Chad’s Morning Brief: Texas House Republicans Endorse House Tax Cut Plan, Rick Perry Calls for a Strong America, and Other Top Stories
Here is your Morning Brief for April 27, 2015.
House Republicans Want Sales Tax Relief
According to the Texas Tribune, just about every single Republican in the Texas House wants to cut sales taxes over property taxes. In a letter presented Saturday, 90 of the 98 Republican House members signed off on the plan.
Almost all of the Republicans in the Texas House — 90 of 98 — endorsed cuts in state sales taxes over cuts in local property taxes in a letter unveiled Saturday, days before the House is set to vote on tax cut legislation.
Their stance is based on experience, they wrote: Lawmakers tried to lower local property taxes nearly a decade ago, their efforts were blunted by inflation, rising appraisals and local decisions on tax rates.
State Rep. Dennis Bonnen, R-Angleton, the chairman of the House Ways and Means Committee, has proposed a three-tenths-of-a-cent cut in state sales taxes along with cuts in the business franchise tax. The Senate has also proposed cutting the business tax but would roughly double the size of homestead exemptions from property taxes instead of lowering sales taxes.
Here’s an excerpt from the letter (a full copy is attached):
The House plan is the largest tax cut on the table, providing nearly $4.9 billion in tax relief for Texas, including the first-ever reduction in state sales tax, with a reduction in rate from 6.25 percent to 5.95 percent. By cutting the sales tax, we will provide tax relief to every taxpayer – employers and individual consumers alike. Sales tax relief is permanent – it can’t be taken away by local government or an appraiser, only by a vote of a future legislature.
Lastly, the House plan does the most to stimulate the economy. It creates tens of thousands more jobs, and does more to add to personal income growth. Instead of picking winners and losers in the marketplace, the House plan gives a larger reduction to all businesses that pay the business franchise tax by providing a 25 percent across the board tax cut. If we are going to have a business tax, we want to preserve the original intent: a tax that is broader, with a lower rate, because more employers participate in it.
We like the idea of a property tax cut, too, but our recent history in Texas on cutting property taxes is instructive. In 2006, the Legislature cut property taxes by $7 billion when it reduced school rates by 50 cents for every $100 in assessed value. By the time that “relief” was delivered to taxpayers, total school taxes had only dropped by $1.4 billion (in other words, only 20 percent of the tax cut actually made it to taxpayers), while county taxes increased by $1.1 billion, city taxes went up by $1 billion, and special district taxes had climbed by another $900 million. By the time taxpayers got the bill, their total property tax burden had actually gone up by $1.6 billion!
Another attractive feature of the House plan is that it shrinks the size of government instead of shifting it. Unlike property tax cuts, which cost the state budget and grow in cost with time, the sales tax reduction simply means the state collects less. We came to Austin to shrink government, not shift the burden from local government to the state.
The House is scheduled to vote Tuesday on Bonnen's HB31 and HB32.
Both John Frullo and Dustin Burrows of Lubbock signed the letter. This letter will add heat to the Senate and will go far in promoting the House version of the tax cut debate. Many of the most conservative members of the Texas House endorsed and signed the letter.
Perry Calls for Leadership
While speaking in Las Vegas over the weekend, former Texas Governor Rick Perry fired up the crowd while calling for clear and strong U.S. leadership according to the AP.
During his 35-minute speech to the Republican Jewish Coalition conference in Las Vegas on Saturday, Perry bashed President Barack Obama's foreign policy while calling for more defense spending, putting troops on Poland's border with Russia and taking a more aggressive posture against China. He underscored the importance of western values against Islamic extremism.
Perry said he was calling for "the type of strength that prevents war."
Perry has yet to say whether he'll pursue 2016 Republican presidential nomination, but he's spent months gearing up for a second run. Four years ago, he plummeted from prime contender to political punchline. He couldn't remember during a nationally televised candidates' debate one of the three cabinet-level departments he wanted to abolish.
Perry still is not registering in the polls, but it is still early and the media continues to bring up his failed run in 2008. What they can't ignore though is that Perry has what it takes to campaign and to connect with voters in the early states. Perry can fire up a crowd and has a fantastic resume. I still won't count Perry out of the mix for 2016, but I do consider him a second tier candidate behind Walker, Bush, Rubio, and Cruz.
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.