AUSTIN – Earlier today, the Tax Foundation released its 2014 State Business Tax Climate Index, a nationally-renowned ranking of each state’s tax system. According to this year’s index, Texas’ tax system ranked as the 11th most competitive in the U.S., a slight decline from last year’s ranking.
“Texas’ tax system—while competitive—has plenty of room to improve,” said Talmadge Heflin, Director of the Center for Fiscal Policy.
Heflin continued, “There are two major problem areas in the Texas Tax Code: the margin tax and the property tax. In spite of the Legislature’s attempts to improve the margin tax last session, the state’s primary business tax remains overly complicated, poorly designed, and disruptive to our small business community. Additionally, the state’s property tax system, ranked as the 14th most punitive in the nation, continues to punish homeowners and business investment. And the problem is only getting worse, as is evidenced by Texas’ slippage of three positions in the latest property tax index as local districts continue to hike property tax collections.”
“Our research clearly indicates that substantive reforms in these two areas are needed in order to keep Texas’ economy thriving and competitive,” said Heflin.