High property taxes are a myth. Slightly higher, yes. However, you can choose your tax rate by choosing a subdivision right next door. Subdivs w/ larger, more expensive homes tend to have lower tax rates. 3% at $100k home is common, 2.5% at $500k home. Depends on community amenities. About half of the collected tax go directly to your local school district, and small slices to various community services, fire, police, water, etc. The state is mostly funded through sales tax (which is around 7 to 8%).
Taxes are generally from 2% to 3% of property tax appraisal (which is usually lower than the real, "market" value; when I bought my house, it was appraised for 40% less than what I paid for it). For a $500k house (large home, probably 4,000 to 5,000 sq ft, pool), maybe $1k/mo. For a $200k home (which could still be 3k sq ft), maybe $500/mo.
Any way you cut it, even $12k/year in property tax is certainly less to possibly a LOT less than 13% income tax in CA, and you can buy smaller or larger, buy elsewhere or relocate, or negotiate it away by protesting with comps data. Also, it's a tax only when you spend the money, not when you make it (encouraging investment).
Rentals have no direct property tax, of course. Compare the actual prices. Before you say "oh, that's where it is!" compare the rental prices for a home in San Jose (or SF) to the same home in an Austin suburb.
That was kinda my point. :) Compare the rents. Yes, of course the homeowner has to cover costs, but apples to apples the rents in Austin are 50% or even less vs San Jose.
