According to CBS News, conservative and tea party activists urged the Texas House Ways and Means Committee to abolish the property tax in the state and curb the power of school districts to take on debt.
Texas Public Policy Foundation proposes tax reform
The Texas Public Policy Foundation proposed 10 reforms to the Texas House Ways and Means Committee:
* Make the small business franchise tax exemption permanent.
* Require any rate increase in the revised franchise tax (or margin tax) to be approved by a supermajority vote of each house of the legislature.
* Eliminate the property tax and replace the "lost" revenues with an expanded sales tax.
* If complete abolition is impossible, eliminate school maintenance and operations property taxes.
* Eliminate Texas' sales tax holidays and lower the sales tax rate to make this revenue neutral.
* Require a supermajority to approve any new state taxes or increases in the rate of existing taxes.
* Dedicate the use of certain motor fuels tax revenues for mobility-only projects.
* Eliminate the "tax on a tax" application of the sales tax to taxes and fees on a telephone bill.
* Eliminate taxes on production goods that are used to deliver consumer telecommunications service.
* Limit the growth of state and local government spending through an improved tax and expenditure limit.
Why should the property tax be eliminated?
Texas Public Policy Foundation suggests the property tax is a huge burden on homeowners and businesses. A reformed and expanded sales tax would lift that burden and spur economic growth, the Foundation contends.
Debra Medina calls for elimination of property tax
According to the Fort Worth Star Telegram, Debra Medina, who had challenged Gov. Rick Perry and Sen. Kay Bailey Hutchison for the governorship in 2010, also called for the elimination of the state property tax. Her approach was to argue that ownership of property is a bedrock of a prosperous society and that a property tax was a barrier to that ownership.
Property tax controversial in Texas
Since school districts in Texas are financed largely through property taxes and since some districts are poorer than others, the way those taxes are collected and distributed is the subject of controversy. The so-called "Robin Hood Plan" that required some wealthier districts to relinquish revenues to poorer ones remains a bone of contention, as it is in Dallas as reported by the Dallas Morning News.
Objections to eliminating the property tax
The CBS News piece mentioned an objection by Rep. John Otto, R-Dayton, to the elimination of the property tax. Otto suggested a property tax was a more stable source of revenue than a sales tax as sales tax revenues tend to diminish during economic down turns.
Texas resident Mark Whittington writes about state issues for the Yahoo! Contributor Network.
