Texas GOP Forces Huge Tax Increases

It has been two decades since the Republicans seized control of the state government in Texas. Currently, there are no Democrats holding a statewide elected office (and haven't been for more than 18 years). The Republicans took control by promising not to raise taxes, and they have kept power by repeating that promise in every election since then. Have they kept that promise?

Not really. We know that they have raised all sorts of fees -- on everything from driver's licenses to hunting and fishing licenses. They have a certain kind of myopia that allows them to think fees are not taxes. That's ridiculous, of course, since anytime the government takes money from a citizen it is a tax -- whether they want to call it that or not.

But there is another way they have raised taxes on Texas citizens that most people don't realize. By refusing to raise taxes at the state level, and by cutting state services and the money the state provides to cities and counties for things such as public education (the state GOP leaders chopped $5 billion out of education funding in the last legislative session), they have forced counties and cities to raise taxes to make up for it.

And those raises have been huge. State Comptroller Susan Combs recently released figures showing that property taxes have been raised about 188% in the two decades since Republicans came to power. This is because of property taxes being raised and new taxing districts being created (that also get funding from property taxes). And most of this huge rise in property taxes has been because the state GOP leaders were more interested in playing politics that funding services for citizens.

Have the state Republican leaders kept their promises to not raise taxes. No. They have just hidden their failure by shifting the tax burden from the state level to the local level. But for citizens, does it matter whether the tax raise is a state one or a local one? No. It is still a tax raise, and that is all that matters.

There are some services that must be performed by government, and if the state refuses to do it, it must be done on the local level. A 188% rise in property taxes is a huge tax raise, and the blame for most of it rests with the state Republican leaders. They have failed to keep their promise, and they have done it in a very sneaky way.

Teabaggers Think Texas Taxes Aren't Regressive Enough

Texas already has one of the most regressive tax systems in the United States. There is no income tax. That's because it's far too progressive (with the rich having to pay a higher rate than the poor), and the Republican leadership in the state would never make the rich pay taxes. Although some state money is raised from a lottery and from license fees, the majority of state funds comes from two kinds of taxes -- a sales tax and a property tax.

The sales tax is easily the most regressive kind of tax, because it takes a much larger percentage of the income of the poor, working class, and middle class, than it does from the rich or from corporations. In fact, the lower your income, the larger percentage of that income is paid in sales taxes. You can't get anymore regressive than that.

The conservative mantra is that the poor don't pay property taxes because they don't own property. That sounds good, but it isn't true. Landlords pass on their property taxes to their renters, and businesses pass on their property taxes to their customers. So the truth is that no one avoids paying property taxes. However, the property tax is a bit more progressive than sales taxes, because the owner of a very expensive property will generally pay more in taxes than the owner of a property that is not worth very much.

And even a slightly progressive tax system is anathema to teabaggers (ultra-right-wing Republicans). And it seems that they have figured out that the property tax is a slightly progressive tax -- that taxes the mansion of a multi-millionaire more than it taxes the hovel of a poor person (even though both pay the same rate). The very thought of the rich (and corporations) actually having to pay taxes has sent them into a tizzy.

Led by their failed gubernatorial candidate, Debra Medina, Texas teabaggers have asked the state legislature to outlaw property taxes. Testifying before the House Ways and Means Committee, which is currently looking at tax fairness, Medina and her cohorts asked that property taxes be banned, and replaced with an "improved" sales tax and new business taxes. Now any observer of state government will know that the Republican leadership in Austin is not going to raise or create new taxes on businesses (because that might affect the rich, and would certainly affect corporations).

That means that the teabaggers are actually asking state government to replace the property tax with a bigger sales tax (either through a higher tax rate or a broadened tax base, or both). In effect, this would raise taxes on the poor and working classes while lowering them for the rich and corporations -- making Texas the absolute king of regressive taxation.

This is sheer insanity. But then sanity or common sense has never been a teabagger attribute.

Is Sarah Palin A Tax Evader ?

If you're a regular reader of this blog, then you know that I don't have a very high opinion of former Alaska Governor Sarah Palin. I think she is selfish, greedy and really not too bright. But I did think she would recognize that's she's made herself a very public figure and take care of the obvious things -- like making sure her taxes were paid.

It now looks like I was wrong about that. Evidently Palin has not been paying some property taxes she owes on property she and Todd own with a friend (Scott Richter) at Safari Lake in Alaska. The three own about 25 acres on that lake which is located in a fairly remote area.

Every few years, the tax assessors will do an aerial survey of the area. In the time between the surveys, property owners are expected to notify the assessor of any changes that might affect the value of the property. It seems that the Palins and their buddy Richter have neglected to do that.

At the time of the last aerial survey, the property had no improvements and was assessed at a value of $30,000. They have been paying $156.13 in taxes on that assessment. But since the last survey of the property, two cabins have magically appeared on the property and the tax assessor was not notified of this. That means no property taxes were paid on these cabins.

Now you may think these are some rather rudimentary hunting cabins that really aren't worth much. But if you think that, you'd be very wrong (see above picture). The "cabins" are actually large houses on lake-front property with all the amenities (including hot tubs), and there is also a shop on the property for snowmachines and four-wheelers. A similar house in the same area has been assessed at $229,000.

