CLOUT urges “no” vote on Sharp/Perry tax plan
by David Benzion · 04/24/2006 5:47 am[CLOUT has just issued the following statement.]
Action Alert - Call you State Rep Right Now at the Capitol Office!
Find your State Representative and their Austin Phone number at this website Immediately!
http://www.house.state.tx.us/members/welcome.php
Tell Your State Rep to VOTE NO on House Bill 3 - the Sharp/Perry Tax plan. Taxing small and medium businesses is BAD for the Texas economy and for job growth.
The Texas House of Representativs votes Monday morning on this plan for the first time. Tell your Representative that taxing Texas is bad for Texas - and the State has a $8.2 Billion Surplus - why tax more Texans when you are sitting on a pile of extra money? Use the surplus to Buy Down the School Tax Rate and then GO HOME!
Your State Rep will have a letter on their desk tomorrow morning from local tax activist Norman Adams. CLOUT support Norman Adams position:
The Sharp Business Tax will discourage business owners from locating in Texas.
I have compiled a list of eight companies located in the Greater Houston area. Please take a look at the Franchise vs. Sharp spreadsheet. I believe these companies represent typical small business owners in Texas. Most of these businesses will not get substantial property tax relief therefore I have not included it.
Paul Bettencourt, Dan Patrick and I furnished a completed schedule "B" (Sharp Tax form) to Governor Perry’s office Friday, on each of these businesses. One of the questions his staff asked, was "Why didn’t you bring this to our attention sooner?" My answer was, because I personally became aware of the details of this proposal only two weeks ago!
The majority of small business owners do not realize what the Sharp Tax Plan is about. They are leaving it up to you, their elected representatives. When they find out about it, they will hold you responsible!
The spreadsheet will show you what the Sharp Business Tax will do to these business owners! These folks will average nearly a 400% increase!
Currently, the Texas Constitution protects non corporate entities from an income tax. According to the Sharp "experts" less than one out of ten Texas businesses are subject to the Franchise tax.
The Franchise tax collected for 2005 was $1.7 Billion. In 2006, it will exceed $2 Billion!
If the Sharp plan is adopted, we will not only increase the tax our corporations are paying now, by adding the LLPs, we will multiply the tax rolls by at least ten fold. This new tax may produce twenty times our current revenue! NO ONE KNOWS!
I pray God will move you to review the attached Franchise / Sharp comparison. If you will actually review it, you will agree the Sharp Tax is bad for Texas.
May God bless you as you consider the future of our great state.
Stand strong, do what you know is right.
Norman E. Adams, CIC
Adams Insurance Service, Inc.
In addition, Norman Adams will present each Representative with real examples showing companies in Houston Area and what their new tax will be. These examples were prepared by the CPA’s of these companies using their 2005 Financial Reports:
Electrical Contractor
2005 Gross Revenue: $3,619,631.00
IRS Profit or Loss: -28,910.00
Franchise Tax: $0
Schedule B Line 5: $1,508,455
Sharp Tax %: 1.0%
Sharp Tax Due: $15,084.55
Net Tax Increase: $15,084.55
Plumbing Co.
2005 Gross Revenue: $19,368,420.00
IRS Profit or Loss: 503,480.00
Franchise Tax: $22,656.00
Schedule B Line 5: $9,465,317
Sharp Tax %: 1.0%
Sharp Tax Due: $94,653.17
Net Tax Increase: $71,997.17
Const / Landscape
2005 Gross Revenue: $8,753,122.00
IRS Profit or Loss: $ -15,159.00
Franchise Tax: $1,031
Schedule B Line 5: $5,504,281
Sharp Tax %: 1.0%
Sharp Tax Due: $55,042.81
Net Tax Increase: $54,011.81
Insurance Agency
2005 Gross Revenue: $4,150,000.00
IRS Profit or Loss: $43,600.00
Franchise Tax: $1,962.00
Schedule B Line 5: $1,872,920
Sharp Tax %: 1.0%
Sharp Tax Due: $18,729.20
Net Tax Increase: $16,767.20
Paving Supply Co.
2005 Gross Revenue: $58,624,642.00
IRS Profit or Loss: $1,150,921.00
Franchise Tax: $51,791.00
Schedule B Line 5: $18,162,579
Sharp Tax %: 0.5%
Sharp Tax Due: $90,812.90
Net Tax Increase: $39,021.90
Party Rentals Co.
