FOR IMMEDIATE RELEASE
October 9, 2012
AUSTIN – The Texas Public Policy Foundation is encouraged by the Tax Foundation’s 2013 State Business Tax Climate Index ranking Texas’ tax climate among the ten best in the nation. As the ninth most competitive tax climate in the nation-the same as last year’s ranking-Texas is well-positioned to compete for jobs and business in today’s global economy. While remaining in the top ten illustrates that the Texas Model of doing business works, Texas’ inability to improve its ranking signals that more work needs to be done, especially when it comes to the state’s costly and complex margin tax.
“Texas is doing great, but it can do better,” said The Honorable Talmadge Heflin, Director of the Foundation’s Center for Fiscal Policy. “Texas’ margin tax has dulled the state’s competitive edge and without significant reform it will spell trouble for the state’s future economic prospects. This is Texas-it is not in our nature to settle for the status quo.”
“The key to improving Texas’ tax climate is to reform the margin tax, the state’s primary business tax,” said James Quintero, Sr. Policy Analyst for the Foundation’s Center for Fiscal Policy. “As it exists today, it takes many businesses more time and resources to figure out their tax bill than it does to pay the tax, and that is just not good tax policy. Incoming lawmakers need to overhaul the margin tax-assuming they are not inclined to abolish it outright-starting with making the small business tax exemption permanent, increasing the exemption threshold to $10 million and addressing the issue of profitability.”
Quintero adds that several outside organizations have noted a decline in Texas’ economic competitiveness, an issue that is explored more in-depth in the Foundation’s September 2012 Policy Perspective, The Texas Margin Tax and Its Impact on the State’s Economic Competitiveness.
The annual Index measures the elements of each state’s tax system that are important to all types of businesses, reducing the many complex considerations to an easy-to-use ranking. State-based organizations and policymakers use the Index to gauge how their state’s tax system compares to others and as a roadmap for improvements. States are compared as of their tax policies on July 1, 2012.
Talmadge Heflin is director of the Center for Fiscal Policy at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin. Heflin served 11 terms in the Texas House and chaired the Appropriations Committee in 2003, leading the Legislature’s successful efforts to close a $10 billion budget deficit without a tax increase. He may be reached at [email protected].
James Quintero is a fiscal policy analyst for the Center for Fiscal Policy with the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin.
Contact:
Kristen Indriago
(512) 472-2700
The Texas Public Policy Foundation is a non-profit, free-market research institute based in Austin.
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