Back to basics

DallasBlog.com | Tara Ross:

“The final nail has been hammered into the Texas economy’s new coffin. On Tuesday, Republican leaders finished ramrodding the Sharp tax proposal through the legislature. The Texas Senate approved the plan, and the Governor is expected to sign the bill in relatively short order. Republican leaders will soon hit the campaign trail, claiming victory in the school finance battle. ... Passage of this legislation is anything but a victory. To the contrary, the Texas Republicans who supported this plan have violated the principles of economic conservatism that they claim to hold most dear.”

Ed Cognoski responds:

The arguments of Ms Ross are not compelling. They are a grab bag of inconsistency and illogic.

She argues against using business tax revenues to allow a reduction in property tax rates because property tax rates might go back up in the future. If Ms Ross wants to argue for more stringent caps on raising taxes, that's one thing. But opposing tax cuts now because they just might go up again later is misguided. Sensible people take their victory today and fight to hold it tomorrow.

Ms Ross praises property taxes for being broad-based. Even renters pay them, she assures us, as property owners pass their costs along to the renters. Business taxes are condemned for being narrowly based. This contradicts the usual conservative argument that businesses just pass along taxes to their customers. Ms Ross sees this effect in property taxes, which she favors, but conveniently overlooks it in business taxes, which she opposes. She even argues that small business owners won't benefit from property tax cuts because they rent! So much for property taxes being broad based.

Finally, she argues that business taxes are bad because they are "hidden" taxes. Well, a third of Americans don't live in their own homes. Their property taxes are hidden from them, so property taxes fail this test, too.

For some reason, Ms Ross vehemently opposes the Perry/Sharp plan to use a broad-based business tax to reduce property taxes in Texas. But she can't explain what those reasons are in a logical, consistent way.