Eliminating the Property Tax: One Small Step. One Giant Leap.

Janice Cookston
WeTexans.com Archives 



“First they ignore you, then they ridicule you, then they fight you, and then you win.” ― Mahatma Gandhi.

Friday, March 8, 2013,  Rep. George Lavender of Texarkana filed HB 3742 to eliminate the property tax in Texas! Blood, sweat, tears, more blood, more sweat, the boulder we have been pushing against for over four years has finally rolled over. We are one giant step closer to true private property ownership in our state. The full text of the bill is not yet available online but here are the highlights:

by Rick Cunningham from the Texas Center for Economics, Law and Policy

HB 3742: The Tax Reform Act of 2013
An Act Relating to repealing certain state sales, use, excise, franchise, severance, production, occupations, gross receipts and inheritance taxes, to repeal or limit certain local sales, use, excise and ad valorem property taxes, to enact a statewide and local value added tax, and to reform school finance and administration

Texas’ present state & local systems of taxation & public finance:

  • Unfairly distribute the tax burden among individuals, groups and industries
  • Distort economic incentives, create inefficiencies and suppress growth in Texas jobs and income
  • Systematically deprive ad valorem property taxpayers of their fundamental due process & property rights
  • Persistently fail to meet Texas constitutional standards for provision & financing of public education
  • Prevent millions of Texas pupils & family members from residing in truly local, community school districts
  • Promote a multiplicity of special purpose districts driven by tax base distribution in preference to local need

Texas Replaces its Pyramiding, Distorting & Inefficient State Taxes with a 7% Value Added Tax:

  • A flat-rate value added tax promotes sound economic decision-making, efficient and transparent collection & administration, and fair distribution of the tax burden in proportion to real economic output
  • Virtually all other state taxes are repealed
  • No business is disadvantaged by the VAT relative to other businesses, but very small businesses are exempt
  • Exemptions are created also for governmental, public and not-for-profit organizations
  • VAT is embedded, but disclosed, in the price of goods & services
  • Individuals not engaged in a trade or business bear no tax reporting burden

Local sales & Use Taxes Are Replaced with Local Value Added Taxes

  • The Comptroller collects, apportions and allocates local revenues to local taxing authorities
  • Municipalities’ 1/2% sales & use tax rate cap is raised to a 1% VAT rate cap
  • Counties’ tax rate caps remain at 1%, but the higher VAT tax base permits higher tax revenues
  • School districts are authorized to levy up to 1/2% VAT within their boundaries for enrichment purposes
  • Other local sales taxes are converted to VAT at reduced rates, but total local VAT burden capped at 3%

The Ad Valorem Property Tax Is Phased Out

  • The annual ritual of reappraisals, hearings & denials ends for most Texans & phases out for most others
  • “Basic” education funding replaced with allocations from state general revenues under expanded Foundation School Program that preserves existing formulae for equity and proportionality
  • “Enrichment” education funding sourced through local VAT and other revenues
  • Freed from their dependence on a large property tax base, oversized, bureaucratic school districts may be transformed into little engines of teaching excellence, community involvement & truly local accountability

Download a PDF of this brief formerly/https://dl.dropbox.com/u/1961021/Texas%20Tax%20Reform%20Act%20of%202013%20–%20Legislative%20Proposal%20Brief%20%28version%203-13-2013%29.pdf


The sword has been forged. Will you help us carry it into the battle? Victory is liberty.



About We Texans Archives
Special Thanks to Debra Medina and staff for outstanding research on sovereignty and property rights and property taxes. Hat Tip to all! Formerly WeTexans.com this content is archived and searchable here on Constitutional Liberty Coalition for reference only.

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