Posted on 03/11/2005 8:30:54 AM PST by SwinneySwitch
79th LEGISLATURE
Bill would expand franchise levy, no longer require tax on payroll.
Texas House leaders on Thursday again redrew their plans for changing the state tax system, saying they want to expand the corporate franchise tax instead of requiring all businesses to pay a payroll tax.
Most businesses in Texas avoid paying the franchise tax, many by organizing as partnerships. The House plan proposed Thursday would expand the tax to include partnerships, then give businesses the choice of paying the current franchise tax or the payroll tax that a House committee approved earlier this week.
Lawmakers are considering boosting a series of taxes to pay for a one-third cut in school property taxes. The effort is part of their larger goal of changing the way Texas pays for public schools by shifting the source of about $5.4 billion a year from local to state taxes.
After approving major changes to education laws Wednesday, the House was scheduled to debate the tax shift Thursday, with the goal of a final vote by today. The issue of school and tax reform would then move to the Senate, which is expected to pass its own plans. The two chambers could then hammer out the differences in a conference committee before the legislative session ends in late May.
But a series of drafting errors and questions about the proposed changes prompted House Speaker Tom Craddick to end the day's session after more than four hours on the bill and give authors more time to work out the kinks in the bill.
"People looked like they were getting tired, and I thought it was better to come back and do it in the morning," said Craddick, R-Midland.
The change marked the second time in a week that lawmakers changed the tax proposal. The House Ways and Means Committee on Monday slightly increased a couple of proposed taxes and added a 3 percent sales tax on snack foods after Comptroller Carole Keeton Strayhorn's office said the bill that the committee approved last week would not raise enough money to offset the property tax cuts.
Some lawmakers and business groups also assailed the payroll tax over the past week, saying it would discourage employers from adding jobs. Giving companies the option of paying the franchise tax appeared to ease some of those concerns.
"I had some real heartburn over a brand-new tax, as did many of my constituents," said Rep. Dan Gattis, R-Georgetown. "With the change that was created, I feel better about it."
Under the current franchise tax, companies with annual gross earnings of more than than $150,000 must pay either 0.25 percent of the value of their capital or 4.5 percent of their net corporate income, whichever amount is greater. The plan discussed Thursday would give companies the choice of paying one of those levies or the proposed payroll tax of 1.15 percent of each employee's wages, up to $90,000.
"Texas has a diverse business climate, and this creates flexibility for different types of businesses," said Rep. Dan Branch, R-Dallas.
The proposal defines an employee as a worker for whom the business contributes to the unemployment insurance system.
Proprietorships or partnerships that do not have any employees would not have to pay one of the business taxes. Subjecting them to those taxes is widely considered akin to assessing a state income tax, which the state constitution forbids.
Further changes to the proposed tax package could come today, particularly if Craddick's team cannot win support for the latest proposal from a majority of House members.
In its current form, the package boosts the state sales tax from 6.25 percent to 7.25 percent, raises the cigarette tax from 41 cents per pack to $1.41 per pack and increases the sales tax on automobile and boat purchases.
The House will consider dozens of amendments before voting on the full tax package. Some Democrats have voiced frustration that lawmakers decided that amendments must be revenue-neutral, meaning anything that would bring in more money for the state must reduce taxes somewhere else, and vice versa.
"It doesn't give the body the opportunity to raise money for vital initiatives," said Rep. Garnet Coleman, D-Houston. "We all know this government is underfunded."
OVERSPENT!!
Texas House Ping!!
Coleman is a little rich kid from a rich family. Garnet has never wanted for anything. His daddy was worth a mint. Garnet, unlike "his people" lives in a house worth $500K or more. The only reason Garnet is in the Texas legislature is because of who is father was and the money and connections his family has.
See more on what kind of punk Garnet is here.
WOAI-1200, San Antonio, is reporting that a special committee has quietly voted a 30% pay RAISE for Gov. Perry and other bureauFatCats today while they are still trying to figure out how to RAISE our TAXES. Bassturds.
I'm looking for the link.
Go to MySA.com
Well good. They got our message.
Dan Gattis is one of the good guys I'll assure you. He 'get's it!
Well I guess they need the extra cash for sweets, snacks and smokes.
Senate committee OKs pay raise for governor
Houston Chronicle
Associated Press
AUSTIN -- As lawmakers debate over salary increases for teachers, a Senate committee approved a proposal that would give the governor and other elected officials a more than 30 percent raise.
Under the measure, Perry's annual salary would increase from $115,000 to $150,000. The pay for other statewide elected officials would go up from $92,217 to $125,000.
But Gov. Rick Perry said he doesn't want a pay increase.
"He has no desire for a pay increase. He certainly does not see a need for a statewide pay increase for elected officials," said governor's spokesman Robert Black.
The raise provision was added to an appropriations bill in the Senate Finance Committee.
"They're entitled to that level of compensation," said committee chairman Steve Ogden, the Bryan Republican who sponsored the measure. "Like anything else in state government, you get what you pay for."
Although the Thursday vote giving the raises approval was unanimous, only a slight majority of the committee's members were present at the meeting.
While some lawmakers were outraged, the proposal could make it through the Senate because specific changes to budget bills approved by a committee are rare.
The last raise for state officials, about a 20 percent increase, came in 1995.
Here's the link-
http://www.chron.com/cs/CDA/ssistory.mpl/metropolitan/3080038
Gosh, this is not the time for pay raises. Raise taxes, get a pay raise. Makes sense to me! NOT.
My "rep" told me he wants to place franchise tax on partnerships wherein the partner would pay franchise tax on his income. I told him I would just reorganize out of state like in Nevada or offshore.
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