Right now, Texas is one of only seven states that doesn't have income taxes. I think it may be time for Texas to change its mind about having a state income tax. Without the implementation of an income tax, Texas is forced to rely solely on sales and property taxes for the fiscal year's revenue. Both of these forms of taxing are regressive, which is when the percentage one pays of his/her income towards the tax decreases as his/her income increases. Sales tax is regressive even though everyone is taxed the same percentage on consumer products because poorer families have to give a higher percentage of their total income than wealthier families. The same applies to property taxes. Families of lower incomes pay a higher percentage of that income for property taxes. In defense of regressive taxes, though, wealthier families do pay a lower percentage in taxes, it usually comes out to be a greater dollar amount, so they are physically paying more. Most wealthy families will buy more consumer products and live on higher valued property, increasing the actual amount of money paid for taxes and added to the state's revenue. So the taxes are regressive in respect to the percentage of your income paid, but wealthy families usually end up giving a greater dollar amount.
Despite its unpopularity, having an income tax would help relieve the debate over regressive taxes and it could also be used to help fund education. Our current tax system doesn't provide enough revenue for the fiscal year to properly support school funding. Why do you think Texas rankings regarding education are so low? For example, Texas currently is ranked 45th in the United States regarding SAT scores. Not only could state income taxes help bring Texas education up to the national average, but it could also help lower property taxes. "The state constitution requires that two-thirds of any income tax be used to relieve property taxes and one-third be used to fund education" (Lovegren). An income tax also taxes anyone who is employed and taxes companies as a whole, while property taxes only include those who own property. So, those who rent a house or an apartment are exempt from property taxes, possibly making income taxes more fair. Having an income tax will also help change our tax system from regressive to progressive. In conclusion, income taxes would give a broader base of revenue for the state, and it seems to be a more fair and equitable way to tax the citizens of Texas.
3 comments:
Collins, I agree with your post in its entirety. Texas' wealth gap is one of its major problems; the rich keep getting richer and poor get poorer. It is unfortunate that the Texas government does not see that the poor contribute more percents of their income due to the current sales taxes. Texas definitely needs to implement income taxes in its policies. Hopefully by doing so, Texas will distribute its wealth better and we will not be one of the most poverty-stricken states in the nation anymore. Also, hopefully more funds will be raised from the increased funds received by taxing the rich more. Like you said, these increased funds can be allocated into education, a sector that definitely deserves more attention. Unfortunately, the rich Republicans are now the majority in Congress and consequently these changes will be difficult to meet, even though these are the preferred measures the public wishes were done.
One significant way to better the education in Texas is to impose an income tax, as you point out. I like how you included that 2/3 of any state income tax goes toward relief of property taxes, while the remaining 1/3 goes toward education. Education is tremendously expensive, especially in a state as large as Texas. An income tax could generate a very large amount of income, potentially greater than or equal to that which is currently generated by the sales tax, depending on how progressive the tax is. Almost every other large state in the United States currently imposes a progressive income tax that generates a significant amount of their revenue. We are not only a minority, but absolutely stubborn about a progressive income tax.
I agree with you that our state needs to impose an income tax. It will help out immensely in relieving our debt and increasing our poor levels of education. One addition I have to what you propose is that the income tax should be progressive. This would undoubtedly take a long time to happen in our conservative state, but I believe this can happen during the next party alignment (in roughly 10-15 years judging from typical trends in history). The progressive income tax would help relieve the burden on poor families of an additional tax. Furthermore, the richer families will be relieved of some of their property taxes, likewise relieving the burden of an additional tax. Taxes Fight!
You can find my full post here - http://politicaltexan.blogspot.com/2007/08/taxes-in-texas-say-that-5-times-fast.html
Nice solid post. Sales taxes and user fees are WAY regressive. Property taxes are relatively flat. How do we convince the public that an income tax is a good idea?
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