Where Did All the Money Go?

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Dick Lavine /(512) 320-0222 x 101

May 4, 2009

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The case of the sales tax discounts and refunds

Public structuresâ€"including public education, child health services, and transportation infrastructureâ€"help maintain Texans’ quality of life, and they require adequate revenue to function properly. To provide adequate revenue, our state needs an up-to-date tax code without loopholes that let some dodge their share of responsibility. The Texas Tax Code contains more than a few tax breaks, special treatments, and refunds that have outlived legislators’ rationale for adopting them. This Policy Page briefly describes three of these special-interest dealsâ€"the “timely filer” discount, the “prepayment” discount, and the sales tax refund for economic developmentâ€"and suggests that the Legislature apply a sunset process to the tax code, as it does to all state agencies. An up-to-date tax code will help us take care of our public structures so they continue to take care of usâ€"without the rest of us having to pick up the slack for those using anachronistic tax loopholes to avoid paying their fair share.