A survey of 790 Texas small businesses finds that because of the new margins tax:
1) 50% will raise prices
2) 20% will lay off at least one employee
3) 33% won’t hire new employees
4) 14% will drop health care or other benefits
5) 3% will close
Meanwhile, thanks to an economy that is far outpacing the nation and a spike in oil severance tax revenues, the state surplus could reach $15 billion, so the $5.9 billion at most that the tax is going to raise will likely not be needed to balance the budget.
At the least, the tax could be dramatically reduced and businesses that are not profitable could be exempted, which would avoid killing off businesses before they can acheive their potential.
It’s true that overall Texas remains a better environment for business than many other states, but we are competing globally with other countries that have no corporate taxes at all. And we could be even more prosperous as a state without this margins tax.
Here’s the Houston Chronicle article on the National Federation of Independent Businesses survey: