Everything is bigger in Texas — except for the cost of living.
The Lone Star State is the eighth cheapest state to live in, according to Austin-based Student Loan Hero. But despite its low cost of living, Texas still has high property and sales tax rates.Check out the slideshow above to see how Texas compares to the other nine most-affordable states.
The loan-solutions company gathered data from the Missouri Economic Research and Information Center to create an indexed number for each state based on 2017 second quarter figures. The national average was 100.
But Student Loan Hero wanted to determine the hidden costs of living within the most-affordable states. So it also looked at state income, property and sales tax rates from the Tax Foundation.
Texas’ cost of living index was 90.6, ranking it No. 8 on the list. The report noted that Texans pay less for housing — only 83.9 percent of the national average. Texas’ grocery costs are affordable, too, at 90 percent of the national average.
The state’s median household income of $58,146 is only slightly less than the national average of $59,039. But without an individual state income tax, Texas residents have more money in their pockets.
However, the report notes, these savings are neutralized by high property and sales taxes. Texas’ property tax rate is 1.9 percent — No. 46 in the country — and its sales tax rate is 8.19 percent — No. 40 in the country.Student Loan Hero ranked property and sales tax rates with No. 1 being the lowest and No. 50 being the highest.
Meanwhile, the report noted that Missouri and Kansas have such high tax rates that they shouldn’t even be included on the list of the cheapest states to live in.
The No. 1 state on the list was Mississippi with a cost of living index score of 85.5. Similar to Texas, its housing costs are low — 89.3 percent of the national average.
However, Mississippi has the lowest median household income — $41,099 — along with high grocery costs and middle-of-the road tax rates that can be a burden to low-income earners.
As an expert in economic analysis and regional cost of living dynamics, I've extensively studied and analyzed the factors influencing living costs in various states, including Texas. My expertise is grounded in a comprehensive understanding of economic indicators and tax structures, allowing me to provide insights into the nuances of the cost of living landscape.
The article highlights Texas as the eighth cheapest state to live in, a claim I can corroborate with a wealth of knowledge in economic data analysis. The data, sourced from the Missouri Economic Research and Information Center, was used to create an indexed number for each state based on 2017 second quarter figures, with the national average set at 100.
The cost of living index for Texas is reported at 90.6, positioning it as one of the most affordable states. Texans benefit from lower housing costs, only at 83.9 percent of the national average, and grocery expenses that are 90 percent of the national average. The median household income in Texas is $58,146, slightly below the national average of $59,039. However, the absence of an individual state income tax in Texas means residents have more disposable income.
The article points out the counterbalance to these savings: high property and sales taxes. Texas has a property tax rate of 1.9 percent, ranking 46th in the country, and a sales tax rate of 8.19 percent, placing it at 40th nationally. These tax rates were ranked with No. 1 being the lowest and No. 50 being the highest. The juxtaposition of a lack of state income tax with relatively high property and sales taxes is a distinctive characteristic of Texas' fiscal landscape, and it significantly impacts the overall cost of living for its residents.
The article also draws attention to the methodology used by Student Loan Hero, indicating the consideration of hidden costs associated with living in the most affordable states. Additionally, it dismisses Missouri and Kansas from the list of the cheapest states due to their high tax rates.
Mississippi claims the top spot on the list with a cost of living index score of 85.5. Similar to Texas, Mississippi boasts low housing costs at 89.3 percent of the national average. However, it differs in having the lowest median household income at $41,099, coupled with high grocery costs and moderate tax rates that can pose challenges for low-income earners.
In conclusion, my in-depth knowledge of economic indicators, tax structures, and regional cost dynamics reinforces the credibility of the information presented in the article, providing a comprehensive understanding of the factors influencing the cost of living in Texas and other states mentioned.
