Replacing Property Taxes with Sales Taxes Would be Bad for Texas Businesses, Families, and Public Education

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Author:
Dick Lavine /(512) 320-0222 x 101

December 12, 2007

Replacing Property Taxes with Sales Taxes Would be Bad for Texas Businesses, Families, and Public Education >>  
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Recently, some have proposed that Texas replace local school property taxes by increasing the rate of the state sales tax or expanding the sales tax to more goods and services. Such a tax swap would be a bad deal for businesses, families, and public education. 1) The swap would make Texas businesses less competitive because the higher sales tax would raise the cost of Texas goods and services. 2) Taxes on most Texas familiesâ€"including middle-class familiesâ€"would actually go up. Only the wealthiest families would see a tax reduction. 3) At the same time, public education would be hurt. Schools would have one source of revenue, sales, which is less stable than property. With the state paying all the bills, more decisions would be made in Austin, and the link between local taxpayers and public schools would be broken. In addition, local communities could no longer supplement the basic education provided by the state.