HB 1050 - Ad Valorem Tax Reform

[parabelum]

Very well put TAM, and good points Papa_Tiger.

[Ruark]

Another barrier to something like this getting passed is the idea of totally restructuring the entire Texas education funding system. Not too many people ready to dive into that abyss.

That being said, property taxes are probably the ultimate example of unfairness. People who don't own property, or who rent or live with roommates (or, heaven forbid, with their parents) get out of it, while enjoying all the benefits thereof. Our county tax appraisal inspectors watch the area like eagles, especially using Google Satellite View. Put a little storage shed out there, here they come with their measuring tapes, wanting you to pay taxes on it.

We also pay taxes to two different counties. Our property is in Lampasas County, but it's also within the boundaries of a school district that's in Coryell County, so we pay property taxes to both counties. What a racket.

[RoyGBiv]

When you pay rent to a landlord or apartment complex owner, you can bet that property tax is part of the rental amount. Somebody is paying the government that tax, even when it's not directly paid by the renter.

Now kids living in my basement (I wish I had a basement) is a completely different story.

[Flightmare]

When you pay rent to a landlord or apartment complex owner, you can bet that property tax is part of the rental amount. Somebody is paying the government that tax, even when it's not directly paid by the renter.

Now kids living in my basement (I wish I had a basement) is a completely different story.

Additionally, investors/landlords do not get the benefit of a homestead exemption on rental properties. That reduces the amount of taxes owed when all is said and done, and limits the appraisal increases.

[RoyGBiv]

Texas not having an income tax makes it a great place (financially) to live when you are working, but the high property tax rates make it an expensive place to live when you retire. Even with some additional exemptions and freezes for older folks, when you quit working you can substantially improve your cash flow by relocating to a State that has lower property taxes and higher income taxes.. Of course not everyone can or wants to pull up roots when they retire...

Not sure what the fix is.... schools suck up a lot of tax dollars.

[Pawpaw]

schools suck up a lot of tax dollars.

... and return next to nothing except a bunch of snowflakes who are well qualified to say, "Do you want fries with that?"

[Papa_Tiger]

Another barrier to something like this getting passed is the idea of totally restructuring the entire Texas education funding system. Not too many people ready to dive into that abyss.

That's the beauty of the way the bill is written. Pass it now, and it doesn't repeal the current system until 5 years from now. That gives the legistlature 2 more sessions to figure out how to replace it. Get the clock ticking and work hard to come up with comprehensive reform in the mean time.

[Lynyrd]

Consumption tax, even though I could see it impacting business/economy.

I thought about that, and it is a valid concern. On the other hand, it would have two salutary effects:

1. If I'm not spending $6,352 a year just to stay in a home I already own outright, I have that much to spend on other things.......if I want to spend........thereby contributing to the overall economy. For example, if I had had an additional $6,300 to spend when I bought my car, I might have bought the next model up (4Runer TRD Pro), thereby contributing that much more money to the economy. Right now, my property tax money is just a hole in the ground, and I have zero say over how much tax I have to pay, or how it is spent after I've paid it.
2. The poor and/or the property-less can still avoid paying most taxes by not spending money frivolously on $500 sneakers and 55" TVs unless it is well within their means to do so without becoming a drain on society. As long as (1) food sales are not taxed, and (2) unhealthy consumables like soda pop and potato chips ARE taxed as "not food"; those without property and/or the poor are forced into spending wisely to avoid paying taxes. In the process, they will be forced into improving their own circumstances and health.

While you're planning this out, how about an exemption for guns and ammo?

[bblhd672]

schools suck up a lot of tax dollars.

... and return next to nothing except a bunch of snowflakes who are well qualified to say, "Do you want fries with that?"

I know that what I'm about to say amounts to sacrilege in Texas but here goes...how about not building 50-70 million dollar football stadiums for high schools? I understand "Friday Night Lights" and all that, but at some point common sense about public spending must take precedence over sports activities.

Please don't start telling me about the amount of revenue the football program generates...it isn't the point of high school.

[flowrie]

I agree, no more $50m to $70m football stadiums.
Go with consumption tax.
So long as there is a property tax, then you are never really "free".

[Pawpaw]

schools suck up a lot of tax dollars.

... and return next to nothing except a bunch of snowflakes who are well qualified to say, "Do you want fries with that?"

I know that what I'm about to say amounts to sacrilege in Texas but here goes...how about not building 50-70 million dollar football stadiums for high schools? I understand "Friday Night Lights" and all that, but at some point common sense about public spending must take precedence over sports activities.

Please don't start telling me about the amount of revenue the football program generates...it isn't the point of high school.

I could not agree with you more. When I was in high school, it was a big deal when our team got to go play a game in the Cotton Bowl. That was the big time!!!

[The Annoyed Man]

Texas not having an income tax makes it a great place (financially) to live when you are working, but the high property tax rates make it an expensive place to live when you retire. Even with some additional exemptions and freezes for older folks, when you quit working you can substantially improve your cash flow by relocating to a State that has lower property taxes and higher income taxes.. Of course not everyone can or wants to pull up roots when they retire...

Not sure what the fix is.... schools suck up a lot of tax dollars.

This is actually something we are looking at. We will be buying rural land somewhere in the next 3-5 years, and I am looking real hard at Arkansas and Oklahoma. Arkansas's property taxes are, on average, 1/3 of Texas's, and Oklahoma's are on average about half of Texas's. (SOURCE) Almost all of my retirement income is non-taxable (taxes have already been paid on it), so income tax or not, it won't really affect me that much.

I love living in Texas. Texas has been very good to me, and has accepted me like one of its own. But the property taxation is way too high. Heck, I paid less tax in California.......on a home that, at one point, was worth 3X what I paid for it.

[Jusme]

Consumption tax, even though I could see it impacting business/economy.

I thought about that, and it is a valid concern. On the other hand, it would have two salutary effects:

1. If I'm not spending $6,352 a year just to stay in a home I already own outright, I have that much to spend on other things.......if I want to spend........thereby contributing to the overall economy. For example, if I had had an additional $6,300 to spend when I bought my car, I might have bought the next model up (4Runer TRD Pro), thereby contributing that much more money to the economy. Right now, my property tax money is just a hole in the ground, and I have zero say over how much tax I have to pay, or how it is spent after I've paid it.
2. The poor and/or the property-less can still avoid paying most taxes by not spending money frivolously on $500 sneakers and 55" TVs unless it is well within their means to do so without becoming a drain on society. As long as (1) food sales are not taxed, and (2) unhealthy consumables like soda pop and potato chips ARE taxed as "not food"; those without property and/or the poor are forced into spending wisely to avoid paying taxes. In the process, they will be forced into improving their own circumstances and health.

I have no problem paying a higher sales tax, for non-necessity items, like food, water, etc. Our massive consumerism society telling everyone they need the newest cell phones, 3D TV, haute couture clothing, etc, has created this leftist, elitist, entitled attitude. A pair of pants, should not cost any more, because some billionaire designer put their name on them than a pair with no name. Higher consumption tax, will create a much more competitive market for these things than anything else.JMHO

[Liberty]

Sales tax as they are now, encourages Texans to spend their money through the interwebs at non Texas companies. I have even slowed down my Amazon purchases because of the Taxes... That 7-8% makes a big difference in my purchasing decisions. These days I find very little reason to go to wally world and Target or even Home Depot. and make almost all my choices over the Interwebs,, and almost completely avoid Texas companies.

[ninjabread]

A pair of pants, should not cost any more, because some billionaire designer put their name on them than a pair with no name.

Yes they should! Anybody fool enough to pay extra for the designer name deserved it.