Tuesday, August 02, 2005

The Problem Explained

Harvey Kronberg does a very good job of pointing our where the impasse is with school finance/property tax relief in this News 8 editorial, Why lawmakers can't agree on taxes
What's the problem? Why can't the Legislature deal with the school finance and property taxes? Here is a simple explanation.

Maybe half the Republicans in the House and Senate believe that teachers, school boards and administrators are the problem and support what the education community believes is punitive and counterproductive legislation.

The other half of the Republicans sees public schools as major employers and the glue that holds their rural communities together and don't support what they see as the leadership's approach of attacking their local superintendents and teachers.

Lawmakers can't justify how some taxes would increase more than property taxes would decrease.

These Republicans, along with their Democratic colleagues, have been successful in stopping the legislative freight train.

Urban and suburban Texans want to see a reduction in school property taxes but they are doomed to failure. Here is the truth most politicians won't tell you. There are only three types of taxes - property, consumption and income.

Here in Texas, we have taken income taxes off the table. So, if you want to reduce property taxes, the only way to make up the lost revenue is with increased sales and consumption taxes. We saw what that meant with the recently proposed legislation. People with incomes of less than $100,000 would see their consumption taxes go up more than their property taxes would come down.
To me it's a fight between those that believe in public education (rural) and those that don't (urban & suburban). Here are two historical articles to look at regarding this fight. The first is this editorial from The Texas Observer, What Goes Around, Comes Around, which gives a historical perspective on public education in Texas. The editorial gives the rural, progressive, farmers historical perspective of the need for public education in Texas and to keep corporate money out of our politics. The other piece, Property Tax versus Income Tax, is a history of the battle. Which begins by pointing out that property taxes were initially instituted because it was a tax on wealth:
Over a century ago, when property tax began, land (and improvements) was the primary form of wealth, so it was much nearer to being a duty on prosperity than it is today. Many of the other federal taxes, such as taxes on electrical energy and telephone calls were for nominal amounts and often unknown to consumers.

Property taxes, on the other hand, required taxpayers to make an unequivocal tax payment of considerable size from which the taxpayer could not avoid without losing what was often their most significant piece of property and wealth.
The above two articles along with these three (See You in Court, SB 8--New & Improved?{scroll down} and Income gap grows in U.S.) help provide more context for the current problems being faced by our bungling Republican leadership.

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