It's hard to believe but the Texas Gross Receipts (Margins) Tax on business proposed by a Republican, Governor Perry, and passed by a GOP dominated legislature in 2006 was further complicated in 2007. This was the largest tax increase in Texas history, which requires business to pay up to 10% of its gross income to the state while large corporations were given loopholes. Of course, what really irks conservatives is a business would have to pay taxes whether it made a profit or not. In that way, it is worse than a corporate income tax. You need a profit to pay that one! The session just ended raised the exemption level to $1 million, but like the Bush Federal tax cuts, it sunsets the reduction in a few years. Better than nothing, but does anyone believe that we can keep this higher exemption down the line?
The non-partisan Tax Foundation in 2006 described gross receipts taxes as poor tax policy that lead to harmful tax pyramiding, distort companies structures, and damage the performance of state and local economies. The tax was sold as a "trade-off" for lower property taxes. This is a recurring myth that never works as local government and school districts either raise the tax rate or rely on runaway appraisal increases (fueled in many cases by the real estate bubble and the aggressive appraisal increases of Appraisal Districts).
In fact, the failure of the GOP to pass enforceable universal spending limits which was the focus of the CLOUT v. Texas lawsuit filed over three years ago (and stonewalled by most state officials and the courts). We also need to put teeth into limitations, make them apply locally as well and we need to limit tax receipts also.
Is it any wonder the GOP in Texas has steadily lost ground in the legislature since taking over in 2002? Or that Governor Perry topped out at 39% in the last election? When the GOP abandons its fiscal conservatism, its base loses interest.
100 Days Of Obama
by Congressman Ted Poe (R-TX Dist. 2)
President Obama's first 100 days are now complete. Now all across the country critics and political pundits are giving him letter grades and polling the American people to determine what kind of job he's done so far. The questions they should be asking are - Is the United States safer? Has he made our economy stronger? Has the President kept his promise? The facts speak for themselves.
Is our country safer? During his first 100 days President Barack Obama has cut defense spending dramatically, released terrorist-prisoners from Guantanamo Bay that have, once again, joined the fight against America and even apologized for America's "mistakes" on three separate continents. So far, 15% of the Pentagon's missile defense budget has been cut, the United States is considering giving up on the development of the most advanced fighter in world history (the F-22) and now the Administration wants to scrap its missile defense system, in Poland because the Russians are complaining. Even though the system was designed to protect us from Iranian missiles, not the Russians. It seems the President wants to spend money on everything but defending our national security.
Has President Obama made our economy stronger? It's no secret that he started his presidency during rough economic times, but it seems his solution to the problem is to spend our way out of it and tax the American people. The $787 billion stimulus added over one billion dollars to the national debt and American won't even see most of that "stimulus" until after the current recession is expected to be over.
The companies that received bailout money don't seem to be stronger since their handout - Chrysler, who received $4 billion, just declared bankruptcy. The only thing that the President's spending bills have stimulated is the size of our government. It's also true that President Obama inherited a budget deficit, but what has he decided to do with it?
Thoughts This Fortnight
Texas Property Tax Reform? Not This Year.
As another legislative session ends, whatever happened to property tax reform? It's been a subject of serious discussion by Gov. Perry and others when the legislature is not in session. In session, little has happened despite the fact at a few points in the Governor's nine year tenure it was "a top priority." A few years ago we even had the Pauken Commission that did yeoman's work, only to be essentially ignored. TCR suggests a strong step in this area: abolish property taxes and replace them with a 2.5% broad-based consumption tax.
Texas Spending Limitations With Teeth? Not This Year.
One thing Edd Hendee and CLOUT proved by their three year battle to enforce the constitutional limitations on general revenue (but not all state) spending is that the present law has enough loopholes for the politicians to dance around it, and they have. Edd Hendee and CLOUT have put out ideas of how to achieve real spending limits: (1) apply it to all state spending, (2) limits increased only to the increase in the gross state product, (3) recalibrate the numbers annually so inaccurate estimates are replaced by real figures. This ia a simple way to control spending. The big question is, do the politicians in Austin really want to?
ObamaCare Like HillaryCare, The Solution For Medical Care Reform We Don't Need.
In fact, the Democrats plans in this area begin and end with rationing. It will be used to take the medical decisions from doctors and patients and give them to the government. There is an alternative, build a marketplace of cost conscious, consumer-making decisions. How to do that? First, eliminate the employer-based health care tax deduction and substitute an individual federal tax credit. Second, use the internet to establish transparency and price competition for medical services. It has helped price competition in many areas, why not here? Third, encourage choice in coverage for individuals, similar to the choice of coverage given federal employees.
TCR Back on the Air
Red, White & Blue, featuring TCR Editor Gary Polland and liberal commentator David Jones has returned after a four-month hiatus. The co-hosts want to thank you, our loyal viewers, past guests, and the leadership of the University of Houston and its great Board of Regents who have been very supportive. On June 12 at 8:30 pm on PBS Houston 8 (308 on Comcast cable) and Sunday at 5:30 p.m. our guests will be State Representative Ellen Cohen and Carol Alvarado. Next up is Sheriff Adrian Garcia, and coming soon, Lt. Governor David Dewhurst, Chancellor Renu Khator, Sen. Kay Bailey Hutchison,and State Senator John Whitmire. As a new fun feature, visit Red, White & Blue on the Houston PBS website, where you can see commentary about the show and its guests by Gary and David.
About Your Editor
Gary Polland is a long-time conservative and Republican spokesman, fund-raiser, and leader who completed three terms as the Harris County Republican Chairman. During his three terms, Gary was described as the most successful county Chairman in America by Human Events - The National Conservative Weekly. He is in his twelfth year of editing a newsletter dealing with key conservative and Republican issues. The last seven years he has edited Texas Conservative Review. Gary is a practicing attorney and strategic consultant. He can be reached at (713) 621-6335.