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HEAD-TO-HEAD TAX COMPARISON · 2026

COUNTRY A Iowa VS COUNTRY B Texas

Side-by-side analysis of income tax, effective rates, and take-home pay for Iowa and Texas in 2026.

Daniel · CountryTaxCalc Updated May 2026 Tax Comparison 2026
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OVERVIEW
Iowa has a flat 3.8% income tax rate (reduced from 8.53% in 2022), while Texas has no state income tax (0%). Moving from Iowa to Texas saves $3,800/year on $100k income. However, Texas has higher property taxes (1.74% vs IA's 1.50%) and higher sales tax (8.20% vs 6.94%). Overall, Texas offers tax savings for high earners and renters, while Iowa is competitive for homeowners with expensive properties. Both states see migration driven by job opportunities and housing affordability.
Section 01

The Big Picture

Top-line rates and effective take-home for a typical earner — including income tax, social contributions, and applicable surcharges.
🌽
COUNTRY A
Iowa
TAX RATE
3.8%
Flat Rate
Flat 3.8% since 2025, down from 8.53% top rate in 2022
🤠
COUNTRY B
Texas
TAX RATE
0%
No Income Tax
Constitutional prohibition
TYPICAL ANNUAL DIFFERENCE
Moving from Texas → Iowa at $100,000
$3,800
That's $317/month back in your pocket
Section 02

Tax Savings by Income Level

Net take-home after all income tax, social contributions, and surcharges — for a single employee with no dependents.
GROSS INCOME
🌽 IA TAX
🤠 TX TAX
SAVINGS
10-YEAR
$50,000
$1,900
$0
$1,900
$19,000
$100,000
$3,800
$0
$3,800
$38,000
$200,000
$7,600
$0
$7,600
$76,000
$500,000
$19,000
$0
$19,000
$190,000
💡

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🌽

Iowa Pros & Cons

+ PROS
  • Lower property tax: 1.50% (vs TX 1.74%) saves $600-$2,400/year
  • Lower sales tax: 6.94% (vs TX 8.20%) saves $126/year
  • Four seasons: Fall foliage, winter snow (vs TX heat year-round)
  • Lower cost of living: Housing 15% cheaper than Dallas/Houston
  • Better schools: IA ranks #10 vs TX #34 in K-12 education
− CONS
  • Income tax: 3.8% flat costs $3,800 on $100k, $19,000 on $500k
  • Harsh winters: -10°F, snow, ice (vs TX mild winters)
  • Limited job market: Des Moines 700K vs Dallas 7.6M metro
  • Brain drain: Young professionals leave for Chicago/Minneapolis
  • Rural isolation: Outside Des Moines, limited amenities
🤠

Texas Pros & Cons

+ PROS
  • Zero income tax: Save $3,800/year on $100k, $19,000 on $500k
  • Business-friendly: No corporate income tax, lower regulations
  • Job growth: Austin/Dallas tech boom (Tesla, Oracle, Apple)
  • No retirement tax: $0 on Social Security, pensions, withdrawals
  • Sunny weather: 300 days sunshine (vs IA 200 days)
− CONS
  • Higher property tax: 1.74% (3rd highest in US) costs $600-$2,400 more/year
  • Higher sales tax: 8.20% (vs IA 6.94%) costs $126 more/year
  • Very hot summers: 100°F+ regularly (vs IA mild 85°F)
  • Car-dependent: Dallas/Austin require cars (no walkable transit)
  • Flat/dry landscape: Desert vs IA rolling farmland
FAQ

Frequently Asked Questions

How much will I save moving from Iowa to Texas?

On $100,000 income, Texas saves $3,800/year (IA 3.8% flat vs TX 0%). Over 10 years: $38,000. On $500,000 income: $19,000/year ($190,000 over 10 years). However, TX property tax is higher (1.74% vs IA 1.50%). On a $600k home, TX pays $10,440/year vs IA $9,000/year—difference of $1,440/year. For homeowners, this reduces net tax savings to $2,360/year.

Why are Texas property taxes so high?

Texas has 3rd highest property tax in US (1.74%) because with zero income tax, TX must fund all services through property/sales taxes. School districts alone levy 1.0-1.5%. Cities, counties, and special districts add more layers. This 'hidden taxation' replaces income tax most states charge. Iowa funds services through income tax (3.8% flat), reducing property tax reliance.

Is there significant Iowa to Texas migration?

Yes. In 2023, 4,872 people moved IA → TX (vs 2,134 TX → IA), net gain of 2,738 for Texas. Migration drivers IA → TX: no income tax (save $3,800+ annually), job opportunities (Austin/Dallas booming), warmer weather. Migration drivers TX → IA: four seasons, better schools, family ties, lower housing costs (Des Moines 15% cheaper than Dallas).

Which state is better for retirees?

Both states are excellent for retirees on income tax: Iowa fully exempts all retirement income since 2023 (Social Security, pensions, 401k/IRA withdrawals all tax-free), and Texas has no income tax at all. Neither state taxes retirement income. The real differentiator is property tax: Iowa's 1.50% vs Texas's 1.74% (3rd highest in US). On a $400k home, Iowa saves $960/year in property tax. Choose TX for no income tax on working income and business-friendly environment. Choose IA for lower property tax and four seasons.
From the brief
PT38.4%−9.6 vs. headline
CY17.8%incl. 60-day rule
AE 0.0%substance required
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