Author Topic: Analysis: Asking Texas voters to swap higher sales taxes for property tax cuts  (Read 313 times)

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Offline Elderberry

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The Texas Tribune by Ross Ramsey March 15, 2019

Texas voters told candidates they want property tax relief, and it's remarkably expensive. That's why state lawmakers are talking about higher sales taxes.

In the rush of legislation filed before last week’s deadline, you wouldn’t be the only person who missed the measure proposing a 6.26 percent state sales tax rate. No reason you should have seen it or made note of it.

For one thing, it’s a teensy tax increase, at least on paper — at least for now. The state’s current sales tax rate is 6.25 percent, and local governments can add two cents on top of that rate. The increase to 6.26 percent is a placeholder in a proposed constitutional amendment — a place to put the real number when it’s available.

That number is in the possession of House Public Education Committee Chair Dan Huberty, R-Houston, who is talking to legislators about raising the state sales tax by a penny, to 7.25 percent (the new tax rate he’s waiting to propose), and pouring the money into public education. It wouldn’t be for new spending, but it would increase state spending enough to significantly lower local property taxes — the driving political force behind the state’s current legislative push for school finance reform.

A little change in your local property taxes, translated into statewide finance, takes a tremendous amount of money. But a 1-cent rate increase in sales taxes would produce a lot of money. The state collected $31.94 billion from sales taxes in the 2018 fiscal year, according to the Texas comptroller of public accounts; at that level of taxable sales, a 1-cent increase in the rate would bring in an extra $5.1 billion.

Local school districts, fueled by the local property taxes Texas voters hate so much, spent about $14.7 billion more than the state on public education in fiscal year 2018, according to the comptroller. The $5.1 billion from a 1-cent sales tax increase wouldn’t be enough to level that out, but it would sure make a dent.

More: https://www.texastribune.org/2019/03/15/asking-texas-voters-swap-higher-sales-taxes-property-tax-cuts/
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Offline RetBobbyMI

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Property taxes are out of control, particularly those levied by independent school districts. Changes in tax structure doesn’t solve the crux of the problem, which is out of control spending by the districts on things unrelated to teaching kids.

Secondly, the district boundaries are unrelated to other political boundaries which makes it difficult to hold the school districts accountable to anyone.
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Offline Sanguine

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I have some control over how much and where I spend my money.  My property taxes - no real control whatsoever.
Cui bono?

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Offline Bigun

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I have some control over how much and where I spend my money.  My property taxes - no real control whatsoever.

Absolutely!  And the sales tax base is FAR more broad than the property tax base.

Offline Elderberry

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I have some control over how much and where I spend my money.  My property taxes - no real control whatsoever.

The one control you have over property taxes is if your land is large enough to declare a agricultural or wildlife tax exemption.
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Offline Bigun

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The one control you have over property taxes is if your land is large enough to declare a agricultural or wildlife tax exemption.

Yeah but you still never really OWN it!

Offline Elderberry

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Yeah but you still never really OWN it!

Fine. You can go thru life knowing that no one actually OWNS a GD thing if it makes you happy.
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Offline XenaLee

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The one control you have over property taxes is if your land is large enough to declare a agricultural or wildlife tax exemption.

Yeah... such great 'control'.  Cause then you have to jump through liberal hoops every year... in order to get that tax exemption.  That's not what I call 'control over property taxes'.

http://www.wildlifemanagementtexas.com/TexasWildlifeExemptionFAQ
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Offline Sanguine

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Yes, I have an ag exemption.  I'm very careful to jump through all the hoops to keep it.
Cui bono?

Walk in Wisdom
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Offline Bigun

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Fine. You can go thru life knowing that no one actually OWNS a GD thing if it makes you happy.

Thank you!  Property taxes were fine back when only property owners could vote and were the ones getting the bills for what they voted for. Now everybody votes but the property owners are still the ones getting the bills!  See the problem?

Offline Absalom

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Property taxes are per se, discriminatory.
This alternative eliminates/minimizes that tax discrimination.

Offline corbe

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   Aren't most Texas municipalities already maxed out at 8.25% Sales Tax?
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Offline Hoodat

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Any time a government proposes substituting one tax for another, the people end up paying more taxes afterwards than before.
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Offline Elderberry

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   Aren't most Texas municipalities already maxed out at 8.25% Sales Tax?

Yep, but the legislature is in session and can bump it up it again.
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Offline austingirl

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The one control you have over property taxes is if your land is large enough to declare a agricultural or wildlife tax exemption.

I've got a wildlife exemption but I'm still renting from the government.
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Offline Sanguine

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   Aren't most Texas municipalities already maxed out at 8.25% Sales Tax?

Some competition could make that interesting.  If it's lower one community over, it will affect the consumer traffic.  Like those who to to NH to shop because they have sales taxes in their state.
Cui bono?

Walk in Wisdom
See then that you walk circumspectly, not as fools but as wise, redeeming the time, because the days are evil.

But the noble make noble plans, and by noble deeds they stand.


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