The economy of Texas is one of the largest and fastest growing economies in the United States ^ b. English is the de facto language of American government and the sole language spoken at home by 80% of Americans age five and older. Spanish is the second most commonly spoken language. In 2006, Texas was home to six of the top 50 companies on the Fortune 500 The Fortune 500 is an annual list compiled and published by Fortune magazine that ranks the top 500 U.S. closely held and public corporations as ranked by their gross revenue after adjustments made by Fortune to exclude the impact of excise taxes companies collect. The list includes publicly and privately-held companies for which revenues are list and 46 overall, more than any other state. ^[1] Texas has an economy that was the second This article presents a list of U.S. states sorted by their gross state product . GSP is the state counterpart of the national gross domestic product (GDP), the most comprehensive measure of national economic activity. The United States Bureau of Economic Analysis (BEA) derives GSP for a state as the sum of the GSP originating in all the largest in the nation and the 15th This is a comparison between U.S. states and countries by Gross Domestic Product . Many of the states of the United States have large Gross Domestic Product (called gross state product) which would rank highly on a list of countries world GDP. All data is for the year 2005 (except the World Bank countries list, which is the 2008 data) largest in the world based on GDP (nominal) figures. As the largest exporter of goods in the United States, Texas currently grosses more than $100 billion a year in trade with other nations.

In 2008, Texas had a gross state product The gross domestic product or gross domestic income (GDI) is a measure of a country's overall economic output. It is the market value of all final goods and services made within the borders of a country in a year. It is often positively correlated with the standard of living, though its use as a stand-in for measuring the standard of living has of $1.224 trillion,^[2][3] the second This article presents a list of U.S. states sorted by their gross state product . GSP is the state counterpart of the national gross domestic product (GDP), the most comprehensive measure of national economic activity. The United States Bureau of Economic Analysis (BEA) derives GSP for a state as the sum of the GSP originating in all the highest in the U.S.^[2][3] The Gross state product Gross state product is a measurement of the economic output of a state or province. It is the sum of all value added by industries within the state and serves as a counterpart to the gross domestic product or GDP per capita as of 2005 was $42,975.

Texas had the second largest workforce in the United States, with almost 11 million civilian workers. The lack of personal income tax State income tax is an income tax in the United States that is levied by each individual state. Seven states choose to impose no income tax. These states are Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. Additionally, New Hampshire and Tennessee limit their state income taxes to only dividends and interest income. These as well as the largely undervalued real estate throughout Texas has led to significant growth in population. Since 2003, the legislature in conjunction with the Governor's office has made economic development a top priority.

Much economic activity in Texas is regional. For example, the timber industry Logging is the process in which certain trees are cut down by a lumberjack for forest management and timber is important in East Texas According to the Handbook of Texas, the East Texas area "may be separated from the rest of Texas roughly by a line extending from the Red River in north central Lamar County southwestward to east central Limestone County and then southeastward to Galveston Bay", though some separate the Gulf Coast area into a separate region's economy but a non-factor elsewhere. Houston Houston is the fourth-largest city in the United States of America and the largest city in the state of Texas. As of the 2009 U.S. Census estimate, the city had a population of 2.3 million within an area of 579 square miles (1,500 km2). Houston is the seat of Harris County and the economic center of the Houston–Sugar Land–Baytown metropolitan, the state's largest urban economic enclave stands at the center of the petrochemical Petrochemicals are chemical products derived from petroleum. Some chemical compounds made from petroleum are also obtained from other fossil fuels such as coal or natural gas, or renewable sources such as corn or sugar cane, biomedical Biomedical research , in general simply known as medical research, is the basic research, applied research, or translational research conducted to aid and support the body of knowledge in the field of medicine. Medical research can be divided into two general categories: the evaluation of new treatments for both safety and efficacy in what are research trades, shipping, and aerospace (particularly NASA The National Aeronautics and Space Administration is an Executive Branch agency of the United States government, responsible for the nation's civilian space program and aeronautics and aerospace research. Since February 2006 NASA's self-described mission statement is to "pioneer the future in space exploration, scientific discovery and). Dallas/Fort Worth houses the state's predominant defense The defense industry, also called the military industry, comprises government and commercial industry involved in research, development, production, and service of military equipment and facilities. It includes: manufacturing interests and the expansive information technology Information technology is "the study, design, development, implementation, support or management of computer-based information systems, particularly software applications and computer hardware", according to the Information Technology Association of America (ITAA). IT deals with the use of electronic computers and computer software to labor market. West Texas and the panhandle is dominated by ranching and the petroleum industry.^{[citation needed]} Austin's economy is dominated by the State Government, Educational Institutions, and the booming IT Industry.

