What Would Your Texas Paycheck Look Like if IRS Taxes are Erased?

Out in the scorching sun of the Permian Basin near Midland-Odessa Texas, a hardworking veteran of the oilfield opens his pay envelope. He notices. In downtown Houston, a financial analyst for a Fortune 500 company logs on to her profile. She notices. A Waffle House waitress in Tyler opens her check too, she is noticeably appalled by what she sees.

What those Texans are noticing is just how much of their money goes to someone else, namely the federal government. Taxes are always a hot topic of discussion in Texas when the calendar flips into February and soon to be March.

We all know the tax deadline is looming on April 15th. We all have to file our federal returns by that date. Some will file an extension, some will just blow it off and let the chips fall where they may.

The current administration in Washington has made more than a few comments suggesting major tax reforms and an overhaul of the Internal Revenue Service. There has even been talk of "erasing the federal income tax," which would move the country back to the "good old days" of 1870 to 1913.

Have you ever wondered just how much different your paycheck would look if there were no deductions for federal taxes? What if you could actually take home all of the money that you worked hard for? How different do you think the numbers might be?

The website gobankingrates.com provides financial advice and information about banking, investing, and other personal finance topics. They took on the question of "How different would your Texas paycheck be without federal taxes". I was surprised by what they found.

The methodology GoBankingRates used included median household income figures for each state. They then estimated the federal taxes based on a single filer using a standard deduction. If you file differently, such as a married couple, married filing jointly, or married withhold at a single higher rate, your numbers might be a little different.

So, for the sake of discussion, here's what GoBankingRate deduced for a Texas worker not paying federal income tax.

Texas

That information is courtesy of GoBankingRates.com. You can see how a federal tax erasure would affect income in other states, right here.

Using my public school math skills I can deduce that the difference in dollars in the example noted above comes to $514 per paycheck. That would mean an additional $$1,028 per month. Over a year time that would mean a "raise" of $12,336.00.

That's the equivalent of almost 11 COVID stimulus checks or slightly more than the reported amount of the alleged "DOGE Dividend" would be if that came to fruition. It is an interesting economic conundrum to consider.

How do you value money in the hands of citizens versus the value of government services that private citizens don't have to fund? I guess that's a question we need to be thinking about so we can guide our leaders in the direction we want all of this to go.