Senate vote on Perry/Sharp tax plan today
by David Benzion · 05/01/2006 9:49 amThe Texas Senate is due to vote today on the Perry/Sharp tax plan, and CLOUT has e-blasted to its members the following letter from Steven Hotze, Co-Chairman, Texans for No New Taxes:
Dear Senators,
During my testimony before the Senate Finance Committee Hearing on April 28, 2006, I exhorted the members of the panel to send the Schedule B Tax Form to every Texas business affected by the Perry/Dewhurst Business Tax in order to get feedback from individual business owners as to the effect that this tax would have on their businesses.
Brochure to Political DonorsThe attached brochure was printed, mailed to and received this past Friday by 10,000 political donors who had contributed $1000 or more to any Legislator, the Governor, Lt. Governor or Speaker. Why don’t you give them a call to ask them what they think about this onerous business tax before you vote to tax their income?
Wouldn’t this be this be the right, honorable and fair thing for you to do? This session has 17 more days. Why should you allow the Governor or Lt. Governor to ramrod this inequitable, ill-conceived margins tax through the Senate now? No other state has a margins business tax, and for good reasons, yet Governor Perry and Lt. Gov. Dewhurst are attempting to force this through the Texas Legislature within the first 2 weeks of this Special Session.
Slow the train down and seek voter counsel
The Texas Senate meets as a deliberative body, that judiciously measures the ramifications, and the potential unintended consequences, of its actions.
Wouldn’t it be prudent to slow down the process and take time to contact your supporters who have placed their confidence and hope in you before you take action on HB 3? Why don’t you send the Schedule B Tax Form to every person who has worked in or contributed to your campaign and ask for their feedback? Ask them if they want you to enact this new and permanent business tax in Texas.
No other state has a Margins Tax
House Bill 3, being pushed by Governor Perry and Lt. Governor Dewhurst, is a Margins Tax. Texas would be the only state in the nation with a Margins Tax on businesses. There is a reason for that. The Margin Tax is onerous because it is inherently inequitable. It does not treat businesses fairly or equally. There are innumerable types of businesses with different types of expenses affecting what constitutes their gross margin. The Margin Tax would apply to all businesses, whether or not they make a profit. The Federal Government does even tax a business if it loses money. Why should Texas?
HB 3 is an end run around the Texas Constitution
It is obvious to all unbiased observers that House Bill 3, the Perry/Dewhurst Business Tax, is a deceptive and dishonest end run around the State Constitution’s prohibition against a state income tax. This has been intentionally done by the Governor to prevent Texans from exercising their constitutional right to vote on this new tax. No matter what you say, the margins tax would be a tax on business income. It cannot be otherwise. The margins tax would be paid from a business’ gross income. The old adage still holds true, "Honesty is the best policy." This business tax would adversely affect all Texans because it is a hidden tax which would inevitably raise the cost of goods and services to the consumers. Texans should be given the right to vote in a statewide election as to whether or not they want this tax. This would the honest thing for you to do.
Huge business tax increase
The Perry/Dewhurst Business Tax would be the largest tax increase in the history of Texas. The property tax reduction proposal, which only applies to school property taxes, is so minimal that most businesses would invariably pay hefty new taxes. Even those businesses that pay Franchise taxes would have their taxes raised 400%. This is not a reduction in the tax rate for corporations as claimed by the Governor. A 1% tax on margins is significantly more than the 4 1/2% tax on income. In order for any business to benefit, it would have to have enormous property holdings and low gross receipts. This is not the case for any but a few large corporations. So HB 3 would benefit the huge corporations while decimating the small businesses that fuel the economic engine of our Texas economy.
Minimal Property Tax Reduction
Paul Bettencourt, a Republican and the Harris County Tax-Assessor Collector, has stated that the average home owner in Harris County would receive only a $15 savings in property tax in the first year when the 7% increase in appraised property value is taken into account. This is so minimal that no homeowner would ever notice the difference. But the small businesses would be crushed by the Perry Business Tax.
Solution
HB 1 solves the immediate problem with the State Supreme Court. The property tax reduction under HB 1 would not change in the first year whether or not the HB 3 is adopted. HB 3 would not kick in until year two. So why not just pass HB1 and allow the 80th Texas Legislature to deliberate on the proposed Perry/Dewhurst Business Tax and its ramifications? This seems to be the prudent option. HB 3 creates an enormous problem for the Texas economy in the future. If HB 3 were to pass, then Texas business owners will be shocked when they find out what their business tax will be, and those who voted for this tax will invariably be taken to task in upcoming elections. It will be my goal to organize the small business owners across the state to make sure that this happens.
HB 3 would be a disaster for Texas businesses, the Texas economy, Texas families and individuals.
The Perry/Dewhurst Business Tax would be the largest tax increase in the history of Texas and it would be permanent.
The property tax reduction would be temporary. Without appraisal caps the promise of meaningful property tax reduction is worthless.
The Texas Senate and Legislature should pass HB 1 and leave town.
Thanking you in advance for your consideration of my ideas, I remain, as always,
Sincerely yours,
Steven F. Hotze, M.D.
Texans for No New Taxes
20214 Braidwood, Suite 215
Katy, Texas 77450
281.698.8679
www.texansfornonewtaxes.org
Feel free to use the names, phone numbers and emails provided below to make your voice heard in Austin.
Lt. Gov. David Dewhurst | 512-463-7596 | bruce.gibson@ltgov.state.tx.us
SD 1 Sen. Kevin Eltife | 512-463-0101 | kevin.eltife@senate.state.tx.us
SD 2 Sen. Robert Deuell, M.D.| 512-463-0102 | bob.deuell@senate.state.tx.us
SD 3 Sen. Todd Staples | 512-463-0103 | todd.staples@senate.state.tx.us
SD 4 Sen. Tommy Williams | 512-463-0104 | tommy.williams@senate.state.tx.us
SD 5 Sen. Steve Ogden | 512-463-0105 | steve.ogden@senate.state.tx.us
SD 6 Sen. Mario Gallegos, Jr. | 512-463-0106 | mario.gallegos@senate.state.tx.us
SD 7 Sen. Jon Lindsay | 512-463-0107 | jon.lindsay@senate.state.tx.us
SD 8 Sen. Florence Shapiro | 512-463-0108 | florence.shapiro@senate.state.tx.us
SD 9 Sen. Chris Harris | 512-463-0109 | chris.harris@senate.state.tx.us
SD 10 Sen. Kim Brimer | 512-463-0110 | kim.brimer@senate.state.tx.us
SD 11 Sen. Mike Jackson | 512-463-0111 | mike.jackson@senate.state.tx.us
SD 12 Sen. Jane Nelson | 512-463-0112 | jane.nelson@senate.state.tx.us
SD 13 Sen. Rodney Ellis | 512-463-0113 | rodney.ellis@senate.state.tx.us
SD 14 Sen. Gonzalo Barrientos | 512-463-0114 | gonzalo.barrientos@senate.state.tx.us
SD 15 Sen. John Whitmire | 512-463-0115 | john.whitmire@senate.state.tx.us
SD 16 Sen. John Carona | 512-463-0116 | john.carona@senate.state.tx.us
SD 17 Sen. Kyle Janek | 512-463-0117 | kyle.janek@senate.state.tx.us
SD 18 Sen. Kenneth Armbrister | 512-463-0118 | kenneth.armbrister@senate.state.tx.us
SD 19 Sen. Frank Madla | 512-463-0119 | frank.madla@senate.state.tx.us
SD 20 Sen. Juan "Chuy" Hinojosa | 512-463-0120 | juan.hinojosa@senate.state.tx.us
SD 21 Sen. Judith Zaffirini | 512-463-0121 | judith.zaffirini@senate.state.tx.us
SD 22 Sen. Kip Averitt | 512-463-0122 | kip.averitt@senate.state.tx.us
SD 23 Sen. Royce West | 512-463-0123 | royce.west@senate.state.tx.us
SD 24 Sen. Troy Fraser | 512-463-0124 | bill.scott@senate.state.tx.us
SD 25 Sen. Jeff Wentworth | 512-463-0125 | jeff.wentworth@senate.state.tx.us
SD 26 Sen. Leticia Van De Putte | 512-463-0126 | leticia.vandeputte@senate.state.tx.us
SD 27 Sen. Eddie Lucio, Jr. | 512-463-0127 | leann.gallegos@senate.state.tx.us
SD 28 Sen. Robert Duncan | 512-463-0128 | robert.duncan@senate.state.tx.us
SD 29 Sen. Eliot Shapleigh | 512-463-0129 | eliot.shapleigh@senate.state.tx.us
SD 30 Sen. Craig Estes | 512-463-0130 | craig.estes@senate.state.tx.us
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13 Responses to “Senate vote on Perry/Sharp tax plan today”Search
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Waiting for Eric to defend the RINOs on this. I think the letter above spells it out nicely.
