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.
The Dallas Morning News and the Houston Chronicle??? These are two big-time liberal rags. I am a business owner in Texas and have seen no tax increases. With that said, I would like to know the truth on this. (Truth will never be found in the DMN and HC.)
Like I said, if his record was all that talking about it shouldn't cause you to attack me the way you have. But you did, and that speaks volumes.
Thanks again for the affirmation.
btw...pro-open borders is not 'reasonable'. Pro-ILLEGAL alien is not 'reasonable'. Pro-amnesty is not 'reasonable'. Unless, of course one was to run as a liberal Democrat.
Perry is not reasonable nor is he strong. He's a RINO with a record he cannot escape. lol!
I never said he couldn’t govern. But he governs like a liberal. Unless you think pandering to ILLEGAL aliens is admirable. I don’t.
Nope, not gonna cry - it demonstrates the level of discourse I have come to expect from many Palin supporters. Just pointing it out, is all.
And the way Palin supporters get anyone with a negative comment kicked off Palin threads, I don’t think the Perry supporters are the ones with the thin skins...
You know what bugs me?
Ca is coming here in droves, and we are entertaining them.
It’s only a matter of time till the liberal disease spreads to Tx.
But Perry has done a descent job.
Better than Ahhnie or Blowbama.
Many Texans support Rick Perry. Are you going to make up the financial loss to FR when Texans have had enough of your talking trash about us, our state, and our governor? Stick to the issues, the candidates, and their records and stop trashing the supporters themselves before your mouth costs FR significant financial support every month. That's not a threat. It's a distinct possibility. I've heard from many Texans who have just about reached that point. There's no reason for the vitriol.
Well said. The libs know that if they divide us and get us fighting among ourselves, our guys eliminate themselves and their guy gets re-elected. They picked our candidate in '08 and they want to do it again.
The anti-Perry article is how they knock our strongest opponent to zero off. After that, they go after the weaker candidates until all we are left with is a choice between Ron Paul or Tim Pawlenty. Is that what we want!!???
This has ALWAYS been Texico.
It’s just the way it has been down here.
Perry as an intelligent man is supposed to ignore this constituency?
Believe me.
His caving on gardisil while passing Voter ID, should tell you who he is.
I think he just lost my vote...
It’s not what I want. It seems to be what some want. Some want to see Perry supporters leave FR.
Uh yep.
You're clueless. Texans are tougher than you give them credit for. I talk about Perry because that's what we do here -- we discuss politics and we discuss candidates. Perry is a RINO and his record proves it. You can disagree but you can't say I have ever said anything about Texans w/o lying.
As for the vitriol --I post Perry's record. The vitriol comes from people like you who cannot stand to see someone question RINO Rick attack the messenger instead of the message. A look at my posting history will reveal that I respond with the same level of respect given to me. You want less vitriol try not directing the same at those who haven't been fooled by RINO Rick.
Yep
So there is no income tax...and is your business tax low?
...oh really now...and have Perry bring along his Islamic friends..no thank you!!!! We already have that with Obama at the helm...we don't need another one willing to bring more of them in ... as Perry's obviously done in his state. Nope...will not vote for someone who hasn't a clue of the Islamic threat...rather caters to them and and salutes them as Perry's done.
What's the matter with people's heads! If our country isn't secure none of the other issues will make a difference!....Close the dang Borders!!!!!! And no more Rhino's!
Just who are his islamic pals?
What freepin joke!
Perry is a secret jihadist.
Yes, Yes, That’s certainly the facts /s
Getting to be more than annoying seeing the push on these threads for Perry, but they won’t consider looking at issues concerning him that deeply trouble others...rather we’re just telling lies....terrible!
It’s one thing to disguss Perry’s record and the like...it’s another thing to see a bonifide political push for him....and in ‘Palin Territory” no less.
Voter ID was good, I'll give him that. It's those pesky pro-open borders/pro-ILLEGAL alien, Gardasil things that I just can't seem to get past.
And he didn't 'cave' on Gardasil; if you think so you are grossly misinformed. He was defeated by the Texas legislature when it passed HB 1098. And Perry didn't let it go easily.
On May 8, the day the law [HB 1098] went into effect, Perry held a press conference surrounded by women touched by cervical cancer. He bemoaned the tenor of a debate that he asserted had been "hijacked by politics and posturing," and blamed future cervical cancer deaths on those who opposed his mandate -- many of whom were fellow Republicans.
In a grand flourish, Perry thanked the small minority of legislators who sided with him: "They will never have to think twice about whether they did the right thing. No lost lives will occupy the confines of their conscience, sacrificed on the altar of political expediency."
source
That's not caving. That's being a sore loser.
You can’t close the borders.
We do a pretty good job here considering that people in Minnesota whine but wont give us a dime to over 1250 mi of border
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