Tax Plan has Clear Winners and Losers

Houston Chronicle ^ | May 7, 2006 | R.G. RATCLIFFE

[anymouse]

With most of the state's business organizations backing the new business tax and property tax relief bills, legislators turned a deaf ear to such concerns from businesses.

The special interests got their exemptions and the rest of us get to pay through the nose.

But Allaway said business support for the plan could evaporate if the Legislature does not guarantee a future reduction of public school property tax rates to at least $1 per $100 of valuation. He said that level of property tax savings is needed to offset the new business taxes.

Bait and switch. If the Texas Legislature doesn't come through with the property tax reduction and just spend, spend, spend - they might as well take their name off the ballot as Texas Republicans will vote them out of office or just not vote.

[FairOpinion]

"taxes because the tax is based on gross revenues, not net profit. "


==

How awful!

[FairOpinion]

Need for Federal and STATE FairTax -- overtaxing businesses ping.

"But under a new business tax that has been approved by the Texas Legislature, Aztec would have owed $81,000 in taxes because the tax is based on gross revenues, not net profit."

[Extremely Extreme Extremist]

BUMP

[spikeytx86]

This new business tax can only be described as loathsome and destructive.

New start ups and small business's who are the top employers, will be hit the hardest while wal mart and refining companies laugh all the way to the bank.

Consumers need to be outraged as this is going to be nothing more then an additional sales tax as most business could not afford to pay all or most of the tax and thus will have to pass it along. Not only will this make prices go up, it will make small business's uncompetitive and go under as the big boys gobble up there market share.

Look I am all for property tax relief but dear god not at the expense of business's and jobs. Property tax cuts mean little if you are out of work because of some new tonic the dip sh*ts down in Austin concocted to solve our property tax ills. We have anywhere from a $8-10 billion surplus, the property tax relief will only cost a little over 6 billion. There is enough surplus to pay for the tax cuts and to weather a sudden down turn economically.

[lewislynn]

Need for Federal and STATE FairTax -- overtaxing businesses ping.

"But under a new business tax that has been approved by the Texas Legislature, Aztec would have owed $81,000 in taxes because the tax is based on gross revenues, not net profit."

HUH?

Fairtax rate:

`(1) FOR 2005- In the calendar year 2005, the rate of tax is 23 percent of the gross payments for the taxable property or service.

[ancient_geezer]

The description of this tax is very similar to the European turnover taxes prevalent throughout Europe around WWII.

The problem with business turnover taxes is they cascade throughout the economy laying tax on tax creating an ever growing exponential burden on all production. These taxes were so bad, they were removed in Europe and replaced by VATs as an fix to correct the cascade of the tax from business to business growing without bound. A credit voucher system was introduced into the turnover tax to cause a pass through of the tax to end consumers retaining the control features over business to enhance governments ability to extract high levels of revenue from business activities. The result is what is now commonly called the a VAT.

A bit of history and the VAT and how it came about can be found here in a discussion of VATs, and teh Australian GST to there forerunner the turnover tax.

http://www.uq.edu.au/economics/johnquiggin/news/GST9806.html

"The VAT was introduced in France in 1954, to replace a system which relied a highly distortionary turnover tax on sales to supplement a rather ineffectual income tax system. The problem with a turnover tax is the 'cascade' effect arising from the fact that goods are taxed every time they change hands. The effective rate of tax on a good therefore depends on the length of the marketing chain from producer to final consumer. At even modest rates, cascade taxes are highly distorting. The VAT solves this problem elegantly, by allowing firms to credit the tax already paid on their inputs against the tax imposed on their sales. The net tax payable is therefore a fixed proportion of value-added. ..."

"Like the metric system, the VAT was adopted by other European countries, and the use of a VAT was made a condition of membership of the European Union. Once again, the English-speaking countries had less need to make the change, and were slower to do so. Their income tax systems were more effective, and their wholesale and retail sales taxes were less distorting than cascade taxes. ..."

[Herakles]

A similar thing is going on in Pennsylvania - trying to reduce property taxes by shifting the tax load. A local school board is trying to ram a 100 million dollar new school down the tax payers throats and I know of 3 other districts locally trying to do the same thing.

Since most property taxes go to supporting the schools; maybe people should realize that there are limits as to how much the education of their child is worth, and if they want more, they should pay for it at some private school instead of burdening everyone else with the education of their little Johnny or Janey!

