Full Breakdown
Newsom's Tax Claims Spark Controversy at SXSW
3/18/2026, 4:05:07 PM
California vs. Texas and Florida: The Tax Debate
During the South by Southwest (SXSW) conference in Austin, Texas, California Governor Gavin Newsom asserted that Florida and Texas are the "real high-tax states," arguing that lower- and middle-income residents in those states face a heavier tax burden than their counterparts in California. Newsom emphasized California's progressive tax structure, stating, "We have the most progressive tax rates in America. Texas, the most regressive." He claimed that middle-class Texans pay more in taxes than their California counterparts, framing the issue as a moral dilemma about who benefits from tax policies.
Criticism of Newsom's Claims
Newsom's remarks drew significant backlash, particularly from Florida Governor Ron DeSantis, who labeled the claims as "lies" and highlighted that California has the highest top marginal income tax rate in the nation at 13.3%. Critics argue that while Newsom's claims focus on tax burdens by income group, they overlook the overall tax climate, where California remains more burdensome for high earners and businesses. According to the Tax Foundation, California collects significantly more in state and local taxes per capita compared to Texas and Florida, which have no state income tax.
Data and Statistics
The Institute on Taxation and Economic Policy (ITEP) ranks Florida as the most regressive state in terms of tax inequality, with Texas following closely behind. This analysis suggests that states like Texas and Florida appear "low tax" primarily because they do not impose a broad-based personal income tax, which disproportionately benefits high earners. Conversely, California's progressive income tax system places a heavier burden on top earners, helping to offset regressive taxes that affect lower-income households.
Conflicting Reports and Gaps
While ITEP's analysis indicates that the bottom 20% of earners pay slightly higher overall tax rates in Florida and Texas compared to California, critics argue that this perspective does not account for California's overall high cost of living. The Tax Foundation ranks California 48th in overall tax competitiveness, while WalletHub places it 4th in overall tax burden. Texas and Florida rank significantly lower, at 40th and 45th, respectively.
Official Statements & Responses
In response to Newsom's claims, DeSantis remarked, "There are lies, damned lies and statistics," emphasizing that even supporters of California governance acknowledge its high tax status. Jared Walczak from the Tax Foundation stated that Newsom's assertions "do not stand up to scrutiny," noting that migration patterns indicate a preference for states with lower income taxes.
What's Next
As the debate continues, Newsom's comments at SXSW have fueled speculation about his potential presidential ambitions for 2028, contingent on Democratic gains in the upcoming midterms. His remarks on taxation and governance are likely to remain a focal point in the ongoing discourse between red and blue states.
