For years, our legislators in Austin have promised property tax relief, but they delivered little more than half-measures and assurances for more property tax rate cuts later. Sure, they have increased the homestead exemptions, and exempted retirees, but that doesn’t solve the problem. In many cases, it makes it worse! They are not advocating for commensurate reductions in spending. They are just shifting the burden of property taxation to others. For example, homestead exemptions shift the tax burden to renters, who have the property tax passed on to them in their rent but whose landlords do not benefit from homestead exemptions on that property.
These half-measures are not simply designed to provide relief to a few. Retirees are a major voting block and eliminating their property taxes effectively ends their advocacy for this issue.
Property taxes in Texas are among the highest in the nation and should be eliminated. As Governor Greg Abbott tweeted last summer, “Texans want to OWN their property, NOT rent it from the government.” Texans agree! In the most recent primary election, 82.6 percent of Republican primary voters in Texas expressed support for eliminating property taxes (74 percent here in Tarrant County). The result of the current property tax structure is that the government effectively owns virtually all the property. There is a word for this—communism.
A study in 2023 reported that replacing $82.1 billion in property tax revenue would “require a sales tax rate of over 19%.” Assuming this is accurate, this tax is at least a voluntary consumption tax. If you don’t want to pay an extra 19¢ for every $1 you spend on taxable items, then you are free to not make that purchase. Moreover, eliminating property taxes boosts the disposable income of property owners, giving them more money for discretionary spending on voluntary consumption, thus increasing revenue even without a rate increase.
There is real concern regarding the impact of eliminating property taxes on public education funding. Let me be clear: the problem is NOT that the government, including our school districts, has too little tax revenue. The problem is they spend too much. Our current tax-and-spend system, whether in Austin or D.C., cannot be sustained.
There is literally a mathematical upper bound to tax rates, which is why the system continues seeking new and novel ways to strip more money from its citizens. This is why Vice President Kamala Harris advocated for a tax on unrealized gains. This is also why the Biden administration’s Transportation Secretary, Pete Buttigieg, suggested a vehicle mileage tax for every American.
In truth, the problem is much worse than simply hitting a mathematical upper bound. In the private sector, businesses are incentivized to minimize costs. Profit is revenue minus cost—the lower your costs, the more revenue you keep as profit. But in the public sector, that incentive is upside down. Government agencies want to maximize costs so they can go back to the funding authority, hat in hand, at the end of the fiscal year and say, “You didn’t give us enough money, we need more.”
There is a solution, though: CUT COSTS!
To paraphrase President Ronald Reagan, “Spending is the leading cause of taxation.” For example, we can eliminate subsidies and public services, including in-state college tuition and enrollment in public schools for illegal aliens. This will save Texans billions in education spending, thus reducing the voluntary consumption tax rate cited in the study mentioned earlier.
A Rice University professor estimated in 2018-2019 that the public education cost to educate illegal aliens was $1.5 billion in 2018-2019, a number likely to be much higher today because of the significant uptick in illegal border crossings since that study was done. This idea, too, enjoys broad-based support with 90.48 percent of Republican primary voters supporting the proposition (86.3 percent in Tarrant County).
The time for talk is over and the time for action is now. We need to eliminate property taxes in Texas and we need to do it sooner than later. Property taxes are the very antithesis of free market capitalism, pitting property owners against non-property owners.
The United States of America is a Constitutional Republic and the role of our representatives is to represent us and not themselves and certainly not to represent taxpayer-funded lobbyists in Austin. If your state representative does not support eliminating property taxes and you do, it is time to find someone else to represent you.
This is a commentary published with the author’s permission. If you wish to submit a commentary to Texas Scorecard, please submit your article to submission@texasscorecard.com.
