California Governor Gavin Newsom has repeatedly asserted his state is more tax-friendly than Florida and Texas, sparking a debate over the true cost of living in each. His claims, made publicly and during appearances like the SXSW conference in Austin, center on the idea that California’s progressive tax system benefits its middle class.
However, a detailed analysis by James Agresti, President of Just Facts, challenges this narrative. Agresti’s research reveals a stark contrast in overall tax burdens, finding that California collects roughly $10,000 per person annually in taxes, double the amount collected in Texas and Florida, which average around $5,000.
The discrepancy isn’t simply about population size. Even when considered as a percentage of each state’s economy, California taxes approximately 14%, compared to 9% in both Texas and Florida. This suggests a fundamentally different approach to revenue generation.
While California boasts a top personal income tax rate of 13.3% – while Texas and Florida levy no state income tax – the full picture is complex. Property taxes in California are comparable to Texas and slightly lower than Florida when viewed as a percentage of personal income.
Digging deeper, California’s unemployment insurance tax mirrors Texas, but exceeds Florida’s. Sales taxes are also higher in California at 7.2% versus 6.2% in Texas and 6.0% in Florida. The most significant difference lies in gas taxes, where California drivers pay a staggering 70.9 cents per gallon, dwarfing the 20 cents in Texas and 40.3 cents in Florida.
Independent rankings corroborate this assessment. A 2025 Wallethub analysis places California as the 4th highest tax burden state, trailing only Vermont, New York, and Hawaii. Data from the Tax Foundation further confirms that California collects significantly more in per capita state and local taxes than either Texas or Florida.
At the heart of the disagreement lies the data sources used. Agresti contends that Newsom likely relies on analyses from the Institute On Taxation & Economic Policy (ITEP), which he deems “fatally flawed” for not accounting for all forms of income and taxes. ITEP focuses on tax distribution across income groups, arguing that the lack of a broad-based income tax in Texas and Florida disproportionately benefits high earners.
Critics argue this framing is incomplete. While ITEP’s approach highlights income inequality, it doesn’t reflect the overall tax climate, where California remains demonstrably more burdensome for high earners, investors, and businesses. Agresti points out that ITEP’s methodology has even contributed to the widespread, but inaccurate, belief that middle-income Americans pay a higher federal tax rate than the wealthy.
Agresti further challenges Newsom’s claims regarding population shifts, stating that the governor selectively uses data. While total population growth includes international immigration, a net outflow of residents *from* California to other states has occurred throughout Newsom’s governorship – over 1.5 million more people have left than arrived.
Even Newsom’s boast of California surpassing Japan as the world’s fourth-largest economy is disputed. Agresti argues the comparison relies on a misleading conversion of currency using exchange rates, artificially inflating California’s economic size. A proper accounting reveals Japan’s GDP is actually 56% larger.
Beyond taxes and economic figures, Agresti highlights other concerning indicators: California has the highest poverty rate in the nation and electricity prices more than double the national average. These factors contribute to a high cost of living, painting a picture of a state facing significant challenges despite its economic prominence.
Ultimately, the debate underscores the complexities of comparing tax burdens and the importance of scrutinizing the data used to support political claims. A comprehensive assessment reveals a reality far removed from the governor’s assertions of California’s tax-friendly status.
