Full Disclosure: I am 100% biased towards my hometown of Houston and I think that I can safely say that this question is so tailor-made for me to answer that it almost seems like a plant.
The short answer is Houston is an incredibly supportive place to launch a tech startup.
The long answer is:
1) taxes are tolerable and largely irrelevant for a startup (see other answers above)
2) Talent is abundant and doesn't have the attitude and management problem of jumping to the next deal like you have in a hot startup town like the Bay Area, Boston, Seattle, Portland or Austin. No one retires to Houston - everyone comes here to work for a couple of years and ends up staying for twenty.
3) Office Space is dirt cheap for a sub-lease, and there are some incredible alternatives - specifically the largest coworking space in the US, carolinecollective.cc and two new coworking sites that I'm personally helping start, www.katydock.com and a brand new site up north in The Woodlands. As Mikey mentioned above (thanks for the hat tip), the Houston Technology Center houstontech.org has a very strong base of dozens of tech startups in the middle of one of the hottest neighborhoods for young, creative class people called Mid Town. It is five blocks from one of the most social media/tech startup/student friendly coffee/bars in the country, @CoffeeGroundz (coffeegroundz.net and business.twitter.com/twitter101/case_coffeegroundz) where you can regularly find several startups huddled around the tables.
4) Once again, full disclosure - I am personally very active in the startup scene having recently (the last day of the year, so four days ago as I'm writing this) left the Houston Technology Center as the Director of Entrepreneur Development - a non-profit business incubator that basically helps startups through all of the funding, management and customer issues that face early stage tech startups. In addition to organizations that have already been mentioned like HTC and Rice Alliance - home to the largest MBA business plan competition in the world, we've created a vibrant community full of professional and fun events such as OpenCoffee Club, Startup Houston Happy Hour, RefreshHouston, NetSquared, TiE Houston, and a significant and diverse User Group scene especially a very large iPhone Developer meetup, plus quite a few BarCamp-style events - 20+ in the last two years. sites.google.com/site/houstontechgroups/
You will find that all of the obvious negatives of Houston - the heat, humidity, and long commutes are quickly outweighed by the fact that the spirit of this city is so friendly, helpful and intrinsically entrepreneurial that its a wonder more people don't talk about it as a startup hub. I love Austin and go there regularly for startup-related work and SXSWi (where I'm speaking this year about building tech communities, via y-combinator style seed-funding/mentorship programs) and it's only 150 miles or 2 1/2 hours by car.
Houston has a lot to offer entrepreneurs who are willing to take the risk of coming to a place that's not one of the tech mecca's - just take a look at http://www.startuphouston and I'm happy to talk to you directly if you have more questions:
marc1919 -at- gmail -dot- com
713-401-9394 Google Voice