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Comment by tomrod | Hacker News Reader

All true. Texas worker environment is not great though. Folks typically list income tax as an advantage but property and sales taxes more than make up the difference. Also, govt admin is fairly hostile to any infrastructure expansion, preferring to let the local car dealers buy new town charters with no infrastructure.

Environmental regs are not well managed generally.

Anyhow, not the worst state, not the best. Pretty balanced economy, like Ohio, Illinois, California, and Georgia.

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Higher property taxes and low income taxes is preferable actually, it keeps the housing market from getting massively distorted.

Ideally you're correct - but it does have the very large side effect of making real estate fraud much more lucrative. This isn't to say that the potential of people breaking a law means we shouldn't have the law at all - but higher property taxes necessitate a much large spend into property value auditors and require a lot more stringency around property improvement permitting to ensure that increases in property value are captured and recorded accurately.

How much fraud we talking? I like to think along Matt Levine's ideas that at least some amount of fraud is acceptable - there will always be some amount of it and under or over-regulation creates a net-negative.

Tough to measure. A couple data points:

-NY state estimate $150–200M per year lost to real estate transfer tax fraud and evasion. On $3B receipts that is 5-6% breakage.

-Harris County (Houston) found $21M in improper homestead exemptions. On ~$7B receipts that is ~0.3% breakage

-Miami-Dade found $35M on $6.5B for improper homestead exemptions, 0.5% breakage

For comparison, IRS net tax gap is about 12%

One would expect transfer tax fraud/evasion to be an order of magnitude different from improper homestead exemptions.

For sure. Probably should be using the total homestead exemption eligibility as the denominator instead of prop tax receipts. Even then transfer tax is a "hill" and the homestead exemption is a "valley." But It's hard enough to estimate any of this data from a keyboard in a few seconds

Except the property taxes aren't based on the actual price paid. The tax assessment and appeal system is more prone to corruption than most states.

> Folks typically list income tax as an advantage but property and sales taxes more than make up the difference.

No, not really. Texas is still below average state taxes and you can see the breakdown of each state here:

https://en.wikipedia.org/wiki/State_income_tax#/media/File:S...

Yep, exactly what I mentioned, more than makes up for it especially once you factor in the higher Case Schiller on recent years causing increases to property taxes since 2022 (date of your image).

> preferring to let the local car dealers buy new town charters with no infrastructure.

I'm curious what this is referring to.

Probably talking about Starbase (elon musk).

Ahh don't know why I missed that one.

Local state legislature has several car dealership owners that also started their own chartered towns. Wasn't thinking about starbase but that qualifies.

Did you have an example you wanted to share?

.. and why it's even a problem.

"Good ole boy network" is real!

Texas wouldn't be texas without it

It could be so much more without it!

You can always move somewhere else. It's a big country with different state laws for every type of preference.

What a strange thing to say - - "sucks to be you if you don't like it, just leave" is not really how I'd expect people to have a conversation around identified policy gaps, especially among people that aren't there.

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