The Property-Tax Problem

By and Comments

Glenn Hegar, the Republican nominee for comptroller, wants to eliminate property taxes. He is among a number of Republicans who have sounded an alarm about the subject, and called for them to be reduced if not eliminated. The main argument is that Texas’s average property tax burden is too high. But it also has an ideological dimension: If a homeowner has to pay property taxes, does he or she really own his own home? I don’t have any problem saying yes, but apparently others do. Is eliminating property taxes a good idea? The general theory of taxation is that it should be a three-legged stool, encompassing income taxes, sales taxes, and property taxes. As it stands, Texas doesn’t have a personal income tax, and the majority of the state’s general revenue comes from sales tax receipts. The problem with eliminating the leg of the stool that represents property taxes is that property taxes are the primary source of income for local governments — school districts and municipalities. Take away property taxes, in other words, and you leave a gaping hole for the funding of local government. Where are municipalities going to find the revenue to build local infrastructure, or to fund critical services such as fire and police? That’s the issue. 

Mike Collier, the Democratic nominee for comptroller, has come out swinging at Hegar over this, arguing that if Texas eliminates property taxes, it would have to make up the revenue by hiking sales taxes to 20% or more. The state sales taxes would be counted as state revenue, meaning that the Lege would have to distribute the money back to local governments. Texas’s average property taxes are quite high. But if we want to eliminate them and don’t want to make drastic cuts to state and local spending, we would have to make up the difference by dramatically raising the sales tax. That would, in theory, give Texas taxpayers the highest consumption tax of any state. Taxpayers wouldn’t enjoy that either.

( AP Image by Eric Gay )

Related Content

  • SpeakTruth

    This is a bone-headed proposal, a political ploy in the political season. It’s poor public policy, a regressive shift of tax burden, undermines local governments. No thanks. When do the adults show up?

    • TopTaciturn

      When do the adults show up? They don’t. There are only capriciouis brats a’hankerin’ for more.

  • http://www.fortbendconservative.org/ John Bernard Books

    This is Texas not Taxus.

    • Blue Dogs

      Texans prefer to have LOWER taxes and smaller government.

      • SpeakTruth

        Texans prefer to have local governments that work. When you call 911 to report that your house in on fire, you want someone to show up quickly and equiped with more than a garden hose.

        • http://www.fortbendconservative.org/ John Bernard Books

          That’s why we have volunteer fire departments.

          • SpeakTruth

            I seriously doubt we would continue to draw national and international real estate investment in our metropolitan areas if we had only volunteer fire departments. Would you office in a high-rise in downtown Houston knowing that it was protected by a volunteer fire brigade armed with nothing more than good intentions and some used pails?

          • http://www.fortbendconservative.org/ John Bernard Books

            We have several large volunteer fire departments in Texas, along with paid. The paid fire department you referenced is over budget and in the news. http://www.houstonchronicle.com/news/houston-texas/houston/article/Overtime-crippling-HFD-budget-5217868.php

      • http://www.fortbendconservative.org/ John Bernard Books

        Why would anyone let a bureaucrat convince them they need a million dollar scoreboard for a high school foot ball game? Why does Dallas, Houston and San Antonio need multiple sports stadiums? I know marxists have never met a tax they didn’t love, but how hard is it to cut the frivolous spending?

        • SpeakTruth

          Funny, but when I look at the local school districts that are building obscene sports stadiums and such, they are all in property-rich, heavily Republican areas. Plano, Katy, etc. Compare that to the South Texas district in the news recently that is literally just trying to keep the water on. So perhaps you should talk to your Republican brethren about their Marxist ways.

          • Beerman

            Very good point……

          • http://www.fortbendconservative.org/ John Bernard Books

            republicans are running the school districts? Just how stupid are you?

          • http://xeric-front-yard.tumblr.com/ Tim Thomas

            It’s not worth arguing with JBB. He’s convinced Democrats run the state and make all decisions here.

          • WUSRPH

            He also has this thing about voters making decisions he doesn’t approve of–like to approve bond issues to fund score boards and $60 million stadiums. Stupid maybe, but the voters have a right to be stupid sometime….as shown by who they have been electing in Texas recently.