2005 Gross Revenue: $13,741,264.00
IRS Profit or Loss: -957,496.00
Franchise Tax: $0
Schedule B Line 5: $8,079,632
Sharp Tax %: 1.0%
Sharp Tax Due: $80,796.32
Net Tax Increase: $80,796.32
HVAC Contractor
2005 Gross Revenue: $3,864,542.00
IRS Profit or Loss: 286,454.00
Franchise Tax: $12,890.43
Schedule B Line 5: $2,811,600
Sharp Tax %: 1.0%
Sharp Tax Due: $28,116.00
Net Tax Increase: $15,225.57
Sandwich Shop
2005 Gross Revenue: $2,437,759.00
IRS Profit or Loss: -66,607.00
Franchise Tax: $926.00
Schedule B Line 5: $2,437,759
Sharp Tax %: 0.5%
Sharp Tax Due: $12,188.80
Net Tax Increase: $11,262.80 (Based on Capital)
The Governor’s staff has the worksheets on each of these businesses. Their CPA’s ran these examples - these are real companies in the Greater Houston area.
Call you State Representative - TAXING TEXAS WILL MOVE JOBS AND ECONOMIC GROWTH OUTSIDE OF TEXAS.
YOUR STATE REP’S VOTE IS ON THE RECORD - THEY MUST VOTE FOR TEXAS - NOT FOR TAXES!!
Edd C. Hendee
Executive Director - CLOUT
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45 Responses to “CLOUT urges “no” vote on Sharp/Perry tax plan”Search
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First (and last) post!
Ha!™
Knowing the brain-iacts up in Austin, I have a feeling we will have to resort to my tried a true method of dealing with these (bleep)s, and I’ve said it before.
Get a rope!
/end sarcasm (for those that are too P.C.)
Faxed Larry Taylor/Dist 24 this morning at 7:20 as I will be unavailable to call after their office opens. I’ve been generally pleased with Mr. Taylor’s support and voting record in the past, but one aw-$hi+ wipes out at least 10 Atta-Boy’s.
Just sent an email to my rep. asking him to vote against the sharp/perry future income tax plan.
CLOUT should have someone proof those things before they go out.
Nice substance, but the errors detract from the seriousness of the message.
Could we fight a little harder on the property tax and transfer the taxes to the users such as tolls and sales taxes so everyone pays their fare share not just property oweners?
Property taxes I thought was Clouts focus
Also don’t get me wrong, I’ve run businessess in Texas, they have little taxes compared to other states - I’m not seeing an excessive tax here,
The people are being excessively taxed not the businessess. (I know business owners are people like you and me I’m talking about those with more than 1 million a month in revenue not the 100 hr a week sole proprietor)
Also med and large business’s can charge what they want not so the working people they have a salary
I think Dan completely is burning up his political capital in the WRONG PLACE
THE PEOPLE DAN, the ones who pulled the lever for you
#5
Amen Kevin, their analysis looks like its free to do business in Texas
Also, I have not heard of any business leaving Texas because of taxes indeed I can list busineses that moved here to escape state taxes
William Brothers - Oklahoma
ExxonMobil - New Jersey
Shell - New York
Texaco - New York
Amoco Production - Louisiana, Chicago
T
Also in good business schools, they teach a strange concept about corporate taxes
Corporations do not pay any taxes, their customers do.
They take the money from you and me and give it to the state and the Feds when we buy their products
You however can’t charge your employer an increase because your property taxes go up, you either work unpaid overtime in hopes of getting a bigger performance raise or you take a second job.
The people have no choices, business of medium size do, they can make a product cheaper, they can raise prices
We just get it in the ass..ets
THE PEOPLE DAN
For all of you who think the tax switching to the business will give you a break,think again. You will eventually get both. Once the tax is effective,it will never be reduced or eliminated. I sent my Rep.an e-mail stating my position.
Called Debbie Riddle’s capitol office and was assured she planned on voting down HB3. Left a message with Lindsay voicing my wishes that he also vote down this bill, but have not heard back to confirm his intent. (I had already faxed them both last week expressing how I wished to be represented on this issue - and others).
P.S. As I am not a business owner, my main complaint is that I’m sick and tired of having to pay additional sin taxes because I choose to smoke! I was told that instead of passing an immediate $1/pack sales tax on smokes that the tax would be incremental from $0.55 year one, add $.025 the following year and pick up the rest in the third year. Garbage! I don’t even have kids. I don’t mind helping to fund education, but I don’t believe I should be penalized because I smoke! Especially being expected to pay extra for someone else’s kid’s education. That is unjust! I’m done. LOL.
