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Comment by jedberg | Hacker News Reader

You pay $700k for the house and $2.5M for the weather, stable power grid, and lower taxes (yes, people in Cupertino pay lower overall taxes than people in Austin).

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> people in Cupertino pay lower overall taxes than people in Austin

Only because most people who can afford to buy in Cupertino aren't paying for it with earned income, right? Google tells me a $2.5M mortgage has minimum payments of $230k a year, anyone who makes enough to afford that is probably paying at least $50k/year in CA state income tax, on top of ~$25k in property taxes. Austin has high property taxes but I don't see them coming anywhere close to that, and the sales tax is lower.

Property taxes are a lot lower in California because of Prop 13. For a new buyer, they are about the same. But after just a few years, the Texas property tax will be much higher because California property tax pretty much doesn't go up after you buy. Also energy taxes soak Texans because they use a lot more energy than in California due to the hotter summers and colder winters.

> For a new buyer, they are about the same. But after just a few years, the Texas property tax will be much higher

But do you have 1,700sqft shacks going for $3.2M in Texas ?

One might pay less in taxes in Cupertino, but if the mortgage service is 3.5x what it would be in Austin, then one is still paying a tremendous amount in what amounts to a tax of sorts. Sure, if you have a mortgage you'll be building equity, but also paying more interest than you'll ever build in equity, and you'll depend on ever-increasing property values to begin to make this a worthwhile trade-off.

How do they pay lower overall taxes?

Here is an article on it:

https://www.yahoo.com/video/everything-bigger-texas-includin...

But basically the higher property taxes and additional taxes and fees that Texan's pay on consumption, like energy taxes, end up more than making up for the lack of income tax, unless you're a top 1% earner (which is somewhere around $700k/yr). Energy tax is a big one because Texan's use a lot more energy since they have hotter summers and colder winters.

"About the only Texans who fare better than Californians are the wealthy. The top 1% of earners in Texas — those making $617,900 or more annually — only pay 3.1% of their income in state and local taxes. That compares to a rate of 12.4% for top earners in California, who make $714,400 or more per year."

So if you're a top 1% or more, you save at least 4X in taxes. I'm sure you come out on top in TX financially for the vast majority of people reading this site, $100k+ earners. Everyone I know that moved to Austin from CA did so to avoid paying taxes on cashing out stock options.

> Everyone I know that moved to Austin from CA did so to avoid paying taxes on cashing out stock options.

And a lot of those people are now moving back after that one time tax savings. Heck even Elon is moving back.

> So if you're a top 1% or more, you save at least 4X in taxes

Only income taxes, but property and energy taxes are still higher.

The question was about a Cupertino homeowner vs what that corresponding homeowner would see in Austin. You're linking an article about the median Californian vs median Texan, which -- even accepting its assumptions -- is only superficially relevant, and very unrepresentative for the comparison under discussion.

Even at the lower rate, the property taxes on the Cupertino house alone dwarf any tax difference they would pay for a comparable lifestyle in Austin [1].

To be blunt, but it looks like you deliberately chose a misleading comparison to push the narrative you already settled on. That's below the standard I've come to expect of your comments.

[1] Here's a $3.2m Cupertino home, which shows $40k/year in property taxes. A comparable home in Austin for the $700k the parent mentioned would have ~$14k/year in property taxes. https://www.realtor.com/realestateandhomes-detail/21467-Krzi...

So, paying the $2.5 million ... to pay $26k/year more just in property taxes.

To which one must add interest if one has a mortgage. It's nuts. Not I'm wondering what the shelter situation is like for the bottom 10% in California vs. Texas. And if affordable shelter == long commute, one has to value that time, and the mileage and gas or public transportation costs, etc.

If you don't consider higher cost of shelter a sort of tax...

The cost of shelter for an Apple employee in Cupertino is what, 3.5x the cost of shelter for an Apple employee in Austin? Nuts.

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