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California Governor Gavin Newsom’s recent claims that his state is more tax-friendly for the middle class than Texas and Florida have been challenged by economic experts who say the data tells a different story.
At the SXSW conference in Austin, Newsom boldly stated, “Your middle class pays more taxes in Texas than our middle class in California,” and described California as having the most “progressive tax rates in America.” He further characterized Florida and Texas as “the REAL high-tax states” in a post on social media platform X.
These assertions have drawn significant scrutiny, particularly from Just Facts President James Agresti, who conducted a comprehensive analysis of tax burdens across the three states. His findings paint a starkly different picture.
“I looked at how much each state taxes its citizens on average. California collects about $10,000 a year in taxes for every person in the state, whereas the figures for Texas and Florida are only about $5,000, or about half as much,” Agresti told Fox News Digital.
Even when adjusting for California’s higher income levels, Agresti found that “California taxes about 14% of its economy, as opposed to 9% for Texas and Florida.”
The tax structure differences between these states are substantial. California imposes a top personal income tax rate of 13.3%, while Texas and Florida have no state income tax whatsoever. Though property taxes in California account for about 2.8% of personal income—slightly lower than Texas at 3.6% and close to Florida’s 2.6%—California’s tax burden in other areas is considerably heavier.
California’s unemployment insurance tax rate matches Texas at 6.2% but exceeds Florida’s 5.4%. The state’s sales tax is also higher at 7.2%, compared to 6.2% in Texas and 6.0% in Florida. Drivers face a particularly steep burden in California, paying 70.9 cents per gallon in gas taxes—more than triple Texas’ 20 cents and significantly higher than Florida’s 40.3 cents.
A 2025 analysis by Wallethub ranked California as having the fourth-highest overall tax burden in the nation, behind only Vermont, New York, and Hawaii. The Tax Foundation’s data shows that California collects substantially more in state and local taxes per capita than either Texas or Florida.
Agresti suggests Newsom may be relying on data from the Institute On Taxation & Economic Policy (ITEP), an organization whose methodology he criticizes as “fatally flawed” because “it does not account for all forms of income or all taxes.”
ITEP’s approach focuses on how tax burdens are distributed across income groups rather than overall tax levels. The organization argues that states like Texas and Florida appear “low tax” primarily because they lack personal income taxes, which benefits high earners while placing more burden on lower-income households through sales, excise, and property taxes.
Critics counter that this perspective only captures part of the picture and ignores California’s significantly higher overall tax climate, particularly for top earners, investors, and businesses.
Agresti also challenges Newsom’s claim that the exodus of residents from California due to high taxes is a “myth.” According to data from California’s own Secretary of State, every year of Newsom’s governorship has seen more people move from California to other states than vice versa. During his tenure, approximately 1.5 million more people have left California than moved in.
“Newsom is a master of twisting statistics to paint a picture that is the exact inverse of reality,” Agresti said. He explained that Newsom’s population growth figures rely heavily on international immigration rather than domestic migration patterns.
The governor has also promoted data showing California now has the world’s fourth-largest economy, surpassing Japan—a claim Agresti describes as “fiction.” He explains that Newsom’s comparison uses foreign currency exchange rates, which inflate the relative size of economies with high prices. When using more appropriate economic conversion methods, “Japan’s GDP is 56% larger than California’s,” according to Agresti.
Further complicating California’s economic picture, Agresti points to data showing the state has the nation’s highest poverty rate and electricity prices more than twice the national average.
“When you look at California as a whole, it is one of the highest-tax states in the nation, and also there’s a lot of fallout from Newsom’s policies that make it one of the most expensive places to live in the entire United States,” Agresti concluded.
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21 Comments
I’m curious to learn more about the factors driving these tax burden disparities between the states. Is it simply a matter of differing tax policies, or are there other economic and demographic considerations at play? Looks like an important debate on state tax competitiveness.
Interesting analysis of the tax burden differences between California, Texas, and Florida. It’ll be interesting to see how Newsom responds to these findings challenging his claims. Seems like a complex issue with valid arguments on both sides.
Fascinating to see the expert challenge the governor’s claims. State tax policy is a complex issue, and it’s crucial that we have objective data and analysis to inform the debate, rather than just political posturing.
This debate highlights the ongoing tension between progressive taxation and economic competitiveness. It will be interesting to see how it evolves and influences policy decisions in the affected states.
Governor Newsom’s claims seem overly simplistic. While progressive tax rates can benefit lower-income residents, the overall tax burden tells a more complex story. I’d like to see a deeper dive into the data.
As someone who has lived in both California and Texas, I can say the cost of living and tax burden differences are quite stark. It’ll be interesting to see if this analysis sways public opinion on the relative merits of the states’ fiscal policies.
This is an important debate, as state tax policies can significantly influence where businesses and individuals choose to locate. I hope the analysis by Just Facts provides a more objective assessment to inform the discussion.
I appreciate the expert analysis challenging the governor’s claims. It’s important to have balanced, fact-based discussions on state taxation, rather than partisan rhetoric. This debate could have significant implications for voters and policymakers.
As an energy and mining investor, I’m particularly interested in how state tax policies could influence the location decisions of companies in those sectors. This debate could have significant implications for industry.
As someone who has been following state tax policy debates, I find this analysis quite compelling. The data seems to present a different picture than the one painted by the California governor. I’m curious to see how this plays out moving forward.
This is a complex issue without easy answers. While the data may show Texas and Florida having lower overall tax burdens, the quality and availability of public services in those states is also an important factor to consider. It’s not just about the raw numbers.
This seems like a politically charged debate, but I appreciate the attempt to ground it in objective data analysis. Ultimately, state tax policies should be evaluated based on their broader economic impacts, not just headline numbers.
Interesting analysis. I’m curious to see how the tax burden data compares across different income levels and family compositions. It’s important to look at the full picture when evaluating tax policies.
As an investor in mining and energy companies, I’m concerned about how high taxes in California could impact business growth and job creation compared to lower-tax states. This debate highlights the importance of fiscal policies for economic development.
The comparison of aggregate tax burdens across states is useful, but I wonder if there are also differences in the types of taxes levied (e.g., income, sales, property) that could impact certain taxpayer groups differently.
As someone who has lived in both California and Texas, I can anecdotally attest to the higher cost of living and taxes in California. However, the expert analysis seems to provide a more rigorous comparison.
As someone living in California, I can attest to the high tax burden here. While the state does provide certain services, the cost of living is also extremely high. It’ll be interesting to see how this issue plays out politically and if it sways voters’ views on state tax policies.
It’s good to see the expert analysis challenging Newsom’s claims. Data and facts should drive these discussions, not just political rhetoric. Curious to see how this story develops and if it leads to any meaningful policy changes.
This is an important debate on state taxation that goes beyond partisan politics. Objective analysis of the data and fiscal realities in each state is crucial for informing sound economic policies that serve the broader public interest.
This is a timely and important discussion on state tax competitiveness. I’m glad to see the expert analysis providing a counterpoint to the governor’s assertions. It will be interesting to see how this unfolds and what implications it may have for policymaking.
I appreciate the attempt to provide a more objective analysis, but tax policy is complex. I’d encourage further research to account for factors like cost of living, government services, and the overall economic impacts.