The death of the Texas economy

Musings from a p*ssed off stay at home mom

Medina is singing the populist tune by calling for the elimination of property taxes but appears to have no plan. It’s one thing to echo popular sentiment, it’s another to do the research, formulate solutions and then lead. Imagine the potential difference in Medina’s campaign if they actually had a workable plan that could be articulated on this issue.

What is the plan to eliminate property taxes?  Who has one?

Found this quote from Keith Gardner an economist here in the comments:

“neoclassical libertarians are just looking to scam the people with the foundation funded Austrian school of fraud and theft by proposing such absurdities that all property taxes should be eliminated in Texas and replaced with a sales tax on property so that the working class will not only have to pay taxes but will have to pay interest on it to the banks.”

Sorry but I’m not willing to jump on board the hot topic bus until many questions are answered….my mind does not allow me do that…I have to think through and rationalize the ramifications of a political action to support it.  The No Child Left Behind Act looked good on the surface but …

I’ve tried to find info from sources other than Laffer and so far have come up empty….looked at the Hoover Institute, John Locke Foundation, tried to find articles by Walter Williams on the subject…nada.

Laffer along with two other economists did the research and set the consumption tax rate at 14.5%.  Why would anyone buy in Texas with a 14.5% tax rate when Indiana only has a 5% tax rate?  Until that situation is resolved anyone advocating for this is advocating for the death of the Texas economy. To reduce the tax rate to 9% the consumption tax MUST be expanded (per Laffer) ….but expanded to what services has not been addressed.  Ramifications….

Are you aware California eliminated property taxes for seniors last year…. they are now broke.  They cut the income but not the spending.

The issue is spending so elimination of a tax before elimination of the spending…. well never seen a horse pushing a cart.

Many economists say the better action is to elect the appraisal board….make it a separate entity….cap property taxes….and then shore up weak legislation in regards to property owners.

I don’t know which is better because there is limited info on the subject and I don’t fully understand all of the philosophies that go into economics in regards to property ownership.  It is not a cut and dry issue on paying taxes means you don’t own the land.

We can agree to disagree.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Response by Texas Ranger

Dear PO Mom,

You are a very serious and rigorous thinker, and I applaud your devotion to solutions.  We will need to agree to disagree on this one…I have put some of my thoughts below, but we do have a basic philosophical difference on two counts, one general and one specific:

Generally:  I believe that no one is undertaxed, at any level.  I believe that de-funding government is the best way to get them to figure out how to spend less.  Trying to get them to declare in advance only leads to their dissembling and sabotaging any spending cut momentum.

Specific:  As I stated earlier, I believe that property taxes are antithetical to property rights.  Property is property.  Either you own it or you don’t.  The ultimate property is your person…how would you feel if the county/state had a ‘breather’s tax’…each year you get a bill for $5,000 from the county if you are alive and living in the county.  Don’t pay it, and go to jail.  Well…this is a tax on your property…just like the tax on your real estate holdings.  And let me get personal.  If you and your husband pay off your mortgage, and retire in your house, why should you have to pay the county thousands of dollars per year for the privilege of living in YOUR HOUSE?  Either it is yours or it isn’t, and in my opinion, property taxes mean it isn’t.

I don’t believe it is up to economists.  I think rent-paying is rent-paying.

To reduce the tax rate to 9% the consumption tax MUST be (per Laffer) expanded….but expanded to what services has not been addressed.

Again, this is taking one and only one potential alternative funding source and assuming that this is the only way to change the equation.  I disagree, and think it is hyperbole, in the way that only public employee’s unions can get hysterical, to call it ‘the death of the Texas economy’.  That is silliness.

Maybe the kinds of people that are attracted to a Texas without property taxes are property owners…maybe it is better for the economy because businesses have a much lower cost of operation…I agree that study is needed, and would like to see a plan, but I believe that the first step is some boldness in declaring Property taxes to be pernicious and antithetical to constitutional protections of property.

Are you aware California eliminated property taxes for seniors last year…. they are now broke.  They cut the income but not the spending.

I used to live in California, and let me tell you, they have been going broke for a very long time.  Prop 13 limited property taxes to 1% of value in 1978…and they have been screaming bloody murder ever since (32 years).  And they are broke because THEY SPEND TOO MUCH, not because there is not enough tax revenue.

The issue is spending so elimination of a tax before elimination of the spending…. well never seen a horse pushing a cart.

Yes, but if you want your children to spend less, you can ask nicely, or you can cut off their allowance. One way might work, and one way WILL work.

Many economists say the better action is to elect the appraisal board….make it a separate entity….cap property taxes….and then shore up weak legislation in regards to property owners.

You know where I am here…it isn’t a ‘fix it’ for me, because I am opposed to the concept.

Amen [to your agreement].

PS: I am willing to disagree with Leo Berman on the subject also!!

This discussion continues here…

Tags: property taxes, Texas