The Techie Codeth, Then the Taxman Taketh

• While tech households represented only 4.3 percent of owner-occupied U.S. homes in 2014, they paid 6.4 percent of all owner-occupied property taxes (an estimated $13.6 billion).
• The largest disparity between tech-paid property taxes and non-tech taxes was in the San Jose metro, at the heart of tech-heavy Silicon Valley.
• Tech workers are also more likely to say their home is worth more than other homes.

Tech workers nationwide that own a home pay more in annual property taxes than non-tech workers.

On average, owner-occupied U.S. households that are home to at least one tech worker paid $4,214 in annual property taxes in 2014 (the latest year for which data is available). In the same year, households without a tech worker paid an average of $2,885 annually. Put another way: While tech households represented only 4.3 percent of owner-occupied U.S. homes in 2014, they paid 6.4 percent of all owner-occupied property taxes (an estimated $13.6 billion).[1]

The gap between property taxes paid by tech and non-tech households varies from metro-to-metro, but in all 50 of the nation’s largest metros, tech homeowners paid more in annual property taxes, on average.

Perhaps unsurprisingly, the largest disparity between tech property taxes and non-tech taxes was in the San Jose metro, at the heart of tech-heavy Silicon Valley. As of 2014, 15 percent of the San Jose area’s households were home to at least one tech worker, but those households paid 22.3 percent of the metro’s residential, owner-occupied property taxes (table 1). And, at least in Silicon Valley, this disparity isn’t just the product of tech workers owning more expensive homes (which they do).

Silicon Valley tech homeowners have also typically lived in their homes for less time, meaning their home’s assessed value was more recently reset under California’s Proposition 13 rules, which would likely raise their tax burden. As of 2014, 7.4 percent of non-tech homeowners in San Jose had moved into their home within the past two years (between 2012 and 2014), versus 15.6 percent of tech homeowners.

And while local assessors clearly believe that tech workers own more expensive homes, tech workers themselves also believe the same. An examination of owner-assessed home values split by non-tech and tech households revealed that tech homeowners are much more concentrated at the upper-end of the owner-assessed home value distribution (figure 1).

Finally, the income gap itself, even within metros, for tech versus non-tech households is especially pronounced (figure 2). According to the ACS, 23.3 percent of tech households nationwide earned more than $178,000 per year, versus 9.4 percent of non-tech households. This likely means tech households also pay more in income taxes – though not necessarily, given the vagaries of individual deductions and various state, local and federal tax loopholes.

[1] The data for this analysis comes from the 2014 American Community Survey. Specifically we used the person-level data provided by IPUMS through the University of Minnesota. We used occupation codes to identify if households had at least one tech worker. For property taxes, the ACS top-codes values at $10,000. We imputed these values using our own property tax data. We took the average property tax of homes that paid above $10,000 in property taxes in 2014.