In early April, Governor Abbott, Lieutenant Governor Patrick and Speaker Bonnen announced that they will support a proposal to raise sales taxes to limit property tax growth.
Adding one penny to the state sales tax to reduce school property tax rates is the wrong approach for two major reasons. First, sales taxes are volatile, so further linking growing school enrollment to an erratic tax is misguided. Second, the sales tax takes the most from Texans who have the least, placing extra barriers in front of families working toward the middle class.
Significantly, 80 percent of Texas families would end up paying more in state and local taxes overall under the proposed scheme.
This is because low and moderate-income families spend a much larger portion of their income on goods subject to the sales tax, outweighing any property tax savings. The net result of the proposal would be higher taxes on all households except for the 20 percent of families with annual incomes of roughly $150,000.
Texas is wealthy and fast-growing, but our public investments don’t always keep up with the needs of our state. With fair tax policies, we can invest in schools, roads and needed services for all Texans.