Economy

Main article: Economy of Texas

See also: Texas locations by per capita income

Astronaut training at the Johnson Space Center in Houston.

As of 2014, Texas had a gross state product (GSP) of $1.648 trillion, the second highest in the U.S.^[157] Its GSP is greater than the GDPs of Australia and South Korea, which are the world's 12th- and 13th-largest economies, respectively. Texas' economy is the fourth-largest of any country subdivision globally, behind England (as part of the UK), California, and Tokyo Prefecture. Its Per Capita personal income in 2009 was $36,484, ranking 29th in the nation.^[158]

A geomap depicting the income, by county, in Texas as of 2014.

Texas's large population, abundance of natural resources, thriving cities and leading centers of higher education have contributed to a large and diverse economy. Since oil was discovered, the state's economy has reflected the state of the petroleum industry. In recent times, urban centers of the state have increased in size, containing two-thirds of the population in 2005. The state's economic growth has led to urban sprawl and its associated symptoms.^[158]
As of April 2013, the state's unemployment rate is 6.4 percent.^[159]
In 2010, Site Selection Magazine ranked Texas as the most business-friendly state in the nation, in part because of the state's three-billion-dollar Texas Enterprise Fund.^[160] Texas has the joint-highest number of Fortune 500 company headquarters in the United States, along with California.^[161][162]
In 2010, there were 346,000 millionaires in Texas, constituting the second-largest population of millionaires in the nation.^[163][164]

Taxation

Texas has a "low taxes, low services" reputation.^[147] According to the Tax Foundation, Texans' state and local tax burdens rank among the lowest in the nation, 7th lowest nationally; state and local taxes cost $3,580 per capita, or 8.4 percent of resident incomes.^[165] Texas is one of seven states that lack a state income tax.^[165][166]
Instead, the state collects revenue from property taxes (though these are collected at the county, city, and school district level; Texas has a state constitutional prohibition against a state property tax) and sales taxes. The state sales tax rate is 6.25 percent,^[165][167] but local taxing jurisdictions (cities, counties, special purpose districts, and transit authorities) may also impose sales and use tax up to 2 percent for a total maximum combined rate of 8.25 percent.^[168]
Texas is a "tax donor state"; in 2005, for every dollar Texans paid to the federal government in federal income taxes, the state got back about $0.94 in benefits.^[165] To attract business, Texas has incentive programs worth $19 billion per year (2012); more than any other US state.^[169][170]

Agriculture and mining

Cotton modules after being harvested in West Texas

An oil well

Brazos Wind Farm in the plains of West Texas

Electronic Data Systems headquarters in Plano

Texas has the most farms and the highest acreage in the United States. The state is ranked #1 for revenue generated from total livestock and livestock products. It is ranked #2 for total agricultural revenue, behind California.^[171] At $7.4 billion or 56.7 percent of Texas’ annual agricultural cash receipts, beef cattle production represents the largest single segment of Texas agriculture. This is followed by cotton at $1.9 billion (14.6 percent), greenhouse/nursery at $1.5 billion (11.4 percent), broilers at $1.3 billion (10 percent), and dairy products at $947 million (7.3 percent).^[172]
Texas leads the nation in the production of cattle, horses, sheep, goats, wool, mohair and hay.^[172] The state also leads the nation in production of cotton^[171][173] which is the number one crop grown in the state in terms of value.^[174] The state grows significant amounts of cereal crops and produce.^[171] Texas has a large commercial fishing industry. With mineral resources, Texas leads in creating cement, crushed stone, lime, salt, sand and gravel.^[171]
Texas throughout the 21st century has been hammered by drought. This has cost the state billions of dollars in livestock and crops.^[175]

Energy

See also: Deregulation of the Texas electricity market

Ever since the discovery of oil at Spindletop, energy has been a dominant force politically and economically within the state.^[176] If Texas were its own country it would be the sixth largest oil producer in the world.^[177]
The Railroad Commission of Texas, contrary to its name, regulates the state's oil and gas industry, gas utilities, pipeline safety, safety in the liquefied petroleum gas industry, and surface coal and uranium mining. Until the 1970s, the commission controlled the price of petroleum because of its ability to regulate Texas's oil reserves. The founders of the Organization of Petroleum Exporting Countries (OPEC) used the Texas agency as one of their models for petroleum price control.^[178]
Texas has known petroleum deposits of about 5 billion barrels (790,000,000 m³), which makes up about one-fourth of the known U.S. reserves.^[179] The state's refineries can process 4.6 million barrels (730,000 m³) of oil a day.^[179] The Baytown Refinery in the Houston area is the largest refinery in America.^[179] Texas also leads in natural gas production, producing one-fourth of the nation's supply.^[179] Several petroleum companies are based in Texas such as: Anadarko Petroleum Corporation, Conoco-Phillips, Exxon-Mobil, Halliburton, Marathon Oil, Tesoro, and Valero, Western Refining.
According to the Energy Information Administration, Texans consume, on average, the fifth most energy (of all types) in the nation per capita and as a whole, following behind Wyoming, Alaska, Louisiana, North Dakota, and Iowa.^[179]
Unlike the rest of the nation, most of Texas is on its own alternating current power grid, the Texas Interconnection. Texas has a deregulated electric service. Texas leads the nation in total net electricity production, generating 437,236 MWh in 2014, 89% more MWh than Florida, which ranked second.^[180][181] As an independent nation, Texas would rank as the world's eleventh-largest producer of electricity, after South Korea, and ahead of the United Kingdom.
The state is a leader in renewable energy commercialization; it produces the most wind power in the nation.^[179][182] In 2014, 10.6% of the electricity consumed in Texas came from wind turbines.^[183] The Roscoe Wind Farm in Roscoe, Texas, is one of the world's largest wind farms with a 781.5 megawatt (MW) capacity.^[184] The Energy Information Administration states that the state's large agriculture and forestry industries could give Texas an enormous amount biomass for use in biofuels. The state also has the highest solar power potential for development in the nation.^[179]

Technology

With large universities systems coupled with initiatives like the Texas Enterprise Fund and the Texas Emerging Technology Fund, a wide array of different high tech industries have developed in Texas. The Austin area is nicknamed the "Silicon Hills" and the north Dallas area the "Silicon Prairie". Texas has the headquarters of many high technology companies, such as Dell, Inc., Texas Instruments, Perot Systems, Rackspace and AT&T.
The National Aeronautics and Space Administration's Lyndon B. Johnson Space Center (NASA JSC) located in Southeast Houston, sits as the crown jewel of Texas's aeronautics industry. Fort Worth hosts both Lockheed Martin's Aeronautics division and Bell Helicopter Textron.^[185][186] Lockheed builds the F-16 Fighting Falcon, the largest Western fighter program, and its successor, the F-35 Lightning II in Fort Worth.^[187]

Commerce

Texas's affluence stimulates a strong commercial sector consisting of retail, wholesale, banking and insurance, and construction industries. Examples of Fortune 500 companies not based on Texas traditional industries are AT&T, Kimberly-Clark, Blockbuster, J. C. Penney, Whole Foods Market, and Tenet Healthcare.^[188] Nationally, the Dallas–Fort Worth area, home to the second shopping mall in the United States, has the most shopping malls per capita of any American metropolitan area.^[189]
Mexico, the state's largest trading partner, imports a third of the state's exports because of the North American Free Trade Agreement (NAFTA). NAFTA has encouraged the formation of controversial maquiladoras on the Texas/Mexico border.^[190]