Chad’s Morning Brief: Greg Abbott Announces Legislative Agenda, Cruz Battles Taxes, and Other Top Stories
Here is your Morning Brief for December 9, 2014.
Legislative Agenda
Governor-Elect Greg Abbott yesterday outlined his legislative agenda for the upcoming 84th Legislative Session. According to the Texas Tribune, Abbott's top priority is education.
Abbott said he wants to improve the educational foundation that students receive in pre-kindergarten through fourth grade. "I want to ensure that all children finish the third grade reading and doing math at or above grade level," he said.
He also said he wants to ensure that students are graduating from high school "and moving on to the next phase of their lives" — whether that is college or a career. For those seeking higher education, he said his administration intends to work toward making that goal more affordable. They also hope to elevate the status of the state's public universities.
"One of the areas that disturbs me is the fact that five of the top 10 public universities in the country are from California, with none being from Texas," Abbott said.
Abbott laid out three other priorities Monday, including attending to the state's southern border. While securing the border is a federal responsibility, Abbott said, "Texas is not going to stand idly by and wait for Washington."
Improving infrastructure was also highlighted. Specifically, Abbott said he hoped to add $4 billion more per year for building roads "without raising taxes, fees or tolls."
Abbott's final priority was to usher in a "new era of economic development in Texas," which he said could be accomplished by making progress on his first three priority items. It would also include reducing the tax burden on businesses and individuals, lowering regulatory costs, and empowering the private sector by finding ways to "restrain the growth of government."
You can read the full story by clicking on the link above.
Taxes and Ted Cruz
Senator Ted Cruz is battling business interest in his opposition to a tax bill. According to the Texas Tribune, Cruz doesn't believe the internet and taxes are something that should go hand in hand.
Who knew a conservative politician could get criticized by business for opposing a tax bill?
U.S. Sen. Ted Cruz, a Texan on the early list of potential 2016 Republican presidential candidates, is talking about sales taxes on the internet, which seems safe enough.
Two taxes are in his sights, and one is almost completely without controversy, especially for a limited-government conservative like Cruz. The senator does not think the bills you pay for access to the internet should be taxable. Most of the support for taxing internet access comes from governments hoping to benefit. According to the Center on Budget and Policy Priorities, that tax brought in $358 million last year for state and local governments in Texas.
Cruz’s opposition to sales taxes on goods and services sold online, however, has raised the eyebrows of everyone from government budget writers to retailers that compete with internet and catalog sales.
“The last thing we should be doing is passing a massive new internet sales tax,” Cruz said at a recent news conference in Washington. He is opposed to federal legislation that would require online retailers to collect sales tax for the states where those customers reside — just like retailers in those states have to do. The legislation would treat online retailers as if they were located in the states where they are making their sales, whether they have a physical presence or not.
It is easy enough for someone from the federal government, which does not rely on sales taxes, to oppose those levies, whatever means of commerce they come from. But sales taxes are the biggest source of revenue for the state government in Texas and an important source for local governments around the state. Texas would have collected an additional $1.78 billion in 2012 had all online and catalog sales been taxed, according to the National Conference of Legislatures. Nationwide, the states missed $23.3 billion, by the organization’s estimate.
Local governments have property taxes to supplement other kinds of revenue. The state has other sources, but nothing on the order of the sales tax. Texas has no state income tax and only a few people in public life willing to even consider one. Property taxes pull in money forlocal governments and school systems, but are constitutionally prohibited at the state level.
Only one of the three classical legs of the tax stool — income, wealth and consumption — is used by the state, and Cruz is whittling on that one.
Consumption has changed. You probably heard the news that retail sales on the day after Thanksgiving — Black Friday, as it is known — were down and that online sales were up on “Cyber Monday,” a few days later.
The suggestion from Cruz is that those Monday sales, or a significant portion of them, should not be subject to sales taxes.
Some brick-and-mortar retailers, people who own stores where customers shop in the traditional way, are not happy. Their argument, broadcast by a trade group called Stand With Main Street, is simple: It costs 8.25 percent more to buy something in their Texas stores, where sales taxes are collected, than it costs to buy the same item online, where sales taxes are often not collected. They recently directed an attack at Cruz on BuzzFeed as part of a more general campaign to get the sales tax bill through Congress.
The businesses have been lobbying for years — first against mail-order companies and now against internet retailers — to force everyone to play by the same rules.
Cruz flips the argument, saying the small mom-and-pop retailers are falling victim to big retailers on and off the internet. His reasoning is that only the big guys have the administrative ability to manage tax liabilities and audits and bureaucracies in every state where they sell things and that the little ones will get crushed.
Lots of online sellers already collect Texas sales taxes from their customers. If they have physical properties here, the state has been aggressive in pulling them in. Amazon, which went for a long time without collecting the taxes, now does.
Cruz isn't the only lawmaker who opposes this, as Senator John Cornyn is right there with him. Cruz is just the most vocal on the issue as of right now.
Other Must Read Links:
These and many more topics coming up on today’s edition of The Chad Hasty Show. Tune in mornings 8:30-11am on News/Talk 790 KFYO, streaming online at kfyo.com, and now on your iPhone and Android device with the radioPup App. All guest interviews can be heard on our KFYO YouTube page after the show and online at kfyo.com.
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