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Oct 15

Written by: egblogger
10/15/2012 4:33 PM  RssIcon

Texas is considering making some changes to the tax code soon that will possibly make a statewide sales tax replace the current local property tax. Although most people agree that the current tax system has its share of negatives, any tax code comparison only makes sense looking at the alternatives.  Currently, the tax system changes are focused on either expanding sales tax, recreating and expanding the business margins tax, or implementing a state income tax.  Another obvious solution would be to mix and match some of these alternatives to find a more equitable mix method of taxation. 

This change can either benefit us as a whole for the long-run by creating new jobs and expanding Texas’ wealth, or it can hinder our ability to have a more direct relationship with our community and raise taxes for low income families – it depends if whether you look at the glass half full or half empty.

                Many Texans are split in their opinions on how this decision might affect the State and local communities. First, the elimination or reduction of a property tax would reduce the benefits many homeowners are noticing with their homestead, disability, and over-65 exemptions.  Others are concerned about the alternative taxation methods that would replace property tax,  For example, some are against eliminating the local property tax because it has the possibility of placing a sales tax on household items that are not currently being taxed, such as groceries and electricity.  Second, a more inclusive business tax would harm the current business climate in Texas and deter businesses from moving to the state.  Finally, the state legislature has been patently opposed to a state income tax because it pushes the burden to individuals more than to businesses, it would require a large administrative operation implemented in a short period of time, and income tax tends to be less stable during business cycles than property tax.

For more information regarding this or other topics, feel free to contact us.

Estes & Gandhi, P.C.

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