          • http://www.fortbendconservative.org/ John Bernard Books

            I’m amazed you forgot to mention President Obama…

          • http://www.fortbendconservative.org/ John Bernard Books

            Republicans do run the state that’s why Texas has some of the lowest tax burdens in the US. It has crept up under Straus’ leadership but it is still a republican ran state. http://www.census.gov/govs/statetax/05staxrank.html

          • vietvet3

            I would think most of the districts outside the inner cities are indeed run by Republicans. That’s where you find the obscene stadiums.

          • Jed

            the marx brothers were big football fans.

    • TopTaciturn

      Touche’! It reminds me of “Lost Wages NV.”

  • Blue Dogs

    Just found out that KBH’s husband passed away.

    • WUSRPH

      In addition to being husband and wife, they share another distinction…that is being the second husband and wife to both be defeated in their party’s primary for governor. He lost to Clements in 1978..and we know what happened to her. The other pair were Pa & Ma.

    • AlmostNormalTexan

      Really sad, especially for their kids to lose their father when they’re only 12 years old or so.

    • vietvet3

      They would have been a very effective duo in the Guv’s office. Reasonable, realistic.

  • WUSRPH

    A little dose of reality might be helpful:

    First, property tax revenues in Texas total over $40 BILLION PER YEAR, with more than half being school district taxes. According to the State Comptroller, the state now takes in about $21.5 Billion in sales tax revenues at a rate of 6.25%. Adding an extra $40 billion to that to replace the existing local property tax would require that the STATE SALES TAX RATE be 23%….And this does not include the 2% LOCAL SALES TAX RATE. When that is added, the statewide rate would be 25%.

    Even if the “replacement” were limited to school property taxes only that would cost over $22 BILLION PER YEAR. According to the State Comptroller raising just that amount would require a STATE SALES TAX RATE of 16%…and with the local rate that would mean that you would be paying an 18% SALES TAX.

    The only possible way to avoid that high of a rate would be to extend the sales tax to food and medicine (which are now exempt) and to virtually every service you can imagine.
    In fact, the REPUBLCIAN State Comptroller did a Tax Equity Study for the last legislature that looked at how much could be raised if ALL the exemption and excluded goods and services–including food and medicines—were taxed. It found that would increase the tax revenues by $37 billion in 2014. That is still $3 billion short of covering the cost of doing away with all property taxes. Even if EVERYTHING WAS TAXED, the state sales tax rate would have to be increased to 7 to 7.5%, up from the current 6.25%, which, when the local 2% is added, gives you a rate of at least 9.25%.

    This suggests this plan, at the best, might cover most of the school district property tax but would still leave local taxpayers paying $18 to $20 billion per year in property taxes PLUS a much bigger and much expanded sales tax.

    Plus it would do absolutely nothing for the 40% of Texas who live in rental properties unless you think their landlords are going to give them a cut in their rent. Dream on!

  • http://xeric-front-yard.tumblr.com/ Tim Thomas

    I think property taxes are getting high enough that no one can claim Texas is a low tax state anymore. It’s not a bone-headed proposal if they include a (low) income tax, and perhaps pickup Debra Medina’s suggestion to tax real estate transactions.I But just eliminating it is indeed foolish.

    Now that redistribution is starting to pick up more and more suburbs and oil rich rural areas I can see a lot of support for a good solution. Need someone to sell it though.

    • SpeakTruth

      Sorry, but I didn’t hear Hegar or any of his R compadres saying that an income tax was part of their proposal. That would be a responsible, reasonable proposal. This isn’t. Of course, that means it may have traction with the clowns that hold every statewide office in our state.

    • WUSRPH

      Two comments:

      First, applying a sales tax to real estate transactions sounds good, but when you convert it to numbers it does not look that good to the average person. For example, just the current 8.25% rate would add over $8,000 to the cost of a $100,000 house. The result would be more people priced out of buying homes. It would probably have a similar effect on commercial and industrial construction. Of course, that would be a one-time cost and not an annual one as with the property tax, but it might still be a real barrier to investing in homes and real estate.

