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Zero Property Tax - Is This Possible?


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#1 Nitixope

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Posted 21 May 2021 - 01:21 PM

I've started hearing about doing away with the property tax system entirely in Texas.  Is this really a thing?  How big of a consumption tax are we talking about?

 

https://www.wfaa.com...ce-cf2b9a85d841

 

https://donhuffines....es#property-tax

  • Phase out the property tax system entirely 
  • Allow Texans to vote on a constitutional amendment that puts property taxes on a path to zero 
  • Place a stronger cap on state spending and then prioritize our budget to ensure that public schools are fully funded 


#2 UncaMikey

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Posted 21 May 2021 - 01:44 PM

A bad idea that is not very likely; the cure would be much worse than the disease.

 

According to the Comptroller's Office, property tax generated almost $70B in revenue in 2019; the state sales tax produced about $35B. The 'consumption' tax sounds like a VAT, but I can't imagine people accepting a sales tax burden more than three times what we have now. Such a high sales tax, 30% or more, would kill consumption. (Tripling the sales tax rate would not triple the revenue because people would buy less.)

 

In the world of tax policy wonks, ideal tax systems are built like a three-legged stool: income tax, property tax, sales tax. Each has advantages and disadvantages, complementing each other to create a stable revenue stream for government. Texas does not have one of the three legs, making our revenue system more unstable, and cutting out one of those two remaining legs would make things much worse, IMO.

Finally, basing all our revenue on consumption is very regressive, hitting poorer Texans much harder than those well off.



#3 Nitixope

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Posted 21 May 2021 - 02:25 PM

A bad idea that is not very likely; the cure would be much worse than the disease.

 

According to the Comptroller's Office, property tax generated almost $70B in revenue in 2019; the state sales tax produced about $35B. The 'consumption' tax sounds like a VAT, but I can't imagine people accepting a sales tax burden more than three times what we have now. Such a high sales tax, 30% or more, would kill consumption. (Tripling the sales tax rate would not triple the revenue because people would buy less.)

 

In the world of tax policy wonks, ideal tax systems are built like a three-legged stool: income tax, property tax, sales tax. Each has advantages and disadvantages, complementing each other to create a stable revenue stream for government. Texas does not have one of the three legs, making our revenue system more unstable, and cutting out one of those two remaining legs would make things much worse, IMO.

Finally, basing all our revenue on consumption is very regressive, hitting poorer Texans much harder than those well off.

 

Thanks for the info.  I sort of had that feeling this was wishful thinking and wondered how many people (rich and not rich) would find ways around the system or to game the system.  You'd probably see a lot more hand-to-hand cash transactions on services and some products, paying people under the table etc.  



#4 JBB

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Posted 21 May 2021 - 02:59 PM

Not to drag this too much into the political arena, but this is Don Huffines throwing out an insane proposal to make himself look more conservative than Greg Abbott.






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