Regressive Reform

Texas Observer Blog | Matthew C Wright:

“Now here’s a bill that deserves to slip through the cracks, never to see the governor’s pen, as the session nears the finish line: SB 407, allowing local voters to approve a reduction in property taxes offset by an increase in the sales tax. ... The faith-based group Texas Impact explains: 'SB 407 represents a continuing shift away from taxes based on wealth onto taxes linked to consumption, which inherently puts a greater burden on lower- and middle-income working families.' ”

Ed Cognoski responds:

Mr Wright and Texas Impact have it exactly right. The result of this bill would be a more regressive tax system. The wealthy would benefit the most. The poor and middle-class would end up paying more in taxes. The reason this can be sold to the public at all is because that property tax bill that arrives in your mailbox every year is very visible and very painful. Sales taxes, on the other hand, nickel and dime you to death, rarely big enough to notice or hurt.

Still, I really can't bring myself to fight this proposed bill. It doesn't actually swap property taxes for sales taxes. It only empowers local governments to do that, with approval of local voters. Empowering voters is, in general, a good thing. Yes, those voters can sometimes be persuaded by demagogues to do stupid things. But dictators do stupid things, too. If I have to live with stupid rules (and sometimes, I'm afraid, that's just what we're doomed to do), I'd rather live with the stupid rules imposed by my neighbors and myself than those imposed by Austin or Washington.

So, I won't lobby for this bill, but I won't be too vocal in my opposition, either. I'll save my opposition for those local referenda, if and when they come, that propose to swap the property taxes on the wealthy for those sales taxes on the poor and middle-class.