      Second, altho it seems a lot higher, Texas ranks 36th among the 50th states in terms of state and local tax revenues per capita. Our property tax rate is higher, last I heard it was about 12th, but our state taxes are low enough to keep the overall level way below most states.

      P.S. I’m through for the day. You folks have fun.

      • http://xeric-front-yard.tumblr.com/ Tim Thomas

        I think it’s complex. Most of those low income loans are going to already have property taxes going into escrow. Which means if I live in Austin I would pay off that sales tax in less than 5 years of property tax payments. People average a move every 5 years. I have a hunch it would suppress jumbo loans and slow gentrification, but it’s an interesting proposal in any case.

        But ultimately average tax burden is the problem. If you l live in a property rich area you long for another way, and if you live in a property poor one you’ve got a fantastic deal with low bills and recapture handing your schools money.

    • MSM

      Property taxes are high, but if you use the land for agriculture reasons, conservation, ect (actually do something with it) like many of my relatives then you get large tax breaks. My parents wouldn’t be able to own property in Texas if they didn’t farm and raise cattle.

      The people who seem to whine the most about the high property taxes seem to be people who move from other states and just sit on their land. They don’t grow or raise anything. No conservation. And of course, they get no exemption and moan about how unfair it is.

      The smarter ones figure out, oh so if I use the land for something then the property texas aren’t so bad.

      Mainly its wealth out-of-staters and urban folk who seem to groan loudest about property taxes. Because they get dinged since they don’t have enough land to raise cattle on.

      • http://xeric-front-yard.tumblr.com/ Tim Thomas

        I think the main people complaining about property taxes are those in desirable urban and suburban areas. Austin sent $130 million dollars to other school districts, Westlake, Plano, and Highland Park in the area of $50 million. Those are the places that are the most upset about property values. If your house value doubles or triples in value you can be left with a tax bill that dwarfs your house payment.

        I don’t understand people who own large plots and do nothing with it either, but I don’t think they’re a very large constituency.

        • MSM

          But they can have a big influence on the other properties. A friend of mine lives in St. Louis Missouri and there is man there who has spent the past three decades buying up old lots to a point that he has a monopoly on a lot of that area on the city. The problem is that he refuses to develop any of them until he gets the last holdouts. And his lots have been crime-ridden, drug-user infested buildings. Which he leaves alone because that’ll further drive out the remaining property owners to give him a total monopoly. Really gross tactic.

          However, one benefit of high property values in Texas is that there is far, far less incentive for people to do that. (To buy up lands and allow them to become crime-zones in order to drive out the remaining property owners and to drive down the value of those properties so they can snatch it up dirt cheap)

          But to be fair to farmers and conservationists, Texas gives a lot of tax breaks to property owners who use their property.

          Philosophically I don’t agree with the idea of property taxes, but one has to pick your poison. I’d rather have property taxes and sales tax than an income tax. That’s just my preference based on my circumstances.

          With Texas’s geographic diversity it’s no surprise that other Texans will have completely different views on the matter based on their interests.

        • jammerjim

          You are correct about desirable urban areas. My property taxes have nearly doubled in about 7-8 years. People in my area are worried about being forced to move out. And its not the city/schools/county just raising rates; prices are shooting up from people buying.

      • jammerjim

        You don’t actually have to raise cattle or crops.You can get a wildlife exemption and pretty much do nothing with the land except maybe allow some hunting. I think technically you’re supposed to file a periodic report, but at least in some counties the government doesn’t really care. And why should they? Bit of hassle for them and they know the owner will just refile the paperwork. Might be different in more populous areas of the state.

        • MSM

          Well, sorry I didn’t list all the exemptions. The tax code is rather long. But yes, there is a wildlife exemption too. However, you can’t sit on decaying urban buildings like what’s happening in St. Louis.

          Actually, I know the writer of this article hates the political ploy by Hegar and is against the very idea, but I think Hegar is right in that there does need to be a property tax reform in Texas. And even if he’s just doing this to gin up votes, that doesn’t take away from the necessity of talking about this.

