Yesterday, House Republicans announced a plan to pass more than $4.8 billion in tax breaks. Using a combination of a sales tax reduction and a business tax cut, this plan would go even deeper than what the Senate proposed a few weeks ago (in case you missed my earlier email on this topic, click here).
According to the early math, the House plan would mean about $172 more each year for the average family of four. This would come from reducing the state sales tax — which would go from 6.25% to 5.95%. This is something that’s never been done before, and something I could be willing to support, because it would benefit all Texans.
With that said, I still strongly believe that before we reduce revenue through cuts, we must ensure our state’s priorities are addressed. As it stands now, there’s more than adequate money to do both. As I mentioned in last week’s rundown of the budget, at the end of the 2017, we will have $11 billion in the Rainy Day Fund, plus we still have up to another $8 billion right now in general revenue that is unbudgeted.
Immediately following yesterday’s announcement by the Republicans, I joined two of my colleagues, State Representatives Trey Martinez Fischer and Sylvester Turner, at a press conference and I shared these thoughts:
There’s been a lot of talk among Republican leaders about which tax cuts Texans will ‘feel’ the most and which will be best to stimulate our economy — business tax cuts, property tax cuts or sales tax cuts.
We look forward to that debate, but here’s what we do know Texans will ‘feel’ — parents will feel the positive impact of full-day Pre-K, if we do the right thing and fund it. The one out of four Texans who are uninsured will feel the impact of affordable health insurance, if the Legislature does the right thing. And college students would certainly feel the impact if we fully fund college financial aid.
All of those things would make a real impact in the lives of millions of Texans and do more to grow our economy over the long-term.
Interestingly, this announcement about the Republican tax cut plan came a day after a measure was presented in the House Ways & Means Committee, which would give a tax break to wealthy Texans who want to buy a yacht (and no, I am not kidding). During the same hearing, we heard a push for a tax exemption for remodeling personal aircraft and proposals that would create a sales tax holiday for hunters purchasing guns and ammunition.
Those three proposals alone would mean over $17 million in lost revenue for the state ($10.3 for the yachts, $3.5 million for the planes, and $3.6 million for the guns). These are just a few examples of many such proposals, and the lost revenue would be in addition to the $4.87 billion in tax cuts mentioned above.
Before we start giving out tax breaks to wealthy yacht owners and people with private planes, or before we try to “out tax cut” the Senate, I still believe we must first address our state’s real priorities and needs — education, transportation and health care.
