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Rick Perry and the Largest Tax Hike In Texas
thenewamerican.com ^ | 8/23/11 | Kelly Holt

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.


TOPICS: News/Current Events
KEYWORDS: 4trolls; perry; perrybashers; ricardoperon; rickperry; rinoperry; taxes; texas; tx
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To: smokingfrog
That was a poorly thought out tax bill.

There's alot of other things about Perry's decision making that's poorly thought out.

TTC
Gardasil
Support of La Raza
Texas DREAM Act
Establishment of Corporate Welfare Programs (ETF/TEF)

At best, Perry is a blundering fool rubbing elbows with cronies while wasting Texan's tax money in the process. At worst, he's a big governemnt statist liberal republican with an election primary timed innoculation of conservative rhetoric designed to mask his true condition from conservative voters.

Will the real Rick Perry please show himself? Not until it's too late (again). See 2000, 2004, 2008 for a historical perspective of GOP Perry's coming attractions.

181 posted on 08/25/2011 5:15:23 AM PDT by TADSLOS (Free Republic- Still AAA++ rated)
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To: caww

I live in America. I support the First Amendment. Obviously you don’t.

Have a nice day!


182 posted on 08/25/2011 5:23:53 AM PDT by GatorGirl (Herman Cain 2012)
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To: dragnet2

It’s a good thing Ronald Reagan ran in 1980 instead of 2012. Obviously, after being a democrat most of his life and a union boss, he would have been ripped to shreds by internet purists.

Perry isn’t perfect but I’m not a purist. I think a Perry/Kasich ticket would have the best chance of getting a 60 seat majority in the senate and increasing the Republican majority in the house. No Republican president is going to change Washington much without 60 votes in the senate.


183 posted on 08/25/2011 5:27:00 AM PDT by sforkjoe57 (How much longer must Americans be slaves to the stupidity of John Maynard Keynes?)
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To: Marie

The TX legislature put a cap on raising property taxes so they had to make up for the loss by taxing business. They’re going to get their $$ one way or the other it seems.


184 posted on 08/25/2011 5:49:01 AM PDT by smokingfrog ( sleep with one eye open ( <o> ---)
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To: TexMom7

Perry realizes that he was wrong NOW, but he sure didn’t at the time. He held a press conference after it was all over where he surrounded himself with cancer survivors and blasted his critics.

http://thefreedombulletin.com/?s=gardasil

You have to understand why this issue and the TTC bothers so many of us so much. There are two issues (among many) that lay at the heart of conservationism that are not up for debate: Parental rights and property rights. Gardasil and the TTC debacle stomped on both of these fundamental principles in a big way.

If he was willing to do these things, what else is he willing to do? What other fundamental principle is he willing to stomp on?

What I’m seeing are a lot of optimistic conservatives that brush off these serious violations because they simply hate Obama so much. They just want the current administration’s crap to end and aren’t too concerned about how it happens.

I want it to end, too. But I want it to REALLY end. With a conservative majority in both houses and a solid conservative at the helm.

These are serious questions that shouldn’t be swept under the rug. I get why people like Perry. There are a lot of things that I like about him, too. But I don’t think he’s an honest conservative. An honest person cannot ignore these offenses even though we wish they weren’t there.

The time to vet these candidates is NOW. If we decide that, after a critical and detached examination of every candidate, that Perry is the best of the lot (not perfect, but the best that we’ve got) - then we support him 100%.

After the convention, when we have decided on our candidate, the time for arguing and debating will be over. Then it’s all hands on deck to defeat Obama.

But right now is when we need to by hypercritical. Right now we need to be mature enough to plow through these discussions with a serious mind and find the BEST person for this country, not just the one that has the best image.

Perry has a lot going for him and the State of Texas is a huge testament, especially during this horrible recession. But we must look at our favored candidate’s flaws. All of them. Don’t give any of these people a pass on anything.

If we find the *best* person that we have to offer, we will win. An honest conservative can and will win in 2012.


185 posted on 08/25/2011 5:52:11 AM PDT by Marie (I agree with everything that Rick Perry is saying. I just wish that *he* did. (NO to Bush II))
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To: caww

They don’t care. They aren’t going to care no matter how much evidence you give them. All they seem interested in is having a president from Texas. So be it. It only means we need to have a better alternative...
When faced with the truth, they go away then come back on another thread with the same questions, the same responses, and act like they are blind. Can’t fix that, so I guess we overcome it.
The insults and namecalling is nasty and I’m not gonna join in with that crap. The truth is what it is. If they don’t care, nothing we say or do will make them care. There are four full threads on this subject, so to say they are uninformed is just nonsense. When faced with evidence, they deliberately misconstrue, misattribute, confuse, and obfuscate...and STILL call you a liar. Why even bother? It’s like banging your head on a brick wall.


186 posted on 08/25/2011 6:17:59 AM PDT by MestaMachine (If the truth hurts, prepare yourself for a LOT of pain.)
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To: fabian

Yes, I can’t complain about our business tax. Property taxes (school especially) is another matter.