          Texas made its tax laws when it had a far more rural population. A lot of exemptions are written in for farmers, conservationists ect.

          But with Texas growing increasingly urban, those laws don’t work in their favor at all. How can someone farm on a little plot of land for a house. And cities have strict rules on livestock. A backyard can’t be a conservation zone.

          I think they should keep what they have in place for rural folk, but consider some reforms when it comes to people living in urban settings. So as you said people aren’t forced out by ridiculous property tax rates.

          So I kinda support Hegar bringing this up (even if its for reasons other than intended) at least it might get people talking about it.

          • WUSRPH

            Take a look at the idea called a “circuit breaker” for property taxes and see what you think about it. It limits the percentage of your income that you can be required to pay in property taxes. More than 16 states have some form of it although most are aimed at senior citizens and the poor. A number say that you can not be required to pay more than 6% of your income in property taxes. It has been looked at here but no one has yet come up with an effective way to implement it. Most of the state’s that have it make it work as a rebate to their income taxes, which we do not have. And, I doubt we would adopt one just to make a circuit breaker work. Look at: http://www.cbpp.org/cms/?fa=view&id=51 for background info.

          • MSM

            Why not write your congressman and bring this discussion to Hegar or those involved with discussing “Property Taxes”. As I said, what I support is not the bill, but a discussion in the Texas legislature on the matter. You make one of many good points in this debate.

            Now I’m still going to be absolutely against an income tax. That said, I’m not for abolishing property taxes. I just think they need to take into account more “urban” situations that did not exist when they were written decades ago in Texas.

            This “circuit-breaker” idea seems like it’s a good place to being on the discussion. I think a lot more could be talked about. Which is why, whatever Hegar’s personal motivations, we wouldn’t be having any of this discussion if he hadn’t brought it up.

            And I think it should be brought up. And maybe his motives are purely political (what politician’s aren’t), but he’s stirring the pot and the reason we’re having a discussion on this at all.

            I hope more things like yours would be brought up to deal with the new realities of property taxes in Texas.

          • WUSRPH

            Actually I think Medina started the talk…He and the others running for Comptroller just jumped on her idea.

          • Lucy Frost

            That sounds like it has some merit. Also, did I hear recently that the state has a budget surplus? Maybe save that for a rainy day (the next downturn) and stop raising taxes overall.

          • WUSRPH

            The State already has what is called “The Rainy Day Fund” and it has more than $4 billion in it now….Expected to be as much as $8 billion by the next time the Legislature meets. It is funded by a portion of the revenues from oil and gas production. There hasn’t been a real state tax increase for a number of years now. The Legislature revised its business tax a few years ago and that was the last time. It hasn’t increased the sales tax or its taxes on oil and gas in more than 20 years.

  • Jed

    how can you possibly report on this story without observing how our tax burden relates to those in other states?

    in your quest for objectivity, you seem to have lost track of reason.

    • John Johnson

      ?????? I think you left us dangling, Jed. What is it you want? A comparison to property taxes in Ohio? All the other states? A list of all the other taxes and fees imposed in each state? How we compare in total tax burden with each state?

      What is this going to tell you? Nothing really. You then have to know how their public schools stack up against each other; their roads; their social services; state employee wages; if they are using billions in dedicated money for things like emergency medical, volunteer fire departments, and state parks that never make it to the intended group.

      How about just concentrating on what we think we can’t live without, what level of service we demand in each of these areas, and how we are going to pay for it without kicking the can down the road.

      Isn’t it best to just work on getting well instead of bragging “We are sick, but not as sick as California”?

    • WUSRPH

      You can find data on how we rank compared to other states thru the U.S. Census Bureau web site or, at least for the Texas rankings, in theTexas Fact Book from the Texas Legislative Council. You might also find data of interest in the Texas Legislative Budget Board’s Fiscal Size-up publication. Section 3 is “Texas among the states” and has a number of rankings. All of these are available on-line.

      • Jed

        yes, but my point is that it is relevant to the reporting.

        talking about ow high property taxes are when the total tax burden is relatively low compared to others states is beside the point at best, and misleading to those (like my interlocutor above) who seem not to know the reality.

