Raising the sales tax to pay for property tax cuts doesn’t pay for most Texas families

/, Economic Opportunity, Employment, Savings & Asset Building, State/Raising the sales tax to pay for property tax cuts doesn’t pay for most Texas families

In early April, Governor Abbott, Lieutenant Governor Patrick and Speaker Bonnen announced that they will support a proposal to raise sales taxes to limit property tax growth.

Adding one penny to the state sales tax to reduce school property tax rates is the wrong approach for two major reasons. First, sales taxes are volatile, so further linking growing school enrollment to an erratic tax is misguided. Second, the sales tax takes the most from Texans who have the least, placing extra barriers in front of families working toward the middle class.

Significantly, 80 percent of Texas families would end up paying more in state and local taxes overall under the proposed scheme.

This is because low and moderate-income families spend a much larger portion of their income on goods subject to the sales tax, outweighing any property tax savings. The net result of the proposal would be higher taxes on all households except for the 20 percent of families with annual incomes of roughly $150,000.

Texas is wealthy and fast-growing, but our public investments don’t always keep up with the needs of our state. With fair tax policies, we can invest in schools, roads and needed services for all Texans.

Take action now — tell lawmakers that low-income Texans shouldn’t pay for property tax cuts.


Dick Lavine focuses on building state and local revenue systems that meet Texans' needs. Before coming to the Center in 1994, he was a Senior Researcher at the House Research Organization of the Texas House of Representatives for ten years. He is a Chartered Financial Analyst and served for many years as a member and chairman of the Board of Directors of the Travis Central Appraisal District. He is also a member of the Executive Board of AFSCME Texas Retirees, the statewide union local of retired public employees. The Equity Center named him the 2011 Champion for Equity for his work to reform our tax system to ensure it can adequately support public education and other public services. He earned a Bachelor of Arts in Economics, magna cum laude, from Harvard College in 1969, and a Doctor of Jurisprudence, cum laude, from the University of Pennsylvania in 1975.

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