Tax cut fever continues to spread through the Capitol, and we keep asking the same question: is it appropriate or fiscally responsible to place tax cuts at the top of the agenda?
State leadership seems to be prioritizing tax cuts above all else, when programs and services our businesses and families depend on are left struggling. Texas is a wealthy state, with sufficient revenue to invest wisely in our future. Meaningful investments in education, health care, roads, and more are possible with the revenue available to our lawmakers, but they are failing to make the investments needed to keep our state competitive.
Representative Dennis Bonnen, Chairman of the House Ways & Means Committee, announced details of his tax cut package Wednesday, a plan that would cost over $4.8 billion. The key components are a 25 percent across-the-board franchise tax rate reduction and a sales tax cut of 0.3 percent (approximately 40 percent of which would also benefit businesses).
The Senate has already passed its own $4.6 billion tax cut plan, which combines property tax cuts in the form of a homestead exemption increase with a smaller, 15 percent franchise tax rate cut and an increase to the franchise tax exemption for small businesses to include those with gross receipts under $4 million.
Debates over the relative virtues and pitfalls of these competing approaches miss the mark. Rather than taking the required steps to restore funding to education, expand health care, and improve neglected roads and other infrastructure, lawmakers are prepared to risk our state’s future with permanent tax cuts that will only grow over time.