[enviros_kill]

Another argument for the simplicity of the FairTax. Need lots more public support. FairTax.org is bringing FairTax training to Texas in May.
See this link for dates:
http://fairtaxgroups.com/index.php?topic=110.msg3753#msg3753

FairTax (retail sales tax) in Texas would be 10-11% to replace all property taxes and business taxes according to a study by the Texas Public Policy Foundation. I'd sign up for that in a minute.

Changing Texas
A Fair Tax for Texas?
By Richard Vedder, Ph.D. and Byron Schlomach, Ph.D.
http://www.texaspolicy.com/publications.php?cat_level=6
(scroll down on this page to find the study)

[ancient_geezer]

FairTax (retail sales tax) in Texas would be 10-11% to replace all property taxes and business taxes according to a study by the Texas Public Policy Foundation. I'd sign up for that in a minute.

That would be a good move for a lot of states. with the combination of state income, property and existing sales taxes that percentage represents a typical rate for most places.

A Taxreform bump for you.

If anyone would like to be added to this ping list let me know.

On the federal level, John Linder in the House(HR25) & Saxby Chambliss Senate(S25) offer a comprehensive bill to kill all income and SS/Medicare payroll taxes outright and replace them with with a national retail sales tax administered by the states.

H.R.25,S.25
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.

Refer for additional information:

• search: "national sales tax" OR "national retail sales tax" OR "fairtax"

[socialismisinsidious]

How about we send little Johnny or Janey to whatever school we want and we get to take OUR money with us...the tax money goes with the child. Nothing like the free market to make schools competitive, get them to listen to the parents and keep them on a budget.

[lewislynn]

FairTax (retail sales tax) in Texas would be 10-11% to replace all property taxes and business taxes according to a study by the Texas Public Policy Foundation. I'd sign up for that in a minute.

Sure, "replaced" for how long? 'Till the next legislative session when the children need more school money?

Couple that idiocy with the Fairtax dream rate of 30% national and you have a 40+% sales tax rate...

Texans oughtta go for that. 40+% sales tax would be great for their economy too.< /sarcasm >

[groanup]

The fair tax can simplify all of this BS and make paying taxes voluntary instead of bowing to thugs.

fair tax bump

[BJClinton]

My taxes will go down with this, pretty substantially too. The problem is we will have created an income tax. A few years down the road, some sleazbags in Austin will decide they need more money to buy votes with and they'll up the percentage a little. And then they'll do it again a few years late. Rinse and repeat.

They need to simply cut proprty taxes by the amount of our surplus and leave it at that. If they need more money they can cut spending.

[FreePaul]

Look I am all for property tax relief...

This new tax has nothing to do with property tax relief. That is part of the sales scam that has been promised to the homeowners. By the time this kicks in appraised value increases will have eaten up any proposed savings. These same Republicans, legislature and other elected officials, refused reasonable limits on tax increases during the previous session.

[Herakles]

I agree completely,but when I was talking to my Pennsylvania Republican state senator, he wanted us to foot the bill for his children since his wife was a teacher. I think if he wasts a better education for HIS kids he should pay for it! I think if his wife wants a new office and a nice job he should put her to work doing something other than teaching. Why should this scumbag have a nice life at our expense?

[Conservative Goddess]

Thanks for the ping.....I think.

I'm amazed that anyone still believes that taxing business relieves the people of the burden. "Corporations [businesses] don't pay taxes, PEOPLE do." Why is that so hard to understand?

I thought the PA Legislature had cornered the market on Stupidity....Regrettably, I see there was enough left to cover Texas too.

[socialismisinsidious]

But what are you worried about? Didn't you hear? Our Governor is going to reduce property taxes!...he'll get right on that soon. really.
It's not that hard.....all you have to do is fit in the right entitlement group and you'll be getting some.

"Why should this scumbag have a nice life at our expense?"

But, I thought that was the point. ; )

[Kellis91789]

There will never be a shortage of stupidity. If we could figure out how to run electric generators on it, we'd have an energy source that would never run out.

It sounds like Perry has grabbed all the worst aspects of any tax scheme -- apply it selectively, let it compound through every level of production, and hide it from the consumer that will ultimately pay for it.

All of these things make it very different from the FairTax, but you just know there are yahoos that will equate the two.

[Herakles]

"But what are you worried about? Didn't you hear? Our Governor is going to reduce property taxes!...he'll get right on that soon. really.
It's not that hard.....all you have to do is fit in the right entitlement group and you'll be getting some."

It appears that your shit detector has gone off too! I had to unplug mine, its was making so much noise.

""Why should this scumbag have a nice life at our expense?"

But, I thought that was the point. ; )"

I swear to god, I was talking to this Republican state senator and I though he was a Democrat.