Posted on 08/24/2011 7:29:27 PM PDT by dragnet2
In Rick Perry’s August 13 presidential announcement speech in South Carolina the Texas Governor stated:
.…we have led Texas based on some just really pretty simple guiding principles. One is don’t spend all of the money. Two is keeping the taxes low and under control. Three is you have your regulatory climate fair and predictable.
Later in his speech he claimed:
I’ve cut taxes. I have delivered historic property tax reductions. I was the first governor since World War II to cut general revenue spending in our state budget.
But Perry’s record on taxes reveals something entirely different. Especially for Texas businesses, where things are far from fair and predictable.
On May 18, 2006 Perry signed into law a Business Margin Tax that dramatically changed the way businesses are taxed in Texas. The Dallas Morning News (DMN) May 16, 2006 called it ‘the largest tax increase in Texas. The paper continued,
In 2006, the state was facing a judicial mandate to change the unconstitutional way it funded public schools, mostly through property taxes. Under Perry's leadership, a tax swap was created that cut school property taxes by up to one-third. To pay for that, Perry signed a bill that nearly tripled the amount Texas collects from businesses. The tax swap created a net tax decrease, but the new business tax coupled with one added to tobacco still counts as the largest tax increase in Texas.
Crafted to replace the Texas Franchise Tax, it was explained by Harper and Pearson, a CPA firm in Houston, Texas, as “a tax on taxable margin, which is a concept similar to taxable income. Generally, an entity’s taxable margin is its revenue as reported on its federal income tax return less either its cost of goods sold or its compensation expense (limited to $300,000 per employee), but not both.” But there was widespread confusion over how the law permitted the calculation of cost of goods sold and which expenses were considered.
And Texas Conservative Review (TCR) echoed the DMN, adding,
[W]hat really irks conservatives is a business would have to pay taxes whether it made a profit or not. In that way, it is worse than a corporate income tax. The non-partisan Tax Foundation in 2006 described gross receipts taxes as poor tax policy that lead to harmful tax pyramiding, distort companies [sic] structures, and damage the performance of state and local economies. The tax was sold as a "trade-off" for lower property taxes. This is a recurring myth that never works…
In other words, critics say, it’s the same as having an income tax. Which is prohibited by the Texas Constitution that the Governor has sworn to uphold.
TCR continued,
It's hard to believe but the Texas Gross Receipts (Margins) Tax on business proposed by a Republican, Governor Perry, and passed by a GOP dominated legislature in 2006 was further complicated in 2007. This was the largest tax increase in Texas history, which requires business to pay up to 10% of its gross income to the state while large corporations were given loopholes.
And Texas Representative Gary Elkins (R) wrote,
I cast a "no" vote today on HB 3 for a number of significant reasons. First, this bill calls for the imposition of nothing less than an income tax on Texas business owners — a gross net receipts tax. Texas has a long-standing tradition of paying our way as we go. Given the substantial and ever-growing budget surplus, it is unconscionable to burden Texans with a new tax when we can simply use their money to meet the mandate imposed on us by the Texas Supreme Court.
He explained the effect on business like this:
… this new tax will have the effect of punishing many businesses that have unexpected expenses. For example, a service company that has a gross revenue of $1 million and payroll expenses of half a million dollars will pay a new income (franchise) tax of 1 percent on $500,000, or $5,000. Suppose that this company was frivolously sued and spent half a million dollars defending itself. This company would likely sustain a net operating loss in the year that it was sued but would nevertheless owe the State of Texas a franchise tax on income that was never realized. In addition, HB 3 does not take into consideration the numerous other expenses that are not related to payroll. For example, rent, phones, advertising, maintenance contracts on business equipment, casualty insurance, key man insurance, property taxes on real estate and business equipment, bank interest on notes, lease payments on equipment, occupancy taxes, filing fees, and a myriad of other expenses are not deductible under this new tax scheme.
He closed by adding,
The governor’s own policy advisor has informed members of the house that the average small service sector business will pay more in taxes and in most cases double, triple, or even quadruple what they are currently paying under the current franchise tax system.
The Houston Chronicle also argued that the tax is unconstitutional because the Texas Constitution requires a statewide vote in order to pass an income tax on individuals — including income they receive from partnerships — that Perry’s tax was enacted without a vote of the people, and that it taxes partnerships. The article noted astute law student Nikki Laing’s observation that just because the law declares itself not to be an income tax doesn’t make it so. She cited “ a number of U.S. Supreme Court decisions on the point, including one that said 'the mere declaration contained in a statute that it shall be regarded as a tax of a particular character does not make it such if it is apparent that it cannot be so designated consistently with the meaning and effect of the act.'"
