Tuesday, May 10, 2005

Taxes and The State Budget

The legislature can't seem to come to terms with the fact that if they lower taxes in one place they will have to raise them somewhere else to make up for it. It is amazing to me that this comes as a shock to them, like our own Sen. Steve Ogden, Senate Finance Chairman, no less. Republicans have been trying to sell the American people on, so called, supply side tax cuts for decades now. If you cut taxes the money will come, so to speak. Well now that the Federal government in hemorrhaging money and the states are following suit the Republicans are having to face up to reality. They can't cut every tax there is on the face of the earth and pay for programs the majority of the people still want.

That's why they're trying to run a scam on Social Security, the most popular and successful government program ever.When they try to lower taxes on one group (the wealthy) they inevitably have to raise taxes on other groups (the poor and middle class). They just can't seem to figure out whey it keeps happening like this. The also don't understand why everyone can't see that if the wealthy pay less taxes everyone will benefit. OffTheKuff has all the latest follies on the state budget. If we Democrats can't find a way to run on these issues and win then we are in big trouble for a long time to come:
Only households with incomes of more than $140,853 a year would realize a net tax cut — an average of 1.52 percent — under the swap of higher state taxes for lower school property taxes in fiscal year 2007, when the trade-off is fully in place.

A tax bill approved earlier by the House also is weighted in favor of the wealthiest Texans, although the two plans differ significantly in details.

The Senate's tax plan, scheduled to be debated by the full Senate this week, would raise $482 million more in new or higher taxes than it would provide in property tax relief in 2007, according to the Legislative Budget Board's tax equity note.

Senate leaders, however, said the bill was designed to balance out, or be "revenue neutral," within a few more years. (You believe that don't you? - EOW)

Senate Finance Chairman Steve Ogden, R-Bryan, the bill's sponsor, blamed much of the inequity on a 75-cents-per-pack increase in the cigarette tax, which is part of the package. On average, poor people who smoke spend a larger share of their income on cigarettes than wealthier people.

"Obviously, I'd like to see it (the analysis) a little bit different. (But) get rid of the cigarette tax, and the equity note would change substantially, particularly in the areas of the lowest income," he added.

Ogden said he isn't willing to concede that the bill won't offer tax relief for many Texans. (Don't worry, I will - EOW)

But Sen. Eliot Shapleigh, D-El Paso, a strong opponent of the bill, called the tax trade-off a "historic shift to radically regressive taxes."

"All this debate has been about tax cuts for the wealthy," he said.
Not much from either one of Williamson County Reps - Gattis, a House Conferee, and Krusee - on this subject but they both voted for the bills in the house. Mike Krusee has faith though:
"Tom will get us there," Krusee said. "He always does when he wants it."
I feel better already.

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