  • John Johnson

    You can say you “own”, but once you pay off the mortgage you are still paying, and it can be taken away from you for not paying. It is as it there is a perpetual lien against it. Semantics.

    Taxing districts to benefit developers, tax incentives to lure big business, licensing fees on just about everything, no income tax. Robbing Peter to pay Paul.

    We now have our Big OIl / Big Gas companies petitioning to export crude and our natural gas to the highest worldwide bidder. This will cause almost everything we eat, touch, buy and need to go up in price. It will insure that jobs that went overseas stay overseas.

    Tax hydrocarbon exports. Make India and China pay more than we do here in Texas (and the U.S.). Get rid of the speculating by banks and brokerage houses on crude that Bart Chilton, Bush appointee and Obama holdover to the Commodites Futures Trading Commission, says add between $7 and $14 to each tank of gas we buy (depending on the vehicle we drive). We could raise gas taxes a bunch and it would generate a massive amount of revenue.

    • Beerman

      What is wrong with taxing producers of oil and natural gas to pay for improving the living conditions of Texans from whose earth they are mining such immense wealth? These folks rip all the natural resources from Texas and move on.

      Texas has a long-term budget problem, and we should be taking steps to address those problems in education and infrastructure needs, mainly by increasing revenues.

      Common sense tells us that we will eventually pay a large and completely gratuitous price for the way our legislature has acted over the past several years.

      • WUSRPH

        We do have (fairly low) severance taxes on oil and natural gas but over the year Tom Craddick and others passed a series of bills reducing the tax paid on hard-to-produce oil and gas….(Fracking probably qualifies)…Plus the value of the minerals is taxed in the ground, but, again, it is hard to get a good value. About the only property that is valued really close to its market value is residential real estate since it is easier to do comparisons of sales. Every once in awhile someone comes up with the idea of a “refinery tax” but it dies when Exxon and the boys all say they will move their refineries elsewhere (and people act like they believe them). P.S. You can’t just blame the Legislature for these “special interest” provisions…..ALL of those effecting property taxes required constitutional amendments that were approved by the VOTERS. Hegar’s Horrible idea would also require a constitutional amendment that would have to get a two-thirds vote in both the House and Senate (21 of 31 and 100 of 150 votes, respectively) plus be approved by the voters in a statewide election. It probably would pass if submitted to the voters, but it would not be likely to get the two-thirds in at least one of the two chambers.

  • Farm Boy

    Would it be cynical to mention that the Hegar family are among the largest if not the largest private landowners in Harris County.

    • WUSRPH

      Reminds me of the old story about a state senator from Pennsylvania, I believe, who was once asked whether he had a conflict of interest if he voted for a bill that just might put a few bucks in his pocket. “Conflict of interest? What do you mean, conflict of interest?,” he was said to have responded,” It doesn’t conflict with my interest.”

    • Johann

      How large?

  • WUSRPH

    If anyone wants to be serious about this issue you might take a look at a research study published by the Real Estate Center at Texas A&M. It can be found at http://recenter.tamu.edu/pdf/2037.pdf. No one will agree with all of it. I know I don’t, but it will serve as a good basis for an informed discussion.

  • Wilson James

    Pure foolishness.

  • WUSRPH

    Another point…At least 51% of the tax relief would go to business.

  • Jorge

    Prediction. Collier will be a credible candidate—-with great ideas. He’s actually qualified for this important position. Past Comptrollers have been underqualified and just flat wrong. Once the press and public understand, this will be an interesting race.

    • WUSRPH

      He has all the knowledge and skills required for the job. The question is can he raise enough money to get his message to enough voters and do enough voters care anyway.

  • Aaron Smith

    Double bone headed proposal and voters are against it. Hegar clearly has his head up his ass and is listening to people he should not.

  • Beerman

    Typical election agenda from extreme right, “hooray for free enterprise and low taxes, with the details to be determined later.”

    • MSM

      Yes because leftist have never done that. *rolls eyes*.