Critics note that particularly unfair is the feature that businesses are taxed differently according to their classifications. According to a February 6 article in the Houston Chronicle, for example, businesses such as independently owned auto repair shops are taxed twice as much as, say, a dealership or franchise store, for the same services.
Beginning in 2012, the exemption from the tax falls from $1 million in revenue to $600,000, but it is uncertain whether that exemption will be extended.
The Tax Foundation’s evaluation of the measure is this:
With the Texas margin tax collecting far less in revenue than expected, causing significant confusion and compliance costs, resulting in significant litigation and controversy over "cost of goods sold" definitions, and facing calls for substantial overhaul and even repeal, it should not be used as a model tax reform for any other state.
Perry PASSED "Voter ID" Stop spreading lies. Did Arnold pass Voter ID? Has Palin?
Duncan Hunter!! Huzzah!
How’s that workin out for you?
You don’t get it. The fact that he signed the EO in the first place is the issue. And had it not been for the passing of HB 1098, parents of young girls in Texas would have to ask that the state NOT inject an unproven drug into their daughters’ veins. I find that unforgivable…and combined with his record of being pro-open borders, pro-illegal alien, pro-Dream Act and a myriad of other liberal leanings the conclusion is clear – Rick Perry is not a conservative and he is certainly not a man who deserves to get the Republican nomination. Not now, not ever.
None of it was forced.
Your the one that’s offended.
Forget a few things there sonny? muslim/islam/c.a.i.r. lover? CHECK. Open borders and illegal criminal invaders lover? CHECK. Ricardo Hussein Perryista...fake, fraud and a phony yet FReepers fall for this globalist jerk.
Apparently you haven’t hung around FR much if THAT little post bothers you. I thought it was funny. Have you not seen any images EVER on FR mocking politicians? You’re gonna cry because Perry is compared to a rebellious 50’s kid??? Who by today’s standards would be a choir boy...... thin skin you got there. We got a heck of a year ahead of us, so you need to toughen up or stock up on the Kleenex because if THAT hurt your feelings, you’re in for a lot of heartbreak........
You cant stick with the gardisil issue can you?
You have to start screeching about Mexicans.
You who live in Mexicos best established neuvo frontera
An “opt out” clause in a mandate bill dealling w/healthcare........... why......that sounds like...... uh..... OFREAKINBAMACARE....do you defend that also? Or you only defend liberal policies when they’re pushed by Republicans......
E Verify is about giving green card workers the right to spend money at 8.75% tax in Texas
Voter Id is about saying you are NOT CITIZENS, YOU DO NOT HAVE THE RIGHT TO VOTE
somehow people around here are against liberal policies UNTIL a so called conservative does it, then it’s a good policy, SOMEHOW. Beats all I’ve ever seen.
It's a strange thing, isn't it? Perry supporters have tried saying the things in his record weren't true; that failed. They've tried saying we are overreacting; that failed. And they've tried saying Perry's liberal record doesn't matter because 'he's the only one who can beat Obama'. And that has failed also. I think the opposite is true. I remember all too well the disappointment I felt when it became clear that Juan McCain was going to be the Republican nominee. I knew then the Marxist Kenyan would be our next president. Conservatives and Independents won't want Slick-Rick anymore than they wanted Juan McCain. And I find the thought of another 4 years of Obama to be frightful. Perry has to be defeated and I believe his liberal record to be the force that will defeat him.
Nobody has to be saddled with it.
That’s the bottom line
Any one can beat Obama.
It is my belief at this point in time that Perry can “Mop the floor with him”
And lo and behold, he is, by double digits.
Why do you Perry apologists advocate for the man only to lash out at other posters who allude to his record? If his record was as great as you say it is you should be happy that we bring it up. That you are not speaks volumes.
Thanks for the affirmation.
It’s because YOU are full of ****
You try governing a 25 MILLION POPULATION WITH 1250 MI OF BORDER.
Perry has been reasonable and strong.
He’s been in the race a very short time. Let his liberal record get national attention then we’ll see where his numbers are.
He has been governing for a decade, and the state is out performing the nation
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.