Iowa has progressive income tax rates from 4.4% to 5.7%, while Texas has no state income tax (0%). Moving from Iowa to Texas saves $5,400/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.

By Daniel, Founder of CountryTaxCalc

Daniel has spent 5+ years researching tax systems across 95+ countries and all US states to make tax comparison accessible to everyone. For corrections, contact us.

Last Updated: April 2026

The Big Picture

🌽 Iowa

4.4-5.7%

Progressive

4 brackets, up to 5.7%

🤠 Texas

0%

No Income Tax

Constitutional prohibition

Typical Annual Savings

At $100,000 income:

$5,400

That is $450/month back in your pocket!

Tax Savings by Income Level

IncomeIA TaxTX TaxSavings10-Year
$50,000 $2,400$0$2,400$24,000
$100,000 $5,400$0$5,400$54,000
$200,000 $11,100$0$11,100$111,000
$500,000 $28,500$0$28,500$285,000
💡

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Iowa Pros and 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: 4.4-5.7% progressive costs $5,400 on $100k, $28,500 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 and Cons

✅ Pros

  • Zero income tax: Save $5,400/year on $100k, $28,500 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

Frequently Asked Questions

Q: How much will I save moving from Iowa to Texas?

On $100,000 income, Texas saves $5,400/year (IA 5.4% effective vs TX 0%). Over 10 years: $54,000. On $500,000 income: $28,500/year ($285,000 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 $3,960/year.

Q: 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 (4.4-5.7%), reducing property tax reliance.

Q: 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 $5,400+ 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).

Q: Which state is better for retirees?

Texas wins for retirees: zero income tax on all retirement income (Social Security, pensions, 401k withdrawals), no estate tax. Iowa taxes retirement income at 4.4-5.7% (though Social Security is exempt). However, Iowa has lower property tax (1.50% vs TX 1.74%). Choose TX for tax savings on retirement withdrawals. Choose IA for four seasons, lower property tax, proximity to family in Midwest.

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