      I’m against getting rid of property taxes, but the matter should be discussed. Hegar has the right to bring the matter up. And I doubt it’ll pass. But alternatives should be discussed.

      And even if it’s a political ploy, I see so MANY politicians doing that all the time left and right that’s its ridiculous to point a finger. Harry Reid and Obama do it all the time.

      Heck, a bill for allowing medical marijuana is likely to come up next session. It won’t pass, but the matter should be discussed. We shouldn’t freak out and scream, “NOOOOOOOOOOO!” every time a new idea is suggested.

      But discuss it’s feasibility.

      • Gunslinger

        I mostly agree with you. Except, the difference between this issue and an ill-fated marijuana bill is that it’s unlikely Hegar will bring this up after the election or push for it during session.

        It’s less about Hegar wanting to discuss the feasibility of eliminating property taxes with the legislature and more about making voters believe he’ll single-handedly eliminate their property taxes.

        • MSM

          That could be. But if he doesn’t actually make a reasonable case than it won’t even make it out of committee. Plenty of established republicans will not want this brought to the floor as it’ll look bad to vote against it. So they’ll just silently kill it in committee.

          The only it’d get out is IF Hegar brought a real discussion. If it’s just a political ploy then it won’t get very far.

          • Gunslinger

            Here again I agree with you. And Hegar’s smart enough to know that most Rs don’t want to vote on that bill. But the thing is Hegar doesn’t actually WANT to make a reasonable case…or any case for that matter. So he won’t. I mean, if this is an issue he’s so interested in, why didn’t he introduce that bill already? You know, when he was in the Senate and could do such things himself?

            Because he’s not as interested in making government better as he is in winning an election by throwing out ridiculous ideas to the rubes who buy it and vote for him.

          • MSM

            I guess my problem is this sounds too much reaction to what everyone has assumed is the truth. Now is it likely that Hegar is doing that as a political ploy? Probably yes.

            But he should be given the right to prove otherwise. Besides if it’s what his constituents want, then so be it.

            Most politicians do outrageous political ploys. Did you see those democrats who got arrested in DC a few months back? That was so obviously political.

            But let’s just give Hegar a chance to play this out before we judge him. (Though the initial assumption is likely correct.) I just think everyone deserves a chance to screw up.

  • Just a guy

    If the wealthiest pay the largest amount of property taxes, and property taxes are replaced by increased sales taxes, aren’t basically the same people still bearing the lion’s share of the tax burden?

    • MSM

      Income taxes hit workers more. Wealthy people like Zuckerberg or Soros don’t have incomes. They have wealth and stocks so they have no income to tax. So the middle-class hurts the most with income taxes.

      Property taxes hit corporations more (because it’s the company paying for the building and the property).

      In Texas there are big tax breaks out there for farmers and people who use their land for agriculture and conservation. So this eases the burden considerably for middle-class farmers (the tax is still hard on my relatives to pay, but they manage thanks to those tax breaks).

      • Jed

        nope.
        wrong on first two paragraphs.
        hint1: what is it that made zuckerburg wealthy? inheritance? no? then the other option is income.
        hint2: who pays property tax on rental property?

        • http://xeric-front-yard.tumblr.com/ Tim Thomas

          1) http://www.washingtonpost.com/blogs/on-leadership/wp/2014/04/03/mark-zuckerberg-joins-the-1-salary-club/
          2) The renters pay the landlord who pays the bill. Are you asking who provides the money to pay the bill or who puts the stamp on the bill?

          • Jed

            not sure who you’re trying to support, tim, but your link is about zuckerburg’s salrary. salary is, of course, not the only form of income. stock grants, options, capital gains, are others, and on and on. another relevant bit from the article you link to:

            “While he received no new awards, the filing shows that Zuckerberg scored a $3.3 billion gain by exercising stock options in Facebook last year and still owns millions of particularly powerful class B shares. It also showed that the company spent roughly $650,000 for his private jet travel.”

            income. taxable.

            2) yes, that is my point. the money for property taxes comes from renters.

