Question About Taxes in Texas

[The Philosopher]

If Texas is supposed to have such low taxes that we're drawing companies to do business here and whatnot from other states, what is Texas' tax rates in comparison to other states? Is it possible to raise the rates enough to remain lower than other states (and thus not even have to touch the Republican talking point about taxes) and yet bring in extra revenue?

[northoftheborder]

1. Don't know comparison, but...

Texas does not have an income tax. Raises money by sales tax, lottery, oil & gas revenues from state lands, a business tax; somebody else with a more complete answer? State gives a lot of tax concessions as inducement to move companies here, but I think all states do that.

[hobbit709]

2. Low taxes for business, no rights for workers.

Increased fees for those least able to pay them. My attitude is that any fee paid involuntarily is a tax no matter what you call it. From the state to the local government level, fees for everything have climbed because of the holy "No new taxes" mantra.

[sonias]

3. Comparison between the states

It is possible but very unlikely. Remember they painted themselves into a corner very early and continue to keep chanting - "no new taxes". Their own tea party wing of the Texas Republican party will never stay quite about raising taxes, especially for businesses. Business is their one true god. :shrug:

Texas supposedly ranks 13th in business climate among the states.
Tax Foundation web site (A very conservative web site)
State Business Tax Climate Index Rankings, 2006 - 2011


A short video interview with the head budget people in the Texas Senate - they know they have a problem - big time:

Texas Tribune 4/5/11
Senate Leaders: Texas Must Address Structural Deficit

Texas needs to address its structural deficit during the current session or it will face even deeper financial problems in two years than it faces today, Senate leaders said Tuesday afternoon.

[plumbob]

4. I will never understand why anyone thinks state taxes matter.

For a business, they're deductible from their federal taxes anyway, so if your company made money, you pay no net state tax of any kind in any state.

Now, the huge welfare checks that Texas writes them for cash, those are attractive. Unfortunately, they just take the money and run.

Real truth is, if your area is not suited for that business, no subsidy can make up the difference. That's why there are no docks in Odessa to unload tanker ships.

[ParkieDem]

6. They're deductible, not creditable.

Big difference.

[ParkieDem]

5. Property taxes are generally high.

Texas has always made up for its lack of income tax with a high property tax and relatively high sales tax. There are tons of exemptions on property taxes, though (homestead, agriculture, senior citizens). I have never seen an analysis of how progressive or regressive property taxes are, though. Given all the exemptions for homestead and the over-65 exemption, my guess is that they're pretty progressive around here (imagine that!)