Dispelling the myths about a state income tax
August 30, 2005
A state income tax in Texas would raise the revenue needed to provide for quality teachers, early education and great schools.
Written by Senator Shapleigh, www.shapleigh.org
DISPELLING THE MYTHS ABOUT A STATE INCOME TAX
1. An Income Tax is Banned by the Texas Constitution. NOT TRUE. Knowing that an income tax might be needed, the Bullock Amendment in Article 8, Section 24 of the Constitution controls how an income tax must work if enacted in Texas. The Bullock Amendment states that an income tax can only be enacted by a vote of the people, and that two-thirds of revenue raised has to be dedicated to property tax relief, and the remaining revenue has to be dedicated to education.
2. An Income Tax Requires A Super-Majority Vote in the Legislature. NOT TRUE. The Bullock Amendment states that, in order to send an income tax to the voters for approval, the Legislature must follow the same process as for any other bill.
3. If an Income Tax is Passed the Legislature will just keep increasing the rates. NOT TRUE. If approved by the voters and as detailed in the Bullock Amendment an income tax would be the only state tax that allows voters to control the rate. Any increase to the rate would require an approval by the voters. Bullock knew taxpayers would demand protection - and we've got it in our state constitution.
4. An Income Tax is Bad For Business. NOT TRUE. 43 states in the nation have an income tax. If the absence of a state income tax was such an attraction, nearly all business expansions and relocations would be coming to Texas. But Michigan and Ohio have won the Governor's Cup for the most business expansions for the past 5 years and they both have an income tax. To a businessperson, two areas are more important than all others: infrastructure and education. Being ranked 50th in the nation in high school graduates is bad for business. An income tax is not.
5. The Lottery takes care of paying for education. NOT TRUE. The State Lottery is totally dedicated to paying for public education. But the approximately $1 billion in Lottery revenue pays for only six school days of the $30 billion state education budget.
6. An Income Tax Will be Just Added to the Other Taxes We Have to Pay. NOT TRUE. The Bullock Amendment dedicates two-thirds of income tax revenue to property tax relief, which could reduce school property taxes to as low as 15 cents! An income tax , combined with property tax cuts, would create tax savings for 70% of Texas families.
HOW WOULD A STATE INCOME TAX WORK IN TEXAS?
The guidelines for a state income tax are in Article 24, Section 8 of the Texas Constitution. If Texas enacts a state income tax, the Texas Constitution requires that:
1. An income tax to be approved by a vote of the people.
2. Two-thirds of revenue raised has to be dedicated to property tax relief.
3. The remaining net revenue has to be dedicated to education.
4. Any increase in the rate also has to be approved by a majority of the voters.
Every child in the state deserves an excellent education. After two-thirds of the revenue is dedicated to property tax relief, the remaining revenue of a state income tax has to be dedicated to education. A state income tax in Texas would raise the revenue needed to provide for quality teachers, early education and great schools.
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