        • buyaclue

          The answer is stock. Capital gains tax is 15%

    • Lucy Frost

      A 20% sales tax would be tough on the poor, who have to buy the few things they can buy, such as clothing, food, etc. Perhaps if the 20% only applied to new items and continued to not apply to necessities such as food that would help. And it would spur an even bigger garage sale industry in south Austin!

  • Indiana Purl

    I just read where Jake Silverstein announced that Paul Burka is doing to the Texas Tribune. Perhaps that’s why there aren’t so many posts on here anymore? As we say in the backwoods, cornpone corner of Indiana where I hail, “Farrow the row and be best in show.” Good luck Paul.

    • WUSRPH

      I have not heard that but you do know what day this is don’t you?

  • donuthin2

    I am not opposed to property taxes, however, real property should share the burden with other kinds of investments such as stock and bonds, metals, etc. It is very unfair for those who invest in real property for their retirement to be treated very different than those who invest in their 401k, stocks, etc.

    • WUSRPH

      Non-tangible property, such as bank accounts, stocks and bonds, etc. were taken OFF the property tax rolls shortly after we gave “instruments of animal husbandry”, live stock, agricultural, timber, open space and wildlife preservation land special treatments that dramatically cut the taxes they paid. The real benefit of the ag and open space went to suburban developers who can hold a piece of land for years paying reduced taxes prior to developing it and making a big profit. At the time it was joked that if we weren’t going to tax live stock we should not tax other kinds of stock either. (Of course, we still tax business inventories but their value is basically self-reported.)

    • Jed

      why is that unfair? did the rules change after you made the decision about how to allocate your retirement investments?

      • WUSRPH

        I didn’t say it was fair or unfair….just that it was done…Actually, considering all the tax breaks given to tangible property owners (including the limited ones given to homeowners) they have done fairly well….and intangible property owners probably had a reason to feel they should get some too.

        To be fair, however, I should note that even before it was exempted from the property tax, little intangible property was actually being taxed. JJ will probably say it was because the owners were rich and powerful, but, in reality, it was because it was virtually impossible to identify who owned such things as stocks, bonds and other financial papers without some sort of a public registry (similar to a deed for real property or access to the owners IRS filings. As such, few of the many local tax assessor collectors (for all the varying taxing agencies who had their own assessor-collectors at the time) tried to tax intangibles.

        The only exception I am aware of was in the mid 1970s which a property poor school district called on the banks to give it lists of the owners of accounts in the banks whose addresses were in the district. It then intended to tax them. At the time an old legislator semi-saluted the effort by telling the tax assessor involved that “Sir, you have the courage of a near-sighted crop duster!”

        • John Johnson

          I am a conservative, WUSRPH. I believe in our capitalistic system. What I am against is a rigged game. Today the Big’s have a distinct advantage. Teddy Roosevelt would be bully pulpiting for another Square Deal if around today….but there are no TR’s in Washington or Austin this day and time. Legislators’ and the Big’s interests are entwined. So are both political parties. Otherwise, taxing oil and gas exports would be actively being considered right now.

          • Beerman

            You are so right. I am, also, a fiscal conservative, and believe strongly in a responsible capitalistic system. Capitalism has been very good to me, as a business owner, for over 50 years. However, today, the back room deals, insider trading, rigging of markets and constant skirting of the law is nothing but pure greedy capitalism, not the responsible capitalism that built Texas and America.

            We need a Main Street, middle-class revolt against greedy special interests on the far right and the far left of the political/business spectrum.

            Also, Teddy Roosevelt said, “Reform is the antidote to revolution.” And, as you said, there are no TR types in our democracy today….. very sad!

          • John Johnson

            We are on the same team. I have been self employed since I was 28. Over the years, I have often thought about how much I loved my job, but hated my boss. I have not had anyone to blame bad decisions on but myself. There have been a few bumps in the road, but I loved the entire ride. However, I would hate to think about starting over in this business environment as a 28 year old. The game is rigged.

      • donuthin2

        Actually not, but you don’t seem to have the intellectual capacity to understand.

        • Jed

          apparently not.

