Skip to comments.Be Bold Texas: A principled case for substantial franchise tax reform (Part I)
Posted on 01/20/2013 6:04:56 PM PST by manic4organic
This report lays out the case for elimination of the franchise tax. Part II of this report (which is forthcoming) advocates for a transition Be Bold Texas! Franchise Tax Report
Be Bold Texas! Franchise Tax Report (PDF)
away from property taxes to consumption taxes to fund the maintenance and operations of public schools. That report will also make the case for a lower property tax appraisal cap or property tax revenue cap to provide homeowners and business owners with relief from inexorable appraisal growth. Taken together, these reforms would represent a substantial transformation of the states tax structure, and thus, the state economy.
The fundamental point is that Texas has an opportunity to make a bold fiscal move by eliminating a tax or by substantially reducing a tax. Precisely how this is to be achieved can be determined by policy makers; this report simply lays out a path forward and illustrates the economic benefit of starting down that path.
To that end, the states franchise tax and school district maintenance and operations (M&O) property tax must be the focus of tax relief efforts. By cutting taxes now, Texas can create substantial dynamic economic benefits that will pay dividends in the future, bringing increased economic activity:
If Texas cuts taxes right now, it will encourage all the more business and entrepreneurship, on top of what has already occurred, without jeopardizing current governmental operations. Indeed, a virtuous circle will unfold in which tax cuts make the state ever more attractive, generating receipts that can bring about yet another tax cut down the line.
This report lays out the path to providing this kind of tax relief and illustrates the valid and defensible economic benefits of undertaking such an approach.
On behalf of TCCRIs State Taxation and Revenue Task Force, the Beacon Hill Institute at Suffolk University undertook dynamic fiscal and economic analyses of eliminating or substantially reducing the franchise tax, and of transitioning from property taxes to consumption taxes to fund public schools.
As outlined in detail in this report, either one of these reforms would produce substantial economic benefits for the state by creating jobs, attracting higher levels of business investment, and increasing disposable personal income. These recommended reforms would also establish a more efficient and less punitive tax structure for the state.
I went down to protest my property tax bill here in Montgomery co, Texas....first time to do this. What a freakin circus.
I couldn't believe how much of a joke the whole process was.
We need property tax reform in Texas and take the damn burden off of homeowners. Illegal aliens, drug cartels running rampant.
Pass a consumption tax/sales tax so the illegals in this state pay their share instead of getting gubbamint benefit gravy train on the backs of homeowners.
I still own property in Texas, so I am interested in this
Consumption taxes are so much better than income and property taxes because consumption taxes encourage economic growth....for the government to get revenue, they must let business and consumers engage the economy
We had consumption taxes (mainly tariffs) until the 1910’s...and funded government quite well. Only when Liberal Globalists started pushing Income Taxes, Property Taxes, and the like, did we see taxes and spending skyrocket.
The American economy would boom if we dropped income, property, and other direct taxes....and went back to the consumption/tariff tax. Unfortunately, your Liberal Free Trader Communist Globalists love income/property taxes and hate consumption/tariff taxes.
Florida talked about this a while back, but nothing came about. I hope Texas does not listen to the NAFTA/NAU/Free Trader wonks and dump property taxes for consumption taxes
I've got a better idea. Shut down government spending. Get rid of property taxes and reduce sales tax to 4%.
Adjust size of government as required. My local government has too damn much money. They make it difficult to bootleg a
piglet ugly dog in town for a few months.
We need to eliminate quite a few State jobs and cut agencies. Currently we have more people working for the State of Texas than California, the only difference is we aren’t paying as much, but I suspect we can cut or eliminate quite a few.
We also need to reduce waste and cut the number of stupid fees and permits.
Texas shampooers need to obtain a permit! That is stupid. Current law says you have to have a 4 year degree and a teaching certificate to coach sports. We need major reform in our laws and cut back on the regulation MORE.
I agree with you 100%, but not gonna happen.
If it fails, it's because of Nancy nay-sayers that say it can't happen.
Push extremes on your elected officials. Be willing to compromise for half. 4% sales tax instead of 8%, and 50% of current state employees.
Insist on Texas Rangers (not the crappy baseball team, the law enforcement Rangers) funding, and Texas State Guard funding. Everything else, and I mean everything else is negotiable.
Texas government has all the spanish land grants they can make money with. They don't need sales taxes or property taxes.
Yes . I used to think Perry was a mindless pretty boy. He is our Hero!! This guy has cahones!!. He is MY MAN> Secede from this crappy union. !! If Americans want to kill us come on!! Kill our babies!!! You are are killing a million a year anyway !! What the hell? Live free or die!!
Perry is meaningless. Texas governors are almost powerless. I am working hard to get rid of the current Lt. Governor, and get a conservative instead.
Because of your ridiculous post, I'll post the ping list sign up for that.
Give Dewhurst the Boot in 2014 (((Ping List)))
To be added or removed from this list, freepmail me.
This is a low volume ping list at this time.
Personally, I like the idea of no property taxes. There are too many ISD superintendents making 6-figures and producing poor education figures in their districts. Heck, the lottery was promoted "fo' deh' chilluns", and it failed miserably; 25% of fuel taxes go to education in Texas, on top of property taxes. Way too much for too little return.
“Damn near 8% sales tax to the government is plenty, thank you very much.”
You are absolutely right. Property taxes won’t be cut, the consumption (sales) tax will be added on top to bring in more money.
Goods are too high now and sales are suffering because people don’t have the money to buy. Food cost continues to go up and that’s where their money is going.
NO MORE SALES (consumption) TAX.
No, it's because we have Republican RINOs in office.