9
its not tax switching, charging sales taxes is a sure fire way to make sure those who are here illegally and underreporting income that they participate instead of putting the burden on the elderly homeowners and yourself
The state does not like to depend heavily on sales taxes because they are always projecting revenues wrong and they are making it up in the appraisal districts - also when the economy does poorer it doesn’t shove people out of their homes
Look I’m not for this tax, but I want dan to threaten, stop all attempts to avoid the property tax removal
Look I’m not for even leaving the property tax in place - but if we are going to have stupid fights over non-issues like this minimal tax on medium corporations -
11
I can’t think of any taxes that have gone up more than Texas property taxes
Cigs have seen a 100% tax increase in 8 years so has YOUR HOUSE - that a huge disparity
We have to pay taxes - i’d rather they be for activity not valuations and achievement - if your not doing well, you don’t get hammered - if you lost your job - you’d feed your kids first and not smoke - but under our current system - they don’t ask you if you have a job when the property tax bill arrives with its 6 to 8% increase
Called my rep, Dora Olivo (D), to urge her no vote on HB3 and also called Charlie Howard (R) to urge his no vote, then was relieved to hear him on Edd’s program later. Called his office again to thank him for his support and to urge him to run for Tom DeLay’s seat in the 22nd district.
Have been re-districted out of Charlie’s district and into Dora’s; it’s lonely here for us few conservatives. But her staff person listened well and was very courteous. And a lot of her constituents are small business people….
Eric,
my point is, right now they say this “new” tax will help keep the “old” tax down. I would wager that will never happen. Both will continue to go up. As far as your smokes. You have the option of not paying that tax. Quit smoking.
#15 - How about we place a tax on obseity? Let’s get on the scales and those who are unhealthily overweight can pay the extra tax for shoving icecream down their gullets!
If my neighbor and I are both paying identical taxes for identical homesteads, but he has 4-5 kids in school and I have none, why should I have to carry that extra burden? Your argument is illogical. I’ll get my smokes over the internet and I still won’t pay the extra tax. I live in one of the highest school taxing districts in the state - Spring ISD, and it’s eating me alive! And now NHMCCD wants to hit us up for another tax to fund higher education for kids coming out of the ISD districts who are barely literate. It’s bull.
Greg we agree totally, (I don’t smoke btw) but my point is
you poke a stick in everyone’s eye at the right time - this is not that time and not a greater wrong than property taxes
A revolt is when you have Riddle, and company file motions to attach riders to stop the property tax
Voting no will not get rid of the property tax
Letting any - I repeat any business be conducted in Austin will get rid of it real real quick
Burning up your influence with your fellow Republicans by defending a minimal and reasonable and fair tax is crazy
If Dan can get all taxes blocked no more legislation passed until they get rid of that property tax not a lowering of the rate or a lowering the the increase (unbelievable!)
Block Austin, get them to fix it, taxes like this franchise tax are based upon the performance not the wealth of mid sized companies
I can’t think of anything fairer than that
i can’t think anything more unfair than an out of control tax on peoples homes
There’s a big difference between the two
RE: DAN
Eric
Dan has not been elected yet. As of this moment his influence is still citizen level.
The more you eat at a restaraunt, the more tax you pay on the bill. Therefore, that tax is already in place.
You’re trying to compare taxes on a luxury like smoking to taxes on essentials like eating. It’s a ridiculous comparison. I take the same view on alcohol. There’s a huge difference between taxing vices and taxing those things which people have no real choice but to use. Gasoline is a prime example of that. Home ownership is another.
I’m not passing judgement on you for smoking. Puff away to your heart’s content. But don’t expect me to feel sorry for you at having to pay high taxes on something which:
A) you don’t need
- and -
B) is incredibly bad for your health
True
but he can greatly influence legislation - but you’re right I’m done on this
The businesses will simply pass their tax increases through to the consumers.
People need icecream to survive? LOL. I seldom eat out, can’t afford to. Guess I’m busy burning up my money on smokes. Eating out is a luxery, too. I don’t think we pay taxes on groceries at Kroger, do we?
I don’t care about my health. I don’t care about my life, and I don’t really care about taxes. We’re all going to die anyway, and your kids are going to be the one’s stuck paying the bill for our excesses in long run.
