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.
But Mrs Perry thought they were Texas oranges. So she put em through the
juicer with Rick's morning orange juice. Needless to say, Rick was PO'ed.
Heck, a "habanero haze" can last all day.
Rick in a "habanero haze."
Habaneros are the hottest species of peppers....common in the Mexican diet.
How'dja like a pile of them in your orange juice?
I never said he was a Tea party guy.
He is a governor.
Something a lot of neophyte tea party congressmen don’t understand yet.
I love the tea party.
I really do, but we need to get our foot in the door in the executive office, the senate and the legislative.
Perry has been very active in judicial wars for a hick.
We now have “voter ID” and “Loser pays”
Our gun laws get better by the day.
A lot of this stuff took 6 years or more to get to fruition, but Perry just kept working them till he had a majority
Really? On a conservative forum you stoop to DU level? No, I don’t think even the DU trolls would be so childish...
Finally, we hear some facts straight from someone on the front lines. Thanks.
Don't forget that we're "purists" and want a "100% perfect candidate" when we criticize Perry's mediocre record. (quickly followed by them contracting themselves and stating Sarah Palin's endorsements are perfect and infallible proof that Rick Perry is the second coming of Reagan)
I beat that point because I do not believe it is moot.
On what, if not his record, do we judge the man? The fact is, had the Texas legislature not passed H.B. 1098 to override Perry's EO the nanny-state vaccination requirement would be law. You may be willing to overlook that but I think it speaks volumes about the man.
Perry bypassed the will of the people of Texas and the entire legislature. He now calls it a ‘mistake’ but then he has to…after all, conservative Republicans wouldn’t vote for a nanny-state liberal, would they now?
If Obama had done this every conservative here would be 100% against it. But it wasn't liberal Obama, it was a man claiming to be a conservative and I don’t find that point moot.
The Polls say Perry is beating all of them like a drum.
He is double digits ahead.
But you are right. This is the EARLY primary
Not the National General election.
Seriously, I think you will have difficulty’s running a purist in the national general election.
Perry is very well positioned at this point.
Furthermore, it sent a message to young women that we expected them to have sex before they were married.
All of the above is true and none of the above is what a conservative would do.
It never happened!
Evangelicals in Tx raised a stank and Perry said OK, I will respect your point of view.
Geez he is a the suckyest suck to ever suck!/s
Note: this just reflects state spending, not state and local, as some have tried to do with Perry.
How do you feel about polio vaccines?
Yup. I remember it.
Probably because you and the rest of the Perry Apologists are always telling everyone how much of a Tea-Party Conservative Rick Perry is, how conservative he is.
Pro-Life? Check
Pro-2nd Amendment? Check
Pro-10th Amendment? Check
Proud to be a Christian? Check
Wants Obamacare repealed? Check
Joined the legal fight against Obamacare? Check
Wants less federal regulations? Check
Wants lower federal taxes? Check
Pro-domestic drilling? Check
Demands the the federal government do its constitutional duty of protecting the border? Check
Supports a business to operate in which ever state it wants? Check
Pro-tort reform? Check
Supports cut/cap/balance? Check
Being part of the previous issue but bears repeating, supports a balanced budged amendment? Check
Wants less federal government in our lives? Check
Supports having an ID to vote? Check
Endorsed by Palin? Check
Pro-Military? Check
Has Obama scared to death? Check
But yeah, I can see where you think Perry's a RINO.
In other news, Texans made it clear last Spring and last November that they didn't care about this fake outrage regarding Guardisil. I'll go out on a limb and say that national conservatives won't care, either. I just hope that certain supporters of other certain candidates don't go apoplectic when said candidates endorse said Perry.
The HUGE difference between Perry and Obama is that Perry listens to his constituents.
Obama gives them the finger on his way to Martha’s Island.
So because of some Texas -okyhomes rivalry you see fit to denegrate a big bunch of conservatives? Step on down a bit south and find out what Don’t Mess With Texas, really means.
How?
Its a mandatory vaccine.
So this whole hoopla is about some tight ass idiots being offended that Perry was implying that their daughters are sluts?
I dont understand you people.
Bingo. You nailed it. For REAL conservatives, it’s actions & policies that matter.....for hypocrite RINO lovers, it’s WHO’S doing the action. LIBERAL/COMMUNIST policies don’t work & are a death nail to our country whether it’s Bush, McCain, Graham, Romney, Obama, Clinton, Soros or PERRY pushing them.....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 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.That is the so called "Fairtax" in a nutshell.
The Fairtax requires retail and service businesses (other businesses are exempt) to pay "23% of the gross payments" to the feds...every month - no deductions, period.
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