Gov. Abbott: Franchise Tax Reform Essential to Texas

Abbott touts Franchise Tax Proposal on Tax Day By Gov. Greg Abbott Texas Insider Report: AUSTIN Texas This year it is projected that Americans will pay well over $4 trillion in federal state and local taxes. April 15th is an appropriate day to re-evaluate our tax structure and to find ways to reduce taxes on our citizens. While we are fortunate in Texas to not pay a personal income tax we are paying as consumers and employees when it comes to the business franchise tax. The best job creation program is tax reduction.   Every dollar paid in business franchise taxes could instead be invested in higher wages or new jobs. Texas must promote smarter tax policies that energize the Texas economy by driving down the cost of doing business. Taxes hinder job creation shrink take-home pay and grow the size of government. Texas is at the pinnacle of Americas economy. For decades weve been a leading state for job creation and in 2014 we created more jobs than any other year in the history of Texas. Weve achieved this success by building a framework that allows free enterprise to flourish a framework composed of less government reasonable regulations and right-to-work laws that attract job creators and keep job growth here in Texas. But other states are catching up. Weve grown too comfortable. While Texans job opportunities remain robust declining oil and gas prices could impact job growth. Our past success may be blinding us to some of the things that we can and should be doing better. Ive traveled across the state and have heard from employers that the business franchise tax is a complicated and unfair burden that prevents them from reinvesting to grow their businesses and hire more Texans. A recent study showed that eliminating the franchise tax in Texas would generate 41500 new jobs $3.4 billion in new net investments and $9.8 billion in new personal disposable income by 2017. Thats why Ive informed the Legislature that I will reject any budget package that does not provide genuine tax relief for Texas employers and job creators. To encourage entrepreneurship among veterans I am also calling for an exemption from the franchise tax for newly created veteran-owned businesses for the first five years of operation. To keep Texas the best state for business and job growth the state must significantly reduce and eventually phase out the business franchise tax. This reduction in the franchise tax will help attract even more job creators and encourage even more Texas entrepreneurs to invest their capital in opening or growing a business. These tax savings will also be passed on to Texas families in the form of lower consumer prices and to employees in new jobs and higher wages. We must do more to keep government small keep taxes low and keep regulations reasonable if we are to give all Texans the opportunity to succeed. Texas is synonymous with freedom. We must expand that freedom by ridding the state of unnecessary and unfair taxes that burden job creators. By reducing and then eliminating the business franchise tax we can and will take Texas to the next level for job creation. EDITORs NOTE: Earlier today Texas Gov. Greg Abbott hosted a press conference with Ellen Wood co-founder & CEO of vcfo a finance human resources and recruiting professional services firm with Texas-based offices in Austin Houston and Dallas to promote his plan to reduce the business franchise tax. In remarks during the press conference Abbott outlined how reducing the franchise tax will enable Texas businesses to create more jobs and spur economic growth.

I have traveled across the State of Texas and heard from so many employers that the business franchise tax places a complicated and an unfair burden on businesses that prevents employers from reinvesting profits to grow their business and hire more Texans" Governor Abbott said. That is why I will reject any budget package that does not include genuine tax relief for Texas job creators" said Abbott. As an entrepreneur and board member for many organizations Ive seen firsthand the impact companies face as a result of the business franchise tax" said Wood vcfos co-founder & CEO. vcfo has seen more than a 25-fold increase in the tax. Additionally we had to pay significant five-figure franchise tax bills in years following the recent economic crash when our Texas operations barely broke even. The cost savings and expanded investment resulting from a reduction in franchise taxes will in turn benefit Texas employees their families and our communities" Wood said.