I have trying to contact my rep all morning both in austin and here but only voice mail. also th link for the live broadcast says not in session HMMMMM maybe they dont want us to hear what they are doing
I guess I am just tired of always having to pay more for “education” and the school districts are doing a lously job of educating. I don’t have kids and don’t feel really obligated to pay for every illegial that sneeks into my country. There are ways to fix the school problem without more taxes. Cut administration - no one is indespinsible (except the teachers). 30 students to a class is just fine. Pretty buildings do not make learning easier. Quit telling poor and minority people they can’t learn because they are disadvantaged then spending money on stupid programs to make them “feel better”.
The truth is that I am getting taxed out of my home and I can hardly afford to drive back and forth to work. The only thing that nobody will take is my blood.
I can’t believe the people here are for any tax. The non-smokers don’t care about the cigarette tax. Most people want the business tax because they don’t own a business and they only care about their property tax.
I want responsive government. We have huge surpluses that are growing every day. I want my money back.
I agree with Paul Bettencourt. We need a spending commission. Cut the property tax with the surplus. Cancel the special session and address the remaining issues during a general session where people can be heard and debate isn’t limited.
#26 Ned;
You’re right on target! I just sent my two reps a terse but to-the-point reuquest that they do not vote for HB#3. If they do, there are a lot of us who will become even more politically active in their next re-election campaign.
Surplus Commission? Has a nice ring to it! But don’t hold your breath! Come on Dan!
Ned,
I don’t think you’re right on target. The reason I don’t care about a tax on smokers is because smoking has no real benefit to society and it is a luxury. I don’t smoke, that is true. But I do drink alcohol, and I feel the same way about that. It’s a luxury, and if they decided to tax the living crap out of it, I wouldn’t get all that upset about it. Drinking is also a luxury.
Where I get upset about taxes is when they are (excessively) placed on things that are truly neccessities and/or beneficial to society as a whole. Fuel is an example of that. Home ownership is another. This business tax falls into the same category. It’s fiscally stupid to increase taxes on businesses which are the lifeblood of the economy.
Let’s face it, we need to tax something. Government isn’t free. So why not tax luxury items over things which are necessary and/or benefit society as a whole? It’s unrealistic to say you “can’t believe the people here are for any tax”.
I don’t suppose that it has occured to anyone that we should focus on the spending side of this equation.
I can’t hold our fearless leaders accountable for things that are out of their control, but there are still a lot of things that need to be fixed.
I don’t feel like I should have to pay for the elaborate football stadiums and fancy school buildings that have been foisted on us. It doesn’t matter who pays the taxes it is still wasteful spending and hasn’t improved the education level one iota.
All forms of taxation are onerous if you are the one that has to pay it. We (the voters) are the ones who elected these spendthrifts. If we have a bone to pick it should be with ourselves.
Simple
Separation of government and schooling.
#28 Dude,
When you start imposing lifestyle taxes it never stops. If we were in financial difficulty I would be willing to debate this with you.
They are telling us we have a $8.2 billion surplus. The Comptroller says that will continue. Her statement:
__________________________________________________
“I am projecting growth in the gross state product of 4.9 percent through this fiscal year, and 4 percent in 2007.
Strayhorn told lawmakers they now have $71.9 billion in state funds available. Revenue available from all funds of state government, including federal funds will total $139.2 billion.
__________________________________________________
$139.2 billion and they need more. Give me my money back and get out of my business and my personal life. Start acting like conservative Republicans.
Maybe it’s time to make Dan “King of Texas”. I bet he could fix this with no increase in taxes.
Ned,
I agree with you about the financial difficulty. Since we aren’t in it, they have no business talking about new taxes, whether lifestyle related or not. My disagreement with you is in principle. You say when you start imposing lifestyle taxes it never stops. Well, I agree with you there too, but taxing neccessities never stops either. In summation, we can safely say that taxation will never stop.
Now then, would you rather be taxed on your neccessities or your luxuries? Neither is not an acceptable answer because it won’t ever happen. I’d love neither, too, as would any sane person. But we’re going to pay one way or another. The problem is when it’s both, and that’s what chaps my posterior.
#25
They even pay you big bucks when you give blood. What a plus..
32 Dude,
I agree. I am strongly against the business tax because it would be so easy for them to increase it. I pay franchise tax and don’t have a problem because I only pay when I have a profit. I wish they would just make the franchise tax apply to all companies, if and when we need the money.
Right now we have overpayed our tax bill and I want my change. I actually did overpay my company’s sales tax last month and the Comptroller sent me a refund check today. Great concept!
On that we can certainly agree.