Texas's growth can be attributed to the availability of jobs, the low cost of housing, the lack of a personal state income tax State income tax is an income tax in the United States that is levied by each individual state. Seven states choose to impose no income tax. These states are Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. Additionally, New Hampshire and Tennessee limit their state income taxes to only dividends and interest income. These, the quality of higher education, low taxation and limited regulation of business A business is a legally recognized organization designed to provide goods or services, or both, to consumers, businesses and governmental entities. Businesses are predominant in capitalist economies. Most businesses are privately owned. A business is typically formed to earn profit that will increase the wealth of its owners and grow the business, a central geographic location, a limited government The Legislature of the State of Texas is the state legislature of the U.S. state of Texas. The legislature is a bicameral body composed of a 31-member Senate and a 150-member House of Representatives. The Legislature meets at the Capitol in Austin. The Legislature is arguably considered the most powerful arm of the Texas government not only, favorable weather Texas's climate varies widely, from arid in the west to humid in the east. Due to its large size, Texas is home to several different climates. There are several distinct regions within the state which have varying climates: Northern Plains, Big Bend Country, Texas Hill Country, Piney Woods, and South Texas. Generally speaking, the eastern half of, and plentiful supplies of oil and natural gas. There are currently 35 billionaires residing in Texas today.

Texas has the highest number of Fortune 500 The Fortune 500 is an annual list compiled and published by Fortune magazine that ranks the top 500 U.S. closely held and public corporations as ranked by their gross revenue after adjustments made by Fortune to exclude the impact of excise taxes companies collect. The list includes publicly and privately-held companies for which revenues are company headquarters in the United States, fifty-eight.^[4] This has been attributed to both the growth in population in Texas and the rise of oil prices in 2005.

History

Historically four major business enterprises shaped the Texas economy prior to World War II Albania · Australia · Austria · Azerbaijan · Belarus · Belgium · Brazil · Bulgaria · Burma · Cambodia · Canada · Ceylon (Sri Lanka) · Channel Islands · China · Czechoslovakia · Denmark · Dutch East Indies · Egypt · Estonia · Finland · France · Germany · Gibraltar · Greece · Greenland · Hong Kong · Hungary · Iceland ·: cattle and bison, cotton, timber, and oil.^[5] The first enterprise to enjoy major success in Texas was cattle and bison. In the early days of Anglo-American settlement furs and hides were the major products derived from cattle. Beef was not particularly popular in the United States. However soon Texas entrepreneurs pioneered the beef industry and demand steadily increased. The cattle industry enjoyed its greatest financial success in the later 1870s and 1880s.

Cotton production, which had been known in Texas since Spanish times, gradually increased throughout the 19th century. By the early 20th century Texas had become the leading cotton producer in the nation. By the 1920s the cotton industry was past its peak as government regulation and foreign competition took their toll.^[6]

The forests of Texas have been an important resource since its earliest days and have played an important role the state's history. The vast woodlands of the region, home to many varieties of wildlife when Europeans first arrived, provided major economic opportunities for early settlers. They today continue to play an important role economically and environmentally in the state.

The densest forest lands lie in the eastern part of the state. In particular the Big Thicket The Big Thicket is the name of a heavily forested area in Southeast Texas. While no exact boundaries exist, the area occupies much of Hardin County, Liberty, Tyler, San Jacinto, and Polk Counties and is roughly bounded by the San Jacinto River, Neches River, and Pine Island Bayou. To the north, it blends into the larger Piney Woods terrestrial region, just north of Houston Houston is the fourth-largest city in the United States of America and the largest city in the state of Texas. As of the 2009 U.S. Census estimate, the city had a population of 2.3 million within an area of 579 square miles (1,500 km2). Houston is the seat of Harris County and the economic center of the Houston–Sugar Land–Baytown metropolitan and Beaumont Beaumont is a city in and county seat of Jefferson County, Texas, United States, within the Beaumont–Port Arthur Metropolitan Statistical Area. The city's population was 113,866 at the 2000 census. With Port Arthur and Orange, it forms the Golden Triangle, a major industrial area on the Gulf Coast, has historically been home to the most dense woodlands. The Big Thicket was mostly uninhabited until heavy settlement from the U.S. began in the mid 1800s, and was even used as a refuge by runaway slaves and other fugitives. The Rio Grande The Rio Grande is a river that forms part of the Mexico – United States border. Its length varies as its course changes. According to the International Boundary and Water Commission its total length was 1,896 miles (3,051 km) in the late 1980s. Depending on how it is measured, the Rio Grande is the fourth or fifth longest river system in the valley in South Texas South Texas is a region of the U.S. state of Texas that lies roughly south of, or beginning at, San Antonio. The southern and western boundary is the Rio Grande River, and to the east it is the Gulf of Mexico. The population of this region is about 3.7 million. The southern portion of this region is often referred to as the Rio Grande Valley. The was home to a large palm tree forest when Spaniards first arrived, though today very little of it remains.

