Where are the consumer interests?
In regard to the long-awaited school finance reform committee, State Rep. Garnet Coleman has a few observations. The following is from a press release:
State Representative Garnet Coleman (D-Houston) today said Governor Perry and Tax Commission Chairman John Sharp should consider adding workers, consumers, and educators to the Texas Tax Reform Commission to make sure "tax reform" does not become yet another effort to increase taxes for the vast majority of Texas families without providing adequate funding for our children's schools.
"I'm sure the Commission members are fine people and I know many of them have solid records of service to the state and their communities, but there is not a single person on the commission who is worrying about paying the rent, making a car payment, or making a house payment this month," Coleman observed.
Coleman said that during three legislative sessions earlier this year, every plan the Governor and the legislative leadership put forward would have increased taxes on 90% of all Texans, adding that most Texas families are already paying more in the form of higher tuition, higher fees, higher property taxes, and toll roads.
"The Tax Reform Commission should refrain from recommending any increase in the state sales tax or other consumer taxes unless consumers and workers have a seat at the table," Coleman said.
"Although the Tax Reform Commission is supposed to find agreement on a broad based business tax to help fund public education, the absence of consumers and workers on the panel raises serious concerns that we may see yet another attempt to raise the Texas sales tax to the highest in the nation," Coleman said.
Coleman also questioned the fact that neither this commission nor any other broad based public forum will address how the money from a reformed tax structure would be distributed to pay for our children's schools.
"If tax reform is supposed to provide a stable source of education funding, why not address education and include educators so we'll know if the product we're being asked to pay for is worth the cost?" Coleman asked.
Seems reasonable to me. If this committee really is going to try to find a way to reform the way businesses get taxed in this state so that the burden is shared by the many instead of the few, and if that can lead to a more stable foundation for school funding, perhaps along with a tax break for the public, then great. But without a few members who will genuinely represent the interests of the public, it's not hard to imagine this thing devolving into a contest to come up with the most new and creative ways to raise consumer and sales taxes in order to protect industries deemed too "important" or "fledgling" or whatever. After four bites at this apple, we should know by now that this way won't work.
Posted by Charles Kuffner on November 08, 2005 to Budget ballyhoo
Well how about something different -- a NEW IDEA --not just from out of left field but deep center field, which pushes the envelope and is even out of the box. Instead of moving the sales tax, property tax and franchise tax "deck chairs" around on the Titanic, let's do something both the left and right wings can identify with -- in fact let's just lose the wings and act like a unified rocket that will satisfy taxpayers, schools, judges, and give the state a great big star for innovation.
Let's get rid of the school property taxes, sales tax, franchise tax, excise taxes, and a variety of fees. Let's replace all that 20th century thinking with the most progressive tax available, a very small transaction tax without exemption, deduction, or returns to file, immediately collected on all financial transactions carried out in the State and processed through an account registered to a Texas resident or company doing business here. Sounds different doesn't it? Now before you really smart folks start shooting this down, think it through carefully. The rate is the key -- if too big it will be worth considerable effort to evade it BUT if the rate is tiny and the penalties high -- why risk it? The rate to cover all expenditures of the state and the non-state part of school districts (approx $45 Billion annually) is generously 0.2% per side of every transaction. I say generous because it assumes capture of only an estimated 25% of the potential transaction tax base.
The Sharp Tax Commission and Legislature need to officially sanction a study by, why not UT?, Law and Business Schools along with the Econ Dept to detail the exact size of the tax base, laws required to "capture" it and effects on the state in general. It is well worth the money for a chance to move to the 21st century in taxation. You can review the plan and the credibility behind it, based on a national format, at www.apttax.com.