I really like your spunk. I've always considered myself as an independent conservative.
If I were king for a day, every single state department/agency would take an immediate 20% cut except a few essential agencies 10%.
Day one, place a tariff on Chinese crap, 30% fee on cash transfers out of the state to Mexico. Use the money to beef up law enforcement near the border. Make the illegals pay to shut the border down.
Lower corporate/franchise taxes to spur more investment, drastically slash property taxes, scrap this stupid toll road scheme Rick RINO Perry is cooking up. Increase penalties for any business that even attempts to use illegal labor.
But, at the end of the day...I'm a realist.
Then get rid of them. It's easier in Texas than in other (yankee) places.
I keep hearing 'kain't' when I need to be hearing 'WILL!'.
Either we're free Texicans or we're subjects. Chose.
I intend to retire a bunch of folks around Austin to their farms and ranches in 2014.
Dewhurst and Straus first.
No Kidding, schools get way too much. This is the first line of the KISD 2010-2011 budget brochure “Killeen ISD will spend a total of $392 million from all fund sources (excluding capital projects funds) in 2010-11 to educate approximately 40,000 students.” I have a big problem with that. Before I looked it up I assumed that the KISD was 1/4 of what it really is. My not very big city is spending almost half a billion dollars a year on education, it is mind boggling. School spending is out of control.
Way out of control. I hired some local boys for a task (old enough to drive). It required a little bit of just regular math. They couldn't manage it. They couldn't understand it after I explained it to them.
Those kids are ruined for reality. How do you build a State or a country with kids that can't do basic math?
Yeah—I know. I read through that article and the posts following it——but-—I don’t understand most of it. My hubby does all our tax stuff—he’s good at it.
I, on the other hand am very deficient in tax matters, as well as math in general.
I'll bet he thinks Austin could go on a diet.
> “How do you build a State or a country with kids that can’t do basic math?” <<
I’ve had to slog through a project with 2 guys that had BS in engineering One from Tex, one from Colorado), but couldn’t do math beyond plain arithmetic. The US is in big hurt academically.
One bright spot story I'll share, is that one of my sorta step-daughters just graduated from UT with a petro degree. She had worked for me as an intern at an internet company, and she really did learn the math. Every bit that was required.
One conference room white board looked like something out of university most of the time.
We got a win on that one.
I know 10 more that can't/won't for that one that did.
I think we would all be much better off if we privatized the whole thing. Government does not do education very well.
I will give them killing people and breaking things. They do that ok, if you can get all the airmen pointed in the right direction..... Been there, done that.
I propose a radical idea: Return government to it's limited form described in old documents.
Yeah. I know. It's krazy. But that would work for me.
Same here in Williamson County. Two property tax increases pushed by the local gub’mint this year and passed by the low information crowd that falls for the threat of losing gub’mint services and school sports programs. It’s insane. A large segment of the populace here are illegals who pay no property tax and work for cash only.
Medina was a KOOK!
Yes,Yes,Yes!!! When my great aunt had to sell of part of her family farm every couple of years to pay the property taxes, I realized that nobody actually owns their home; they are just renters and the the government is the landlord. If you miss a “rent” payment (property taxes), you are evicted. Even if you owned the land before there was even a United States and had paid taxes on it for over two centuries.
In this electronic age, a replacement consumption tax is possible that answers the locality issue. Your credit card with zip plus four info would direct the taxes to your locality, no matter where you spent the money in the state (reciprocal state agreements?). If you use cash, then just give the cashier you zip. If you decline for privacy reasons, then the tax would go to the state to be sent back to the localities evenly.
This is a fundamental freedom issue of actually owning your land (property rights).
I wish we would and it would be the smartest thing to do. I do not think the powers that be will do anything before the government is out of money and has to radically cut spending back. I suspect that things will get very ugly when that happens.
As was mentioned upthread, Texas has a weak governor's seat. It wouldn't really matter if she were a "kook", would it?
Texas Republican gubernatorial candidate Debra Medina imploded on the Glenn Beck radio program this morning when she said she didn't have an opinion on whether the US government was behind the 9/11 attacks.
Medina, who has literally come out of nowhere to quickly become a legitimate candidate in the Republican primary, first laughed when Beck said he had received emails from listeners saying she was a "9/11 truther."
"That's the first time I've heard of that accusation," she said, not exactly denying the charge.
So Beck asked her straight up: "Do you believe the government was in any way involved in the bringing down of the World Trade Centers on 9/11?"
Easy answer, right? Nope.
"I think some very good questions have been raised in that regard," Medina replied. "There are some very good arguments, and I think the American people have not seen all of the evidence there, so I have not taken a position on that."
That answer caused a stir in the studio. Beck quickly followed up by asking her if she would disavow any of her staff if they were "9/11 truthers."
"Well, you know, that's a federal issue. We're very focused on issues in Texas, on Texas state government," she said. "I'm certainly not into mind control or thought policing people. "We've got a very diverse team in this state and that's because Texans are standing shoulder to shoulder to support and defend the Constitution. I frankly don't have time, you know, to go through and do psychological testing on people and know every thought or detail that they have."
Yeah, so now tell me how Perry would have answered............
The simple fact is that a lot of people, to include those on this board and Glen Beck, quashed a lot of hopes for a new governor in the state of Texas who might have brought some needed changes instead of more of the same.
IMO- Perry is Bush 2.0. All for taxation, and he (Perry) is still looking for that big Texas sized legacy, especially since his ideas for the TTC and the giardasil debacle were beaten down.
I don’t need to get out of the corner. I’ll openly admit that I supported her run over Perry.
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