With a stroke of the pen, Texas’ economy is getting a much-needed $90 million tax cut. Nearly 400,000 businesses around the state will find the tax cut frees up resources for job creation, capital investment and operating stability. The action by Gov. Rick Perry puts in action previous pledges to bring greater transparency in the state’s taxes and spending.
Gov. Perry announced today that the state’s Unemployment Insurance replenishment tax was not needed for a least a year, and he was ordering that the tax be suspended. The UI replenishment tax puts revenues into the Unemployment Insurance Fund, from which people who lose their jobs are paid. A press release from the governor’s office noted that, “The Texas Workforce Commission (TWC) approved the suspension of the tax after reviewing employment figures and economic forecasts for Texas and determined there were sufficient reserves to meet unemployment obligations for 2008.”
Putting an end to unnecessary taxes has been one of our stated goals since the the outset, and were pleased when the Legislature abolished the Texas Telecommunications Infrastructure Fund tax during the last legislative session.
Gov. Perry’s action today fits into the same mold, by ensuring that the state government only collects taxes which are needed. Given the state’s strong economy and positive job growth, it makes sense that the UI tax isn’t needed to maintain the stability of the fund. This action will help keep Texas’ businesses competitive in the face of a national economic downturn.
The governor should be praised for keeping $90 million in the economy, rather than tied up in a government fund when its not needed.