Palin's attorney says it is the responsibility of the tax assessor's office to figure out the property had been improved. He's wrong. There is a state law in Alaska that makes the property owners responsible for correcting any errors on their tax bill.

Palin knows the structures are there because she told Bill O'Reilly that it was her favorite vacation spot. Since she knew the improvements were made to the property, it was her responsibility to notify the tax assessor that her tax bill was not correct, and not correct by a substantial amount. With the two huge houses, the property is now probably worth 10 to 15 times as much.

I don't know why millionaires like Sarah and Todd Palin would try to evade paying their appropriate property taxes, but that looks like exactly what they did.

Making the matter even worse is the fact that this makes Sarah a huge hypocrite. In 2004, Palin refused to do a TV-ad for Republican Rep. Vic Kohring because he had $2,277 in unpaid property taxes. I guess the rules are different when it's her own property.

The more I learn about Sarah Palin, the sleazier she seems.

Burnam Proposes Fairer Texas Taxes

To hear Republicans talk, a person might think Texas is a low-tax state. It's not true, but the Republicans like to say it anyway. They think they can get away with the spurious claim because Texas doesn't have an income tax, and to Republicans, taxing income is evil.

But while Texas is not a low-tax state, it is a state that loves regressive taxes. Texas has some of the highest consumption taxes and property taxes of any state in the union. These taxes hit the poor, working and middle classes the hardest, while giving the rich virtually a free ride. The taxes take a huge bite out of the income of those making less than $100,000, but comprise an insignificant portion of the income of the rich.

Of course, this is exactly what the Republicans want. They aren't interested in keeping taxes low -- except for their rich buddies. Here in Texas, Republicans have a long history of favoring corporations over citizens and the rich over regular folk.

But there is a legislator that would like to change all that, and make Texas taxes fairer for everyone. Representative Lon Burnam (D-Fort Worth) has proposed a progressive income tax for Texas. The tax would only be applicable to those who make over $100,000 a year.

Burnam says, "Not only do we have a tax system that is unfair on the working middle class, it doesn't generate enough funds for whatever we need to do. So, I filed this income tax bill that is selective. All it proposes to do is an income tax on income in excess of $100,000 and the thing is that most working people don't make that much."

He goes on to say, "It starts at a level that, yes, where you have double income households that have good professional jobs it is likely that you'll pay a little more of tax if you make more than $100,000. But you know what? Everybody can live on $100,000 a year and many of my constituents don't have enough to live on and they're paying a much higher percentage of their income in taxes than the people who make $100,000 a year. It is not fair, it is not right."

The best thing about the proposed tax is that it makes sense. It affects only those who can afford to pay, and would bring in enough money to allow cuts in the other regressive taxes. It other words, it would makes Texas taxes fairer for everyone.

But as good as this sounds, it has almost no chance of happening. The Republicans are still in charge of our state government, and as long as they are, the rich will not be made to pay any significant taxes. The proposal probably won't even make it to the floor for a vote.

Thank you anyway Rep. Burnam. You keep the dream of fair taxation alive in Texas.

Big Business And Tax Avoidance

We have all heard of the many things that corporations do to try and avoid paying their fair share of federal income taxes. Some corporations are so successful in this that they wind up paying very little or no income taxes at all. What many don't know is that these big businesses are trying the same thing on the state level.

Texas doesn't have a state income tax. Texas raises its funds mainly through a very regressive state sales tax and through property taxes. Although many businesses brag about how much they bring in for the state through the sales tax, the truth is that it is not business that pays the bulk of this tax -- it is the consumer.

The tax that hits business the hardest in Texas is the property tax. After all, most big businesses own the property that their business sits on. It should come as no surprise that this is the tax that business fights the hardest in Texas.

Most corporations (and some home owners) are paying less in property taxes this year. That is because the Republican leadership in this state cut property taxes in the last legislative session to help their corporate buddies. You didn't actually think they did that for home owners, did you? While home owners got a small tax cut, the cut added up to big money for the corporations.

But that was not good enough for the corporate powers that be. A new study shows that most large businesses in Texas challenge their property tax appraisals EVERY YEAR. Take Wal-Mart for example. At least 83% of their stores in Texas challenge their appraisals, compared to 35% of their stores in other states.

These corporations just consider this to be good business practice. Even if they are unable to get their appraisal lowered in a certain year, it serves notice on appraisal districts that they will fight every year and inhibits the willingness of these districts to raise their appraisals for these businesses.

They do this in spite of the fact that most are appraised too low, because the appraisal districts do not have access to the sale price of the property. These districts can easily find the sale price of a home because that is public record, but the sale price is usually excluded in huge corporate deals and there is no state law that requires them to reveal it.

Of course, the corporations will tell you they fight the property taxes because Texas has one of the highest propety taxes in the nation. That is true. But what they don't tell you is that when all taxes are considered, Texas is in the lowest one-quarter of states in terms of total taxes.

Texas could pass a state income tax and lower its property taxes, but most Texans would not support that, and these same businesses would then search for ways to avoid the income tax (as they do on the federal level). The truth is that they just don't want to pay taxes.

No one enjoys paying taxes, but most of us recognize that they are necessary to fund required government functions. Even big business would admit that taxes are necessary -- they just want the burden to fall on the middle and working classes, and not on the rich and the corporations (where it belongs).