I just sent my email to Tommy Williams reminding him to keep Dan Patrick’s election in mind. ‘Nuff said. Of course he’s a RINO and won’t pay any attention until somebody decent runs against him.
JimB
Texas is 50th instate and local tax burdens according to this
http://www.census.gov/govs/statetax/04staxrank.html
Gov Perry wants to spread the tax around fairly, I’m sorry Dan and his business owner friends don’t get a free ride anymore
Eric Johnson
#3
I am going to exscuse that comment on the grounds of your location and possible restricted access to comments made by Dan Patrick and “his business friends”.
Dan Patrick amongst others have no problem with a business tax and has said as much. Before you criticize Dan Patrick again I would strongly suggest that you LISTEN to his show 4pm - 6pm local times and get your facts straight about the man’s stance. Edd Hendee can be heard 6am - 9am M-F. I have provided a link below that you may listen online.
http://64.62.253.55/ksev700
One thing that drives the number down is the non-taxpaying illegals who work under the table. They get counted for the census, but WE pay the tax, so the law-abiding citizens pay for 2 texans, which probably makes us number one in taxes, if you only include taxpayers.
Not to worry, our leges do not care about any of us. They will continue to poke us in the eye with sharp sticks until we throw them out of office.
RE: # 5:
This is not totally on-topic, but the House adopted an amendment (by Anchia) that would prohibit an employer from deducting the labor costs of an employee who lacks legal status. The amendment (which no lobby group worked for or against) was adopted almost unanimously and remains in the Senate bill, which cannot be amended on the floor.
RE#7:
And who is going to go around and determine whether employers are complying or not–i.e. whether each employee whose wages are deducted is legal or illegal. You’d have double the State budget just to try to enforce that amendment.
Who has the tar and feathers ready?
The Comptroller of Public Accounts and in some cases the Texas Workforce Commission.
For the record, I was simply making a factual comment on what’s in the bill. I have no dog in the fight and nothing to do with it. Please don’t shoot the messanger just because the Chronicle, etc. doesn’t report it.
Eric - I don’t care if Texas has the lowest tax burden in the free world. I think a margins tax is a horrible idea, and if we’re going to tax businesses more, then we need to find a different way. Further, the proposed reductions in property taxes are weak enough that the there is no real tax relief to speak of.
Finally, without real property tax relief, the state gets to effectively “double dip” in the next few years and we’ll be worse off than before.
Trust me, this is NOT spreading the tax around fairly, but I don’t know why I am bothering to say this to you…
Squawk, jimB
I’m fully well aware of what Dan is saying, I have been in contact with his staff
First look at the budget proposed by Perry, spending is being cut
Second look at the form, it is NOT a margins tax ita a modified VAT tax that is nominal, BTW everyone legally pays a VAT tax its called Social Security
Third look at the TNT Website - what is the characteristic of the board of directors - they stand to have to pay
So these facts makes anything they say very very suspect
Steve Holtze is a millionaire, just like other millionaires he’s well aware of how to manipulate the system
He’s lost part of that flexibility
Dan pays how much business tax? 0
Will Dan have to pay a Business tax? Yes
Does Dan’s business make money in the state? YEs
Also Jimb, except in the oil rich middle east we may quite possibly have the lowest taxes in the world
What I think is that if its good enough for ag-busines’s to pay taxes its good enough for Dan
Also its good enough for the homeowners to get some tax relief
also dan’s work is cut out for him to get appraisal caps in or eliminate the property tax altogether
Another thing the franchise tax is deductible from their Federal Tax return 1120 or 1120s - something they neglected (deliberately) to mention
Its these things like that those unmentioned things that only a small percentage may know that are left out let me think they may not be truthfull
The Hyprocrasy of it is that I don’t hear Dan and Steve wanting to get rid of those who pay the Franchise tax, Dan has had years on the Radio to tout the unfairness of the tax, well he never thought it was unfair
UNTIL HE HAS TO PAY
Eric Johnson,
Dan and Steve have always been against the Franchise tax. They put time and money into Republican Candidates to go to Austin and repeal the Franchise Tax. If you look at the Platform of the Republican Party of Texas for the past 10 years, they have been adamant that it is in the best economic interest of Texas to repeal the Franchise Tax.
Unfortunately for Steve and Dan, those “Republicans” that they helped get elected went to Austin and did the exact opposite - they authored a more expansive business tax.
YOU DON’T TAX YOUR STATE INTO PROSPERITY.
This is nothing more than a tax that will be passed on to the citizens of Texas and cost people their jobs. This is bad for Texas and worse for the Republican Party.