187 posted on 08/25/2011 6:21:09 AM PDT by Texan
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To: dragnet2
The article has it right on the business tax. It's essentially an income tax for businesses. It passed because, as always voters are always in favor of taxing the other guy, not realizing that businesses don't really pay taxes. The people who buy their products/services do.
188 posted on 08/25/2011 6:44:00 AM PDT by zeugma (Those of us who work for a living are outnumbered by those who vote for a living.)
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To: Texan

Yes, that is not good and is common in many states. There simply should never be a property tax as we should never have to pay the government in order to keep our homes...so wrong! If we had all private and religious schools, there would be no need....we have allowed the socialization of our education system and that is exactly how the communist designed it to be.


189 posted on 08/25/2011 7:27:26 AM PDT by fabian (" And a new day will dawn for those who stand long, and the forests will echo with laughter")
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To: caww
I'm quite familiar with the Islamic threat, thanks. I've spent more time living in Iraq than you have on FR. And Afghanistan, come to think of it. I'm sure you're one of those hard guys that thinks everything short of a JDAM through every Muslim roof is a soft sell. All due respect to your keyboard honed combat skills, but the military routinely makes nice with every Muslim group willing to play ball, and turns them on those that don't. Some groups you can befriend and use, others you can't, and wouldn't want to.

Sunni and Shia are basically the same 1.5 billion strong religion, with a difference of opinion on the role of those who are physically descended from the prophet Muhammad. Ismailis are a minor offshoot of about 15 million who are basically peaceniks. They are not accepted by either main group because Muhammad commands them to conquer and kill., not pray quietly. That's not a slight difference of opinion.

As for CAIR, they haven't *said* anything of note about Perry, so there's nothing to soft sell. You, on the other hand, are trying your best to drum up panic over a laughable community outreach deal that any politician will do with any large enough group of constituents.

The more light you shed on this issue, the less traction it will get. I was concerned myself, until I read what the actual issue was, and how absurd it is.

190 posted on 08/25/2011 9:52:05 AM PDT by Steel Wolf ("Few men desire liberty; most men wish only for a just master." - Gaius Sallustius Crispus)
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To: SoConPubbie
Perry signed a Hate-Crimes Law basically promoting the Homosexual agenda by so doing.

Basically, huh? Since you made the accusation, how is Perry promoting homosexuality?

Perry is against E-Verify

Perry doesn't believe that it's effective. I don't know enough about the topic to get into great detail about it. I just have to question the effectiveness of a Dept. Homeland Security run program.

Perry is against a Border Wall

Again, this is an issue of effectiveness to Perry. A wall alone will not solve a problem. It will be crossed or dug under. Take a look at San Diego and you'll see the elaborate tunnels that have been created. This is a very difficult issue.

Perry is against AZ1070

Perry's not the governor of Arizona. He said that the bill as written was not right for Texas. But he did say he supports Arizona's right to protect its citizens.

Perry is against every single effective method of controlling Illegal Immigration

He has repeatedly called on the federal government to do its duty to protect the United States against foreign borders. He has also directed state money and the state national guard to the border in order to help with the problem.

Perry push through the Nanny-State Guardisil Bill

It was an executive order where you didn't have to take the shot if you didn't want to.

Perry attempted to push through the Big-Government Trans-Texas Corridor bill which included confiscating using Eminent Domain hundreds of thousands of Acres of land privately owned by the citizens of Texas

How in the world do you think every major road has been built? People can either grant a ROW, with an agreed contract with the state or go to court. Either way, the landowners are paid. Perry can't just waive a wand and, voila, the land belongs to the State of Texas. There's a process, with it very likely being settled with a ROW deed being granted by the land owner.

191 posted on 08/25/2011 10:11:18 AM PDT by GOPyouth ("We're buying shrimp, guys. Come on." - Dear Leader)
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To: dragnet2

Unfortunately, the people of Texas passed this thing in a State wide election. However, I do believe it’s better than a frank income tax and it did answer the court order.

There is are deductions, that change that problem for businesses with a loss. And local school district property taxes went down - where locals didn’t vote to move it as high as possible.


192 posted on 08/25/2011 10:21:36 AM PDT by hocndoc (http://WingRight.org)(I've got a mustard seed and I'm not afraid to use it.)(RIAing))
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To: zeugma
The article has it right on the business tax. It's essentially an income tax for businesses. It passed because, as always voters are always in favor of taxing the other guy, not realizing that businesses don't really pay taxes. The people who buy their products/services do.

Yep...

193 posted on 08/25/2011 11:14:07 AM PDT by dragnet2 (Diversion and evasion are tools of deceit)
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To: sforkjoe57
>>>>>>It’s a good thing Ronald Reagan ran in 1980 instead of 2012. Obviously, after being a democrat most of his life and a union boss, he would have been ripped to shreds by internet purists.

