AUSTIN – The Texas Public Policy Foundation’s Center for Fiscal Policy Director Talmadge Heflin issued the following statement in response to the Texas House Ways and Means Committee Chairman’s call for a 25 percent cut in the business margin tax rates. This proposal would lower the lower rate on wholesalers and retailers to 0.375 percent and the top rate on all other businesses to 0.75 percent:
“We commend Chairman Bonnen for his call to provide meaningful, permanent tax relief this session by lowering the business margin tax burden on all businesses. While we are in favor of putting the margin tax on a path to elimination for the biggest economic effect, this potential 25 percent cut in both rates is a huge step in the right direction. The Foundation’s research finds that eliminating this costly tax would lead to $16 billion in new personal income and 130,000 new private sector jobs within the first five years. This adds to other research showing substantial economic gains and the Tax Foundation’s study finding Texas’ business tax climate would increase from 10th to 3rd after full repeal.
“It’s a terrific starting point in the House discussion over which taxes to cut whereby the Senate has already put forward a $2.4 billion margin tax cut. This discussion over maximizing tax cuts while meeting the needs of the state will lead to more jobs and more prosperity to benefit Texans, especially the working poor when it becomes a reality.”
The Honorable Talmadge Heflin, Director of the Center for Fiscal Policy at the Texas Public Policy Foundation. In the 78th Session, Heflin served as chairman of the House Committee on Appropriations and navigated a $10 billion state budget shortfall through targeted spending cuts that allowed Texans to avoid a tax increase.
The Texas Public Policy Foundation is a non-profit, free-market research institute based in Austin, Texas.