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 structures—including public education, child health services, and transportation infrastructure—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 deals–the “timely filer” discount, the “prepayment” discount, and the sales tax refund for economic development–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 us—without the rest of us having to pick up the slack for those using anachronistic tax loopholes to avoid paying their fair share.