and heat

The Tech Migration: Why Companies Are Moving

Since 2020, major companies have relocated from CA to TX:

Why they're moving:

  1. Corporate tax savings - No state corporate income tax in TX
  2. Employee retention - Lower cost of living = competitive salaries go further
  3. Office space costs - Austin/Dallas ~50% cheaper than SF/LA
  4. Business incentives - TX offers aggressive relocation packages

Best Texas Cities for CA Transplants

🎸 Austin

Best for: Tech workers, creatives, outdoors enthusiasts

Vibe: "Keep Austin Weird" - liberal, artsy, music scene

Salary: Tech salaries 70-80% of SF but housing 50% cheaper

🏢 Dallas

Best for: Finance, corporate, families

Vibe: Business-focused, suburban, traditional

Salary: Strong corporate jobs, major HQs

🚀 Houston

Best for: Energy, healthcare, aerospace

Vibe: Diverse, international, humid

Salary: High energy sector salaries

🌵 San Antonio

Best for: Affordability, culture, retirement

Vibe: Historic, family-friendly, relaxed

Salary: Lower than Austin/Dallas but very affordable

Frequently Asked Questions

Q: Can I really save $5,000+ per year?

A: Yes, at $100k income you'll save $5,762/year on state income tax alone. However, factor in higher property taxes if you buy a home. Total savings depend on your lifestyle.

Q: What about federal taxes?

A: Federal taxes are the same in both states. This comparison focuses on state income tax only. You'll pay the same federal rate regardless of where you live.

Q: How do sales taxes compare?

A: Similar - CA: 7.25%-10.25%, TX: 6.25%-8.25%. Slightly lower in TX on average, but not a major differentiator.

Q: Will I really feel the difference?

A: At $100k+, absolutely. That's $480/month extra in your paycheck. Plus dramatically lower housing costs. The combination can improve quality of life significantly.

Q: What's the catch?

A: Property taxes are higher in TX. Summer heat is intense. You lose ocean access and perfect weather. It's a trade-off, not a pure win.

Q: Do I need to change my job?

A: Not necessarily. Many CA companies now allow remote work from TX. Or look for jobs with companies that moved to TX (Tesla, Oracle, etc.).

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