The discussion over how to provide the most tax relief continues in Austin.
Today’s Austin American-Statesman features an article from Governor Greg Abbott highlighting the need for lower business franchise taxes. This comes on the heels of calls from Lieutenant Governor Dan Patrick and Senate Finance Chair Jane Nelson to provide meaningful property tax relief and House Ways and Means Committee Chair Dennis Bonnen taking aim at the state’s sales tax. Even Comptroller Glenn Hegar is getting in on the action with calls for killing several antiquated taxes. Our previous blog post outlines the details of these proposals and the Foundation’s recommendation that primarily focuses on eliminating the margin tax.
With the end of the 2015 Legislative Session quickly approaching, there is no clear tax cut package that will prevail. We’ve shown in a recent study the substantial economic gains in prosperity and job creation from eliminating the margin tax. No matter how you slice it though, the clear winners of this discussion are Texas taxpayers.
By Gov. Greg Abbott – Special to the American-Statesman
The best job creation program is tax reduction.
April 15 is an appropriate day to re-evaluate our tax structure and to find ways to reduce taxes on our citizens. This year, it is projected that Americans will pay well over $4 trillion in federal, state and local taxes. Taxes hinder job creation, shrink take-home pay and grow the size of government.
While we are fortunate in Texas to not pay a personal income tax, we are paying as consumers and employees when it comes to the business franchise tax. Every dollar paid in business franchise taxes could instead be invested in higher wages or new jobs.
Texas must promote smarter tax policies that energize the Texas economy by driving down the cost of doing business.
Texas is at the pinnacle of America’s economy. For decades, we’ve been a leading state for job creation, and in 2014 we created more jobs than any other year in the history of Texas.
We’ve achieved this success by building a framework that allows free enterprise to flourish — a framework composed of less government, reasonable regulations and right-to-work laws that attract job creators and keep job growth here in Texas.
But other states are catching up. We’ve grown too comfortable. While Texans’ job opportunities remain robust, declining oil and gas prices could impact job growth.
Our past success may be blinding us to some of the things that we can — and should — be doing better.
I’ve traveled across the state and have heard from employers that the business franchise tax is a complicated and unfair burden that prevents them from reinvesting to grow their businesses and hire more Texans.
A recent study showed that eliminating the franchise tax in Texas would generate 41,500 new jobs, $3.4 billion in new net investments and $9.8 billion in new personal disposable income by 2017.
That’s why I’ve informed the Legislature that I will reject any budget package that does not provide genuine tax relief for Texas employers and job creators.
To encourage entrepreneurship among veterans, I am also calling for an exemption from the franchise tax for newly created, veteran-owned businesses for the first five years of operation.
To keep Texas the best state for business and job growth, the state must significantly reduce and eventually phase out the business franchise tax.
This reduction in the franchise tax will help attract even more job creators and encourage even more Texas entrepreneurs to invest their capital in opening or growing a business.
These tax savings will also be passed on to Texas families in the form of lower consumer prices and to employees in new jobs and higher wages.
We must do more to keep government small, keep taxes low and keep regulations reasonable if we are to give all Texans the opportunity to succeed.
Texas is synonymous with freedom. We must expand that freedom by ridding the state of unnecessary and unfair taxes that burden job creators.
By reducing and then eliminating the business franchise tax, we can — and will — take Texas to the next level for job creation.
Abbott is the governor of Texas.