Dick Bowen: Property Tax Proposal
Property Taxes are essentially rent payments on the land you own. The amount you pay is subject to the whims of government officials based on how they value your land. The law says the same valuation methods must be used across Texas but county to county and even property to property; that does not happen. Many property owners are taxed at a higher rate than a similar operation in the next county across the county or across the state.
Even more unfair is the personal property tax which is haphazardly applied across Texas. All equipment falls under the personal properties tax. Some counties do not try to collect it and others are zealous in their search for personal property that they can tax. This puts many companies at a commercial disadvantage. Property taxes definitely hinder our economy but the personal property tax is the most unfair tax since it is so unequally applied from business to business and county to county. The way to move the Texas economy to create more jobs is to make taxes more fair easily understood and lower.
Furthermore there are numerous studies showing that Real Property Taxes in Texas are regressive because lower income people pay a higher percentage of their income for that tax than higher income people. Additionally renters who are normally lower income pay property taxes as part of their monthly payments but are not able to deduct that from their income taxes.
On the other hand sales taxes in Texas are progressive because medicine and unprepared food are exempt. Other aspects of these studies include that if we closed the business loop holes in our sales taxes like manifiestas (Mexican citizens taking goods back to Mexico pay no sales taxes) we could get by with a 1.5 increase to replace property taxes with sales taxes.
One of the best ideas is for all businesses to pay sales tax at the time of the purchase and then file for a refund for those that were used in the manufacturing of their product. Many businesses are abusing the sales tax exemption to not pay taxes on many products that they use that should be taxed. We cannot afford enough tax auditors to police the existing system; but it would be easier if everyone paid their sales tax at the time of purchase and then applied for a rebate.
I propose a 3 step plan for moving forward toward abolishing all property taxes as follows:
(1) eliminate sales tax loopholes raise sales taxes 1.5 and eliminate school property taxes while continuing to fund schools at the current levels dipping into the rainy day fund if necessary (2) after six months evaluate results i.e. revenues up by how much over preceding year same period (3) Make downward adjustments to sales taxes every six months until reaching a sustainable level then initiate a study on how to eliminate the remaining property taxes.
Please join me in moving to reduce our overall tax burden but especially to eliminate property taxes both real and personal. When elected to the Texas Senate this fall I will work with other like minded Texas Legislators to eliminate these taxes. Please help me on this important issue.
Dick Bowen is a Candidate for Texas State Senate District 19
