Texas tax revenue has hit a record high because of economic growth and high inflation rates. In the fiscal year through August, the country gained $77.2 billion in taxes. This is an increase of 25.6% from the previous year.
The sales tax revenue also increased by 19.3% in the 2021 fiscal year, as it is now totaling about $43 million.
The current tax revenue increase is noteworthy as the tax revenue increase has only hit double digits five times since 1988. Even back then the increase had only been around 10-13%.
Texas does not have a state income tax or corporate income tax, this is why the sales tax is so important for their revenue. During times of high inflation the sales tax revenue increases as the cost of everyday items, gasoline and clothing also increases.
The oil and gas mining sector increased by around 80% since last year, which was a big driving force behind the high revenues.
Inflation has also hit an old-time high, with new records being set every month. The consumer price index is currently at 8.5% which is the highest it has been in four decades.
State and local government tax revenue from personal income, corporate income, sales, and property taxes have also increased by 14.3% nominally. When adjusted for inflation that rate is around 7% in the first quarter of 2022 in comparison to the first quarter of 2021.
However, reports have also warned that revenue growth will be limited in the coming years as tax cuts will be fully implemented in 2022 and 2023.