The development of railroads in the eastern part of the state during the mid 1800s led to a boom in lumber production in the 1880s. This era of financial success lasted approximately 50 years finally coming to an end as Texas' forests were decimated and the Great Depression dropped prices.^[7]

In 1901 the Gladys City Oil, Gas, and Manufacturing Company struck oil on Spindletop Hill Spindletop is a salt dome oil field located in south Beaumont, Texas in the United States. The Spindletop dome was derived from the Louann Salt evaporite layer of Jurassic age. On January 10, 1901, a well at Spindletop struck oil . The new oil field soon produced more than 100,000 barrels of oil per day. Gulf Oil and Texaco, now part of Chevron near Beaumont Beaumont is a city in and county seat of Jefferson County, Texas, United States, within the Beaumont–Port Arthur Metropolitan Statistical Area. The city's population was 113,866 at the 2000 census. With Port Arthur and Orange, it forms the Golden Triangle, a major industrial area on the Gulf Coast. Though petroleum production was not new Texas, this strike was by far the largest the world had ever seen. The find led to widespread exploration throughout Texas and neighboring states. By 1940 Texas was firmly established as the leading oil producer in the U.S.^[8]

Texas remained largely rural until World War II Albania · Australia · Austria · Azerbaijan · Belarus · Belgium · Brazil · Bulgaria · Burma · Cambodia · Canada · Ceylon (Sri Lanka) · Channel Islands · China · Czechoslovakia · Denmark · Dutch East Indies · Egypt · Estonia · Finland · France · Germany · Gibraltar · Greece · Greenland · Hong Kong · Hungary · Iceland · though the success of the petroleum industry rapidly expanded the economy with heavy industry of many types taking root. The second world war created tremendous demand for petroleum and a variety of products that Texas was in a unique position to provide. By the end of the war Texas was one of the leading industrial states and the population had become predominantly urban. Additionally the economy has diversified sufficiently that, though petroleum was the largest sector, the business community in the state had truly diversified.

The Texas economy today relies largely on information technology, oil and natural gas, aerospace, biomedical research, fuel processing, electric power, agriculture Agriculture is the production of food and goods through farming. Agriculture was the key development that led to the rise of human civilization, with the husbandry of domesticated animals and plants creating food surpluses that enabled the development of more densely populated and stratified societies. The study of agriculture is known as, and manufacturing.

Exports

In 2008, for the seventh year in a row, Texas led the United States in export revenues. Texas exports for 2008 totaled $192.2 billion.^[9] In 2002, the Port of Houston The Port of Houston is the port of Houston, Texas, the fourth-largest city in the United States. The Port is a 25-mile-long complex of diversified public and private facilities located a few hours' sailing time from the Gulf of Mexico. It is the busiest port in the United States in terms of foreign tonnage, second-busiest in the United States in was 6th among the top sea ports in the world in terms of total cargo volume;^[10] Air Cargo World rated Dallas-Fort Worth International Airport Dallas/Fort Worth International Airport is located between the cities of Dallas and Fort Worth, and is the busiest airport in the U.S. state of Texas as "the best air cargo airport in the world".^[11] The ship channel at the Port of Houston The Port of Houston is the port of Houston, Texas, the fourth-largest city in the United States. The Port is a 25-mile-long complex of diversified public and private facilities located a few hours' sailing time from the Gulf of Mexico. It is the busiest port in the United States in terms of foreign tonnage, second-busiest in the United States in—the largest in the U.S. in international commerce and the sixth-largest port in the world.^[12]

