The economy of Texas is a dominant force in the economy of the United States. One of the largest growing economies in the nation, Texas is, as of 2006, home to six of the top 50 companies on the Fortune 500 list and 56 overall, more than any other state.  Texas has an economy that is the second largest in the nation and the 15th largest in the world based on GDP (PPP) figures. As the largest exporter of goods in the United States, Texas currently grosses more than 100 billion dollars a year in trade with other nations.
Texas is second only to California, with almost 11 million civilian workers giving it the second largest workforce of any state in the United States. The lack of personal income tax as well as the largely undervalued real estate throughout Texas has led to large growth in population. Since the 2003 legislature the Governor's office has made economic development a top priority. The state has two major economic centers: Dallas and Houston. Houston stands at the center of the petrochemical and biomedical research trades while Dallas functions as the center of the aerospace/defense manufacturing and information technology labor market in Texas. Other major cities include San Antonio, Austin, Corpus Christi, Lubbock, Amarillo, Abilene, College Station, Beaumont, Tyler, Odessa and Midland. Other important cities include Killeen (home to Fort Hood, the largest military post in the U.S.) and the cities of Brownsville, El Paso, Del Rio, Eagle Pass, Laredo, and McAllen (these have particular significance due to their location on the border with Mexico, making them important trade points).
Known for its production in oil and gas, Texas also is one of the leaders in transportation and technology. Exxon, Valero, and Marathon Oil all are located in Texas, as well as Southwest Airlines, American Airlines, Continental Airlines, Dell, and Sysco Foods. Dallas-Fort Worth International Airport and Houston’s George Bush Intercontinental Airport are two of the most trafficked airports in the nation and fuel the large exporting industry. Texas is the largest international exporter among the 50 American states, with international merchandise exports totaling $117.2 Billion in 2004. The Port of Houston is among the top 10 sea ports in the world in terms of commerce; Air Cargo World rated Dallas-Fort Worth International Airport as "the best air cargo airport in the world."
Legislation & Grant Initiatives
In June 2003, as an effort to attract new businesses and facilitate growth, the Texas government passed legislation funding the Texas Enterprise Fund and the Texas Emerging Technology Fund. These funds have given more than $316 million to companies through 2006, making Texas one of the fastest growing economies in the nation. Further, initiatives such as Tort Reform (2003) and tax incentives are being utilized in order to help small and big business alike.
Texas as an independent nation
The economy of Texas is often cited for how it would compare to other countries if Texas were an independent nation. The statistic quoted varies widely (usually placing Texas between 10th and 15th) depending on the source.
The two main issues are:
- determining Texas's gross state product
- determining the gross domestic product (GDP) for various countries
Texas's gross state product
According to the Bureau of Economic Analysis, Texas's Gross State Product (GSP) is $989 billion (2005 data, revised July 2006). The GSP increased at an annual rate of 5.1% in 2005. Texas is responsible for 7.9% of the United States' gross domestic product.
Per capita personal income
Texas is one of the eight states of the United States with no state income tax. In addition, Texas does not allow cities to impose income taxes above and beyond the federal level. This means that for the residents of Texas the maximum rate of income taxation cannot exceed 35.0%, all of which goes to the national government.
Wealthiest and poorest places in Texas