California costs considerably more than Texas for most households. A single renter earning $85,000 keeps $13,434 a year in Los Angeles after 2026 taxes, rent and everyday costs, and $30,363 in Dallas — $16,929 more. To end up in the same place as $85,000 in Los Angeles, a Dallas job needs to pay only $61,629. Rent explains most of the gap and California’s income and disability taxes most of the rest.
Two gaps that add up: prices and taxes
Prices. BEA’s Regional Price Parities for 2024 put the states at 110.7 (California) and 97.1 (Texas), where US = 100. By metro:
| Metro | BEA price level | 1-BR Fair Market Rent | 2-BR Fair Market Rent |
|---|---|---|---|
| San Francisco, CA | 115.6 | $3,003 | $3,697 |
| Los Angeles, CA | 113.6 | $2,402 | $2,964 |
| Sacramento, CA | 106.7 | $1,793 | $2,201 |
| Fresno, CA | 102.2 | $1,363 | $1,685 |
| Dallas, TX | 103.1 | $1,536 | $1,807 |
| Houston, TX | 98.6 | $1,261 | $1,497 |
| Austin, TX | 98.1 | $1,530 | $1,817 |
| San Antonio, TX | 94.7 | $1,196 | $1,441 |
Sources: BEA Regional Price Parities, 2024; HUD Fiscal Year 2027 Fair Market Rents (40th-percentile gross rent, utilities included).
Taxes. California taxes wages at rates from 1% to 12.3%, plus 1% on taxable income over $1 million, and collects state disability insurance from paychecks. Texas does neither. Federal tax is identical in both.
Los Angeles vs Dallas at $85,000
Single adult, renting a one-bedroom at Fair Market Rent, one car at 12,000 miles a year, USDA Moderate-Cost food plan (August 2026), $500 a month each of other goods and services at US prices (an adjustable estimate scaled by local prices):
| Annual line | Los Angeles, CA | Dallas, TX |
|---|---|---|
| Federal income tax | $9,870 | $9,870 |
| Social Security + Medicare | $6,503 | $6,503 |
| State income tax | $3,516 | $0 |
| State disability insurance | $1,105 | $0 |
| Total taxes | $20,993 | $16,373 |
| Rent, 1-bedroom Fair Market Rent | $28,824 ($2,402/mo) | $18,432 ($1,536/mo) |
| Food | $5,636 | $5,436 |
| Gasoline | $2,989 | $1,860 |
| Other goods and services (estimate) | $12,659 | $12,151 |
| State sales tax | $464 | $386 |
| Left over | $13,434 | $30,363 |
Sources: HUD FY2027 Fair Market Rents (91 FR 56156); BEA RPP 2024; EIA weekly gasoline prices; 2026 taxes from the MoveMath engine.
Rent accounts for $10,392 of the $16,929 difference and taxes for $4,620. Gasoline adds $1,129, because California’s weekly average price is well above the Texas average. Run it yourself in the cost of living calculator.
A price-index shortcut misses most of this. Scaling $85,000 by the two metros’ price levels (103.1 ÷ 113.6) gives $77,159 in Dallas, not $61,629.
San Francisco vs Austin and Houston
At the expensive end of California the gap widens. A single renter on $100,000 in San Francisco keeps $14,858 a year. To match that, the calculator gives $61,737 in Austin and $58,670 in Houston. San Francisco’s two-bedroom Fair Market Rent is $2,200 a month above Houston’s.
The Texas property-tax offset
Texas has no income tax but higher property tax rates. MoveMath’s effective rate is the Census ACS 2020–2024 median real estate taxes paid divided by the median home value:
| Metro | Median home value | Median taxes | Effective rate |
|---|---|---|---|
| Los Angeles, CA | $871,300 | $5,854 | 0.67% |
| San Francisco, CA | $1,140,700 | $8,522 | 0.75% |
| Dallas, TX | $359,500 | $5,737 | 1.60% |
| Austin, TX | $465,000 | $7,140 | 1.54% |
| Houston, TX | $298,000 | $4,810 | 1.61% |
Across the metro-area counties in MoveMath’s data, the median effective rate is 1.35% in Texas and 0.70% in California. Because California homes cost far more, the median bills are close: $5,854 in Los Angeles and $5,737 in Dallas.
California’s rates are low partly because of Proposition 13, which limits the general property tax rate to 1% of assessed value plus voter-approved debt and caps yearly increases in assessed value at 2% until a sale or new construction (California State Board of Equalization). Long-time owners therefore pay on values well below market; a new buyer is assessed at the purchase price. Price a purchase by county with the cost of owning a home calculator.
The verdict
For renters, California costs more than Texas on every official measure used here: price levels, Fair Market Rents and income tax. For the $85,000 single renter it is $16,929 a year between Los Angeles and Dallas. For owners, Texas’s higher property tax rates narrow the gap but do not erase California’s higher home prices.
The Los Angeles to Dallas and Los Angeles to Austin moving pages show the same comparison for a single earner on $70,000 and a family of four on $120,000.