We all know the time is long overdue to rip the poisonous weed of property taxes out of the state’s economic garden. We might actually get the chance if State Rep. Phil King of Weatherford gets his way.
King is making waves today, calling for the elimination of the school “maintenance and operation” property tax levy, which amounts to about a third of all property taxes. He’d replace it with revenues generated from the existing consumption tax.
It’s well agreed on by economists that consumption taxes are a superior way to fund government –better than property taxes and income taxes.
Alan Greenspan told Congress several years ago that modern economics has clearly demonstrated that if you were to start a government today, you would only use a consumption tax. The Lone Star State has the opportunity to lead the nation in this fair, modern reform, and Phil King should be congratulated for jump-starting the public conversation.
Texas’ consumption tax has been a solid workhorse, ensuring a strong business environment that drives a healthy, prosperous economy, while providing Texans with a daily reminder of exactly how much government costs them.
Efforts to reduce property tax rates in recent years have been undermined by proponents of the current appraisal/tax systems by refusing to engage any meaningful reform. As such, even as rates have been forced downward, tax burdens continue to rise through the appraisal process.
Shifting to consumption taxes would be inherently more fair, while providing an important, transparent check on the cost of government.
Research in Texas has shown that with even a mild broadening of the sales tax, the rate could be left essentially unchanged. Enough revenues would still be raised to accomplish Mr. King’s vision of eliminating the school M&O tax.
