Texas needs a state income tax

With the election of Dolph Briscoe as Governor of Texas in 1972, the slogan “no new taxes” became popular with aspiring politicians seeking office. The slogan belies the fact that we don’t take the time to compare old taxes with possible new taxes and what is in our best interest.

In today’s political world, it seems the public is increasingly tolerating words that were once considered taboo to be uttered on television or radio. Note the fact, however, that you almost never hear a politician running for office even mention the word “tax”.

Our legislature continues to rely primarily on local property taxes to support our state public education system. The difference in property wealth of school districts has been a problem for several years. It remains to be resolved. There have been several failed attempts to address the issue, many of which are highly unpopular, such as forcing wealthy school districts to donate a portion of their revenue to poorer school districts.

The problem is the fairness of the distribution of real estate wealth across our state that forces bosses in some districts to set their rates at maximum to raise an insufficient amount to provide a quality education while wealthier districts can collect more that’s enough with only half the effort with a much lower tax rate. The system came under serious scrutiny in the 1960s when an impoverished school district in San Antonio sued in federal court. The federal court ruled that although the state system was not unconstitutional, it was highly questionable and something had to be done to fix the problem.

If we are to judge the quality of school districts fairly, they should all have the same access to resources. A fixed and reasonable income tax would solve this problem.

The fear of a state income tax is likely caused in large measure by Americans’ distrust of the IRS and high state income tax rates. A state income tax, however, is generally a very different animal from the federal income tax. The vast majority of states that tax income set the rate very reasonably. The rate of state income tax could be capped by our state constitution if such a tax were passed by the people. A ceiling could also be imposed on the property tax.

Usually, most states using state income tax only take 1 or 2 percent or nothing from those earning $50,000 a year or less.

One problem with not mentioning the word “taxes” is that in a democracy most of our problems are solved by reasonable discussion and debate. A problem that is never discussed is rarely solved, especially in a democratic type of government. Instead of simply turning a blind eye to taxation, our politicians should look for ways to make taxation more efficient and fair.

Most Americans, especially Texans, would probably be surprised to learn that many states with income taxes take less money from citizen homeowners than Texans. In California, for example, personal California homeowners are taxed less than citizen homeowners in Texas. A recent report by the Institute of Taxation and Economic Policies pointed out that several states tax less than states that do not have income tax.

Think for a moment of a professional athlete who earns a multi-million dollar salary but resides in only a small condo in Texas and lives elsewhere. He is not taxed on his multi-million dollar salary, while the owner of a three-bedroom, two-bathroom home in the same neighborhood is heavily taxed. A small additional tax on the many billionaires who reside in Texas would certainly not harm their standard of living. The institute pointed out that most billionaires in Texas have a tax rate of 20% while oilfield workers and refinery workers, welders and normal workers pay 33.5% of their total income.

At 88, I seriously doubt I will ever live to see a Texas income tax. But a study of the facts related to taxation is worth a look.

Carl Parker of Port Arthur is a lawyer and former state senator. If you have a possible guest column for the company, send your idea or the column itself to [email protected] If you have something to say, we want to hear from you!

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