Texas political leadership is caving to a tax hike.
In a joint statement, Governor Greg Abbot, Lieutenant Governor Dan Patrick, and House Speaker Dennis Bonnen announced their support for a sales tax increase.
But the catch is that lawmakers have to agree to limit future local property tax increases.
The proposal plans on raising the sales tax from 6.25 percent to 7.25 percent, provided that property tax relief bill SB 2 passes both chambers of the Texas Legislature.
The leaders laid out the specifics:
Today we are introducing a sales tax proposal to buy down property tax rates for all Texas homeowners and businesses, once Senate Bill 2 or House Bill 2 is agreed to and passed by both Chambers. If the one-cent increase in the sales tax passes, it will result in billions of dollars in revenue to help drive down property taxes in the short and long term.
Democrats will likely oppose this sales tax increase because of the regressive nature of the tax which tends to fall harder on their lower-income constituents.
However, this is more of a long-term ploy in Texas Democrat’s quest to bring the federal government’s income tax system to Texas.
Democrats will likely capitalize on the current property tax system’s unpopularity to advance their own schemes.
Nevertheless, certain conservative analysts believe that Texas Republican leadership’s proposal is nothing to write home about either.
Grover Norquist views this tax hike as misguided:
Such a tax swap would result in a harmful net tax hike at a time when the state already has a budget surplus. At a time when states around the country are taking action to make their tax codes less burdensome and more conducive to growth, raising state taxes will hinder Texas’s ability to compete for jobs and investment.
Brandon Waltens of Texas Scorecard highlighted how Texas’s increasing property tax burden is putting it on par with numerous blue states when it comes to property taxes:
Texas’ skyrocketing property tax rates are no secret. A recent article by the Wall Street Journal’s real estate magazine placed Texas third in average property tax burden, behind only New Jersey and Illinois.
Instead, Waltens believes that Texas should take advantage of its budget surplus in order to give Texans property tax relief:
Lawmakers seeking to provide meaningful and lasting property tax relief would be better served dedicating the state’s surplus revenue to property tax relief and passing legislation to allow voters the opportunity to reign in increased taxes by cities, counties, school districts, and other local taxing entities.
This is not the first time that Texas leadership has dropped the ball on issues that grassroots conservatives hold dearly.
BLP reported this week how Texas leadership recently killed a Constitutional Carry bill simply because an activist decided to peacefully block walk in House Speaker Dennis Bonne’s district.
For Texas Republican leaders, preserving the status quo seems to be their preferred course of action.
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