Actually, Reagan was attacked in his first two serious runs for potus. In 1976 Reagan took on Pres Ford and was lambasted as a hardcore rightwinger and a political cowboy by the Rockefeller Republicans. At the same time the hardcore rightwingers called him a sellout for choosing Richard Schweiker as his running mate. In 1980, some of the same hardcore rightwingers blasted Reagan for his choice of GHW Bush for VP.

Nothing new for Reagan. He was criticized and attacked by the left and the right during his entire political career.

After he was elected President in 1980, Libertarians like Ron Paul, Murry Rothbard and others rejected Reagan. Paul called Reagan a "dramatic failure" as President. Rothbard called Reagan a "cretin".

There have always been purists in the GOP and loudmouth know-nothings. Best to ignore them. Republican primary voters will choose the best man or woman to take on Obama. Hopefully they won't be swayed by the liberal media this time around. Getting stuck with Romney as the nominee would be the worst of all. Willard was a loser in 2008 and he'd be a losing proposition once again.

194 posted on 08/25/2011 11:37:25 AM PDT by Reagan Man ("In this present crisis, government is not the solution to our problem; government is the problem.")
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To: mylife

Of course nobody has to be saddled with it. Thanks to the TX state legislature..... a real conservative never would have mandated it in the first place.... period. The fact that Perry keeps having to be slapped down after governing for 12 years PROVES he is no conservative.....


195 posted on 08/25/2011 12:55:51 PM PDT by DrewsMum ("I abandoned free market principles to save the free market." -GWBush)
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To: DrewsMum
Of course nobody has to be saddled with it. Thanks to the TX state legislature.

Nobody had to be saddled with it in the first place due to not having to take it if you didn't want to take it.

196 posted on 08/25/2011 4:06:56 PM PDT by GOPyouth ("We're buying shrimp, guys. Come on." - Dear Leader)
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To: GOPyouth

Not so..... You had to get approval from the government to “opt out” and besides, what’s the point of the mandate if there’s an opt out clause? Oh, = know.... to drum up business for a campaign donor....as it would have meant insurance companies would have to pay for the vaccine then. Nice to be in bed with a governor who will force others to buy your product......


197 posted on 08/26/2011 10:51:29 AM PDT by DrewsMum ("I abandoned free market principles to save the free market." -GWBush)
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To: DrewsMum; RED SOUTH

Red South never answered this direct question yesterday, so maybe you will. How big of a campaign donor was Merck, the manufacturer of Gardasil? I’ve heard Perry got just $6,000 from them. Is that what you all are saying is the basis for Perry’s decision to mandate the vaccine, a mere $6,000?


198 posted on 08/26/2011 11:01:51 AM PDT by DTxAg
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To: Steel Wolf

Visiting a Middle Eastern country? a specialist in it’s affairs does not one make. Though some might actually think it does. If it did all our troops would surely be considered such. Yet even they have to be taught and made clear about the Islamic agenda and the people they are among....some accept, others do not, and some in between.

I’m all to familiar with Shia and Sunni, as well as Ismailis. All three use the Koran as their point of reference and all three believe Mohammed is their Prophet.

Additionally there are many off beat Islamic groups besides these three.....but they all have in common their adhereance to the Koran and it’s teachings...and that Mohammed is their Prophet.

So when push comes to shove....and it will come to that...they will all stand together as their history does attest to....time and time again.... Equally as much their own Imams will attest to this.

Furthermore, if you stay current on their reltaioships you will see there has been an acceptance of the Islmailis Group despite some of their differences which remain.

I’ve already posted CAIR’s direct quotes from reliable sources that indeed CAIR is supportive of Perry and boasts the Muslim community is as well....additionally others on FR have as well. So saying Cair hasn’t said anything about Perry is not true.<p


199 posted on 08/26/2011 2:37:25 PM PDT by caww
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To: Marie

This is the source I used. I am sorry you had troubles.

If you are wary of Perry - don’t vote for him.

We can agree to disagree. I personally think Perry did this because he genuinely thought it would help girls and that is it. What other motive would he have?
He has admitted that he made a mistake regarding this recently.

http://www.vaclib.org/exempt/texas.htm#schools

§ 42.043(d)(2) is the exemption code.

§ 42.043. RULES FOR IMMUNIZATIONS.
(d) No immunization may be required for admission to a facility regulated under this chapter if a person applying for a child’s admission submits one of the following affidavits:
(1) an affidavit signed by a licensed physician stating that the immunization poses a significant risk to the health and well-being of the child or a member of the child’s family or household; or
(2) an affidavit signed by the child’s parent or guardian stating that

the applicant declines immunization for reasons of

conscience,

including a religious belief.

(d-1) An affidavit submitted under Section (d)(2) must be on a form described by Section 161.0041, Health and Safety Code, and must be submitted not later than the 90th day after the date the affidavit is notarized.


200 posted on 08/26/2011 3:16:24 PM PDT by TexMom7
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