Someone said something earlier about people not being able to argue civilly on this blog. You and I just did and proved them wrong. I enjoyed it. Keep up the hard work and do your best to keep your money!
Dude, you could have a civil discussion with anyone here! I love your reasoned responses.
Already, who is this idiot RINO on the radio! He REALLY needs the boot!
davewolfgang
Thank God he will be my Senator. Now I just have to get rid of Van Arsedale!
#37
I know, I just listened to it (if you can call it that). He’s got a mind like a steel trap - slammed shut! Poor Dan, this is what he has to look forward to. Makes me want to go vote for him again! Oh, yeah, I will be voting for him in November!
#32 Dude,
The problem with relying on tax revenue with luxury items as a base is that it’s too unpredictable. People can easily choose to avoid a luxury purchase. We cannot avoid taxes on necessities.
The blood suckers in Austin and DC would never let that happen. They are too addicted to our money.
The point most folks are missing is that we should not argue whether it is best to rob Peter (businesses), or his brother (homeowners), to pay Paul (the taxman), it’s that we need to stop robbing Peter and tell Paul he will have to make due with less. Everyone assumes we have to come up with all the money, and that spending less is not even an option! True conservative leadership would cut property taxes and then cut the budget too. What is going on here????
A few facts:
the current yearly per-capita state tax burden is $1,472;
the state sales tax on a new $30,000 pick-up truck is more than the state average (yeah, I know, toddlers don’t drive);
one in 57 businesses currently file a franchise tax return; one in 16 actually have to pay; under the TTRC plan, one in 8 would actually pay (64.7 percent of current payers would receive a cut);
16 companies (you know who they are, AT&T, the major newspapers, Dell Computers) will pay almost 22 percent of the new burden
roughly two dozen large law firms (V&E, F&J, etc.) will pick up more than 9 percent of the new burden;
any incorporated business (or any company with a statutory liability protection) with less than $300,000 in gross receipts is exempt from the tax (the real figure, with either wages/benefits deductions of cost-of-production deductions, is about $770,000).
HB 3’s only real inequity is in the “compromise” reached with the medical community. The doctors could have been bought off with a simple $750 per year increase in their occupation tax (about $78 million per biennium) and staved off the “creative accounting” that HB 3 was designed to prevent.
I encourage everyone to actually read HB 3 (www.house.state.tx.us) and reach their own conclusion. Even though the bill is about 100 pages, more than half is just definitions and boilerplate stuff. The proposed Act is simple by tax law standards. For point of reference, the current franchise tax law — called the “stupid tax” because it is totally voluntary — is nearly 300 pages and contains more than 1,000 pages of Comptroller rules.
I’m a right-wing anti-tax conservative, yet I’m convinced that this is the best plan I’ve ever seen. Please review it yourself, and if you think I’m dead wrong, then so be it. But don’t take someone else’s word for it. (Also be VERY skeptical of your CPA’s opinion if the he or she is a LLP or PC.)
Follow-up to #14
It is with great surprise and delight that I just received a phone call from the floor of the House from my Rep. Dora Olivo (D) of Rosenberg in reply to my call of this morning. She was not aware of Paul Bettencourt’s and Dan’s presentations–bet she isn’t the only one who wasn’t. I asked her to please consider them.
Regarding the surplus, I used the analogy of going to the grocery store to buy a $12 item, paying with a $20 bill, and having the cahsier keep the change for the store instead of giving it back to me.
She was most courteous as was her office intern with whom I spoke this morning. I told her we have differing political views and that I’m a conservative in her district, but that should not keep us from agreeing to keep from punishing small business owners or any other taxpayer when the state is sitting on a huge surplus. She agreed property taxes are out of hand.
Would guess not many of her constituents are politcally active or aware of what’s going on in Austin. I also guess the minority of us conservatives in her district would not even try calling her in the belief she wouldn’t listen. That was not the case, and I hope she will decide to vote no on HB 3.
I’m looking at it Jimb, but I am not excited. I am against any new tax. That’s just the conservative in me! We have a surplus, we overpay tax bills as it is and we pay way too much in property taxes. Stop taxing Texans and see the money start rolling into the Texas government. You simply cannot enlarge the economy with increasing taxes. It is called trickle down economics. The more of a tax break citizens get, he more money goes into the state’s coffers. Simple! It worked for the feds (i.e., Reagan) just the same as it works for the states. Stop taxing production! It is counter- productive!
Hey, waitaminute! I think that jimbow (not equal to) jimb.
I’m with 43…
Oops, Sorry Jimb! My bad!