  • Gunslinger

    If you think Hegar cares about “the issue” as Paul states…well, then I’d like to be the first to welcome you to Texas. Here in the Lone Star State, we rely on borrowed time, luck and bravado to plan for our future. The phrase “Pray for rain” comes to mind.

    You see, Hegar (as well as many other of his ilk) doesn’t respond to arguments that less tax revenue will hurt local public services. He knows that he can take credit for cutting taxes, while the local officials will take all the blame for having to raise taxes later to make up for the difference. It’s not a good long-term strategy for effective government, but it will get him and other like him elected. They’ll enjoy the ride and let others worry about the future.

    Besides, he can always say, “This cut forces government to live within its means, just like your family has to do when you sit down at the ole’ kitchen table your gran’pappy made and blah, blah, blah.”

  • http://www.fortbendconservative.org/ John Bernard Books

    The democrats have a conundrum, some argue that Texas has a high property tax and the voters aren’t stupid enough to want a state income tax. So how can they raise your taxes so they can oversee the redistribution of your money? and they can’t figure out why they haven’t won a statewide election in over 20 years.
    Wait this isn’t about raising your taxes, its about a war on women……sheeeeesh!

  • TopTaciturn

    Things are done bigger and better in TX, I’ve heard. So the standing government opens one door (to shut a previous door) only to find that the door they shut, has shut them out to face more doors to pick and choose from. It sort of reminds me of “Let’s Make A Deal”, doesn’t it.

  • TopTaciturn

    TX should solicit Ted Cruz to drop his Congressional Crusade (to save the nation) on account his own beloved State ping pongs on this issue. The ramifications lurking in the shadows are not clearly visible. The States financial health is in jeopardy. Oh! I’m SO confused.

  • dormand

    Unless we are willing to allow Texas to continue on a trajectory that will displace Mississippi and Alabama at the bottom of virtually all quality of life rankings, we need to develop a state revenue basis that is sustainable.

    We have among the highest ad valorum taxes in the country. Our tax revenue for highways is based upon an obsolete twenty cents per gallon tax, which is inadequate to even maintain existing roads.

    The Texas business tax is an administrative nightmare which creates an unbearable burden on small businesses due to its unreasonable provisions and unclear guidelines.

    Our supply of water is inadequate to support the projected increases in population, particularly west of I-35. Generations of faulty pricing for water have produced a wasteful user population who assume that water is nearly free.

    If Texas did not have a massive amount of hydrocarbons to aid its poor planning, the state would be in most difficult straits.

  • Voice of Reason

    “But if we want to eliminate them (property taxes) and don’t want to make drastic cuts to state and local spending, we would have to make up the difference by dramatically raising the sales tax.”
    Therein lies the crux of the problem, on both the state and the federal level. It isn’t that the government doesn’t have enough revenue (via taxes & fees) – it’s that they fail to operate within their means, spending way too much and borrowing the shortfall.

    • http://xeric-front-yard.tumblr.com/ Tim Thomas

      I’d say it’s that we have a citizenry that has abdicated their responsibility and likes to trivialize complex problems with simplistic platitudes.

      • Jed

        i’m not sure taxing has to be complicated. it’s actually in the interest of the status quo to make it seem too complicated to change.

        what about this: fund the entire state operations solely via an annual “love it or leave it fee,” which scales according to where you want to live.

        • http://xeric-front-yard.tumblr.com/ Tim Thomas

          Devils always in the details. How would it scale according to where you want to live? Would it be more expensive in desirable places like Austin or more expensive in rural areas that cost more to provide government services?

          • Lucy Frost

            I’m pretty sure it’s already more expensive in the more desirable areas — because the assessed value of those properties goes up and therefore so does the property tax!

  • dcj

    This is as poorly thought out proposed policy as I have seen in many years.
    What happens to the less populous areas of the state, such as counties in West Texas, which, while wealthy in minerals, have next to no population?
    So, their indebtedness via muni bonds , which are backed by property taxes, and easily managed, due to healthy property taxes paid mainly by energy companies, would instead under this proposal, fall to a populace of perhaps 16,000 via sales taxes….laughable. Politicians should stay within their understanding of the facts.