New Mexico vs Texas: Which State Keeps More Money in Your Pocket?
VSDetailed comparison of tax rates, cost of living, and quality of life
📌 4.90% in New Mexico versus no income tax in Texas translates to about $4,900 per year at $100,000. Texas balances this through no income tax. Recent data shows artists migrating to Texas, corporate relocators to New Mexico based on broader considerations.
When you're weighing New Mexico against Texas, taxes make a real difference in your paycheck. New Mexico tops out at 4.90%, while Texas reaches no income tax. If you're pulling in $100,000, that spread works out to roughly $4,900 per year—though the tax number only tells part of the story.
🔑 Key Differences
- **State income tax**: New Mexico at 4.90% vs Texas at no income tax
- **Annual savings** (on $100,000): Texas saves you ~$4,900
- **Tax system**: Both use progressive brackets
- **Deductions**: Standard federal deductions apply, state variations exist
- **Local taxes**: Check your specific county/city as rates vary within states
Tax Comparison
| Tax Type | New Mexico | Texas |
|---|---|---|
| State Income Tax | 1.7% - 4.9% | No Income Tax Winner |
| 💰 On $40,000 Salary |
State Tax: $1,320
Take Home: $38,680
|
State Tax: $0
Take Home: $40,000
+$1,320
|
| 💰 On $60,000 Salary |
State Tax: $1,980
Take Home: $58,020
|
State Tax: $0
Take Home: $60,000
+$1,980
|
| 💰 On $100,000 Salary |
State Tax: $3,300
Take Home: $96,700
|
State Tax: $0
Take Home: $100,000
+$3,300
|
| Cost of Living | New Mexico ranks among America's most affordable states. Albuquerque offers genuine metropolitan amenities with housing costs dramatically below national averages - quality homes often sell for $200,000-300,000. Santa Fe commands premium prices but remains more affordable than comparable tourist destinations. Las Cruces, Farmington, and other cities provide exceptional value. Property taxes stay low statewide. General expenses run well below national averages. The extreme affordability means even modest incomes support comfortable lifestyles. | Texas costs vary dramatically by region. Austin housing has exploded - median prices often exceed $500,000 in desirable areas. Parts of Dallas expensive. Houston offers better value given size. San Antonio, Fort Worth, and smaller cities maintain genuine affordability. Property taxes run high - often $4,000-8,000 annually even for modest homes. Sales tax reaches 8.25%. The no-income-tax advantage creates meaningful benefit, though property taxes substantial. |
Pros & Cons
New Mexico
✓ Advantages
- Low cost of living
- Beautiful landscapes
- Unique culture
- Research institutions
⚠ Considerations
- Lower average salaries
- Limited job market
- High poverty rate in some areas
- Education challenges
Texas
✓ Advantages
- Zero state income tax keeps more money in your paycheck
- Diverse economy with opportunities in energy, tech, healthcare, and manufacturing
- Housing costs substantially lower than California or Northeast states
- No state estate or inheritance tax
- Business-friendly environment attracts employers
⚠ Considerations
- Property taxes average 1.6% of home value
- Sales tax ranges from 6.25% to 8.25%
- Summer heat can be intense
- Public transportation limited outside major cities
- Health insurance costs often higher
Bottom Line
Texas's no income tax versus New Mexico's 4.90% translates to roughly $4,900 advantage at $100,000. New Mexico stays relevant by offering no income tax. The decision often hinges on whether {factor} or direct tax savings carries more weight in your situation.📢 Share This Comparison
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