“While the debate over the margin tax’s constitutionality has been settled, now the Texas Legislature can focus on the important discussion of how to fix its practical defects. We welcome the Legislature looking at ways to make the tax more user-friendly, but a true fix means making it less costly to comply – not changing it so that it captures more revenues from Texas businesses.
“According to an upcoming report from the Texas Public Policy Foundation, ‘In fiscal 2008, the margin tax generated $1.4 billion less than expected… And in fiscal years 2010 and 2011, collections fell short by $500 million.’ The modest underperformance of the margin tax is small in comparison to the long-term growth of the Texas budget. Restraining growth in spending, not seeking more revenue, will keep Texas as the nation’s economic leader.”
The Honorable Talmadge Heflin is Director of the Center for Fiscal Policy at the Texas Public Policy Foundation. Heflin served 11 terms in the Texas House of Representatives and chaired the House Appropriations Committee in 2003, leading the Texas Legislature’s successful efforts to close a $10 billion budget deficit without a tax increase.
The Texas Public Policy Foundation is a non-profit, free-market research institute based in Austin.
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