Taxes

Property taxes in much of Texas and particularly in Austin and Travis County are too high. I believe that property owners in Texas need immediate relief from high property taxes, and that this relief must go beyond tinkering with the appraisal process. I will introduce one or more bills in the legislature that will require cities and counties and taxing authorities to hold a referendum—that is, get approval from the voters—in order to raise property tax revenues beyond what is justified by inflation plus population growth on a yearly basis.

So what’s wrong with high property taxes? They hurt businesses and therefore cause low wages and lost jobs. They cause high rent, thereby hurting low-income people and students. Low income people, in fact, pay proportionately more property tax because they do not get the homestead exemption. High property taxes are causing the elderly to be taxed out of their homes. They have completely prevented many people from achieving the American Dream of home ownership because people know that, even if they can afford to buy a house today, they might not be able to afford the property taxes down the road.

Property taxes in Travis County are higher than in most of the rest of Texas. Many people feel that they are renting their own home from the politicians. Property taxes also seem to have a mysterious nature. Nobody understands how appraisals go up when the market doesn’t seem to. Soon, it will not be uncommon for this tax-on-your-house or building to approach $10.00 or more per square foot per year in some parts of Austin. At this rate, people will never truly own their home. They will always be renting it from politicians. Even for homesteaders whose tax increase is limited to 10 percent a year, this rate doubles the tax every 7 years.

All of these are reasons for immediate property tax reform and holding politicians accountable for getting this done in the next legislative session.

Thinking About Taxes—The Big Picture

I support low taxes and less spending by politicians because that is the only way to prosperity. There is practically no level of government—local, state, or federal—and no period of time over the past half-century, when politicians have substantially decreased (rather than raised) their spending.

We cannot sustain this trend. If we do not rein in spending, there are only two options:
(1) Give more money to the politicians (raise taxes), or
(2) borrow the money and hope our children and grandchildren will pay off the debt.

Some people say, “Let’s tax the rich.” Or, “Let’s tax the corporations.” The problem is that there is no such thing as taxing only one segment of society. A tax on one segment trickles over to the other segments. Higher taxes on the “wealthy” means that wealthy people have less money to invest in businesses and charities. So, fewer jobs are created, fewer charities operate. If there are no new jobs, but our population increases, then wages for everyone will go down and more people will be without jobs. The same holds true for companies and corporations. As their taxes go up, the wages they pay will go down; and their prices for goods and services they offer must go up.

Another example: When property tax on rental property goes up, the tenants pay higher rent, or must pay for their own repairs.

Ultimately, high taxes means fewer jobs and higher prices.

In response to this reality, some people believe that politicians should just come in and control everything—-tax the corporations, control their prices, and dictate the wages they must pay. But no nation has ever succeeded at this over the long term. That is because, in that system, innovation, creativity, and motivation are crushed. The Soviet Union completely collapsed under this system in less than a century, with poverty and starvation. Cuba, under this system, has descended to where farm equipment can no longer be manufactured and repaired, so the government has distributed plows, horses, and mules—thus going backwards, not forward.

In the U.S., there is nothing so extreme, but the politicians’ increasing take-over of business, banking, medical care, education, and retirement is still just an experiment. Most people rightly do not believe that the president and Congress will be able to revive General Motors or deliver medical care. As for saving our schools (with federal intrusion starting in the 1950’s) and providing for the elderly (starting in the 1940’s), these are already known failures. These were experiments with money that came straight out of our wallets, pay checks, and children’s college money. We would have been better off keeping our money. We would all be richer today.

All of this is why I have pledged to work for limited spending by politicians and lower taxes