Tuesday, July 12, 2005

All in the Name of Cutting Taxes – For Some

Tuesday, July 12, 2005

The Texas Senate works a very odd schedule these days. It convenes at 2 on a hot summer Sunday afternoon, but doesn't do anything for six hours. Then, senators walk in from backrooms, argue over a tax bill until 3:34 the next morning and finally vote something out.

Maybe they were just too embarrassed to do it in daylight.

The bill they passed is somewhat better than the House version. The Senate would raise the state sales tax by a half-cent per dollar, while the House would raise it by a full cent. Both would close loopholes in the state's franchise tax on businesses and raise the cigarette tax.

The Senate would also raise alcohol taxes by 20 percent.

All this is being done in the name of cutting school property taxes, which the House would cut deeper than the Senate.

But even with property tax cuts, which apply to businesses as well as homes, most Texans would pay higher taxes under either bill. The Legislature's own tax study of the House bill concluded that only households with an annual income of $100,000 or more would see a net tax decrease. Everybody else — 80 percent of Texas households — would see a net tax increase. That increase could be justified if it meant more money for public education or better public services, but it wouldn't.

A similar study was not done on the Senate bill because, said Sen. Steve Ogden, R-Bryan, chairman of the Senate Finance Committee, it would be misleading. We think it's safe to say that if he expected a result much better than the House measure, Ogden — who showed little enthusiasm for the bill, which he sponsored in the Senate — would have trumpeted the difference.

The Senate version at first had a proposal to expand a state business tax in exchange for more property tax relief, subject to voter approval. However, it was removed on a 15-14 vote, with Lt. Gov. David Dewhurst — who had favored the proposal — casting the deciding vote to take it out. He said that, realistically, opposition from Gov. Rick Perry and House Speaker Tom Craddick meant it had no chance of becoming law.

Perry's stout opposition also helped kill a proposed payroll tax in the House. Whatever his virtues or faults, the governor today stands unchallenged as the most effective business lobbyist working Capitol hallways.

A conference committee of House and Senate members is expected to negotiate a compromise for approval by both chambers and the governor.

But in looking over legislators' work so far, we have an alternative proposal, inspired by Rep. Dawnna Dukes, D-Austin, who missed a key House vote last week because she was in France. (She has returned.)

The Legislature should retreat to France, cheer bicyclist Lance Armstrong, enjoy the summer and leave Texas alone.

It just doesn't make sense to raise taxes on 80 percent of Texas households just to give the most affluent 20 percent a property tax break. (Unless you're running in the Republican primary in March.)

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