Taxes

According to the Tax Foundation The Tax Foundation is a Washington, D.C.-based think tank founded in 1937 that collects data and publishes research studies on tax policies at the federal and state levels. The group is most famous for its annual calculation of Tax Freedom Day for the United States, which it has produced since the early 1970s, Texan's state and local tax burdens are among the lowest in the nation, 7th lowest nationally, with state and local taxes costing $3,580 per capita, or 8.7% of resident incomes.^[13] Texas is only one of 7 states to not have a state income tax State income tax is an income tax in the United States that is levied by each individual state. Seven states choose to impose no income tax. These states are Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. Additionally, New Hampshire and Tennessee limit their state income taxes to only dividends and interest income. These.^[13][14] The state sales tax A sales tax is a consumption tax charged at the point of purchase for certain goods and services. The tax amount is usually calculated by applying a percentage rate to the taxable price of a sale. A portion of the sale may be exempt from the calculation of tax, because sales tax laws usually contain a list of exemptions. Laws governing the tax may rate, 8.25%, is above the national medium, with localities adding more to this percentage.^[13] Texas does have a "back to school" sales tax holiday A tax holiday is a temporary reduction or elimination of a tax. Governments usually create tax holidays as incentives for business investment. The taxes that are most commonly reduced by national and local governments are sales taxes. In developing countries, governments sometimes reduce or eliminate corporate taxes for the purpose of attracting once a year (generally around the first weekend in August) on clothing and footwear under $100.^[15]

As for Texas's business tax climate, the state ranks 8th in the nation.^[13] Property taxes Property tax, or millage tax, is an ad valorem tax that an owner is required to pay on the value of the property being taxed. Property tax can be defined as "generally, tax imposed by municipalities upon owners of real property within their jurisdiction based on the value of such property." There are three species or types of property: are exclusively collected at the local level in the state, and are generally at rates above the national average.^[13] As a whole, Texas is a "tax donor state" with Texans receiving back approximately $0.94 per every dollar of federal income taxes The federal government of the United States imposes a progressive tax on the taxable income of individuals, partnerships, companies, corporations, trusts, decedents' estates, and certain bankruptcy estates. Some state and municipal governments also impose income taxes. The first Federal income tax was imposed during the Civil War, then again in collected in 2005.^[13]

Tax burden

Texas is one of the nine states of the United States with no personal state income tax State income tax is an income tax in the United States that is levied by each individual state. Seven states choose to impose no income tax. These states are Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. Additionally, New Hampshire and Tennessee limit their state income taxes to only dividends and interest income. These. In addition, Texas does not allow any lower level of government (counties, cities, etc.) to impose an income tax. This means that, for the residents of Texas, the maximum rate of income taxation is the top rate set by the US Government. Businesses (except for sole proprietorships and partnerships) are subject to a gross margins tax.^{[citation needed]}

The state sales tax A sales tax is a consumption tax charged at the point of purchase for certain goods and services. The tax amount is usually calculated by applying a percentage rate to the taxable price of a sale. A portion of the sale may be exempt from the calculation of tax, because sales tax laws usually contain a list of exemptions. Laws governing the tax may is set at 8.25 percent.^[16] Cities are allowed to impose an additional 1% tax, and additional taxes not to exceed 1% may be approved by voters for any combination of county sales tax, transportation districts, economic development, and/or crime prevention. The average sales tax in Texas amounts to 8.25 percent. The state determines the items subject to sales tax, which all other entities must follow. Motor vehicle sales are subject only to the 6.25% state sales tax. Food (except for prepared food) and non-prescription medicines are among the major items exempt from sales tax.^{[citation needed]}

Property taxes Property tax, or millage tax, is an ad valorem tax that an owner is required to pay on the value of the property being taxed. Property tax can be defined as "generally, tax imposed by municipalities upon owners of real property within their jurisdiction based on the value of such property." There are three species or types of property:, however, are among the highest in the nation, and constitute the bulk of revenue for many local governmental entities (but not the state as the Texas Constitution The Constitution of the State of Texas is the document that describes the structure and function of the government of the U.S. State of Texas specifically prohibits a state property tax). For real property, counties, cities, and school districts (along with other special districts, such as for a community college or public hospital) will impose taxes. The property is assessed uniformily throughout the county via the county "appraisal district", and taxes are assessed based on 100% of the property's determined value (which can be somewhat tricky, as Texas does not require the sales price to be disclosed at closing). Larger personal property Personal property, roughly speaking, is private property that is moveable, as opposed to real property or real estate. In the common law systems personal property may also be called chattels or personalty. In the civil law systems personal property is often called movable property or movables - any property that can be moved from one location to items (such as cars, boats, and airplanes) can be subject to tax as well depending on whether a local government has chosen to do so, but is far less common.^{[citation needed]}

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