AUSTIN AMERICAN-STATESMAN: Is it an income tax?

The Young Conservatives of Texas have a letter to the editor in today’s Austin American-Statesman alleging that the tax reform bill passed by the House earlier this week amounts to a state income tax.

Click here to read their letter.

Do you think it’s an income tax? Click on the COMMENT link below to post your thoughts.

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One Response to AUSTIN AMERICAN-STATESMAN: Is it an income tax?

  1. Tom Washington says:

    Fellow CPA’s,
    Of course it is an income tax when applied to partnerships and sole proprietorships. Those entities tax at the individual level on the partner’s 1040 return.
    The calculations may be applied based on factors unrelated to the net income of the partnership before taxes but it will still reduce the net income of the partnership thus taxing the individual partners or sole proprietor.
    In fact, the instructions in the State’s franchise tax assumes that the entity being taxed is accounted for as a corporation with earned surplus. Applying the franchise tax rules to a partnership will make the franchise tax an income tax on those partners directly calculated from the net income of the partnership adding back salaries. The franchise tax for some odd reason is worse in that it doesn’t even give the business full deductions for legitimate salary business expenses.
    Texas, overnight, has managed to go from a “business friendly” tax environment to a “business taxed” environment almost overnight with HB 3.
    In my opinion, the legislators should have taken the bold step of rewriting the Texas Constitution to invalidate the judges interpretation that a “general diffusion of knowledge” equals equal funding per student across the board at all Texas schools.
    Local control and local funding has served most areas of the State well for many years.
    Living in an urban area of the State has some benefits and some penalties (more traffic for instance). Living in the rural areas of the State also have some benefits and some penalties (less funding per student). These are the compromises that people should make when they decide on their place of residence.

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