Don’t Fix the Margin Tax to Raise More State Revenues

That’s the cry of the Texas Public Policy Foundation (TPPF) in reaction to the Supreme Court’s ruling that the margin tax is constitutional, and further that an income tax on partnerships and unincorporated associations does not violate the Bullock amendment of the Texas Constitution.

In a press release yesterday TPPF announced a new report entitled The Margin Tax Debunked (PDF). The press release and report are clearly aimed as the first shot across the bow of those legislators calling for more revenues from the franchise tax. The release points out that Speaker Straus has charged the Ways and Means committee with the task of evaluating the margin tax and determining if it should be altered or replaced and seeks to dispel what it calls “common myths regarding the franchise tax.”  It says the margin tax revenue shortfalls have not crippled the state’s revenue system nor caused the so-called structural deficit; the margin tax does not need to be “fixed to increase state revenues;” and the margin tax was never intended “to completely absorb the cost of statewide property tax relief.”

The full report can be found on the TPPF website.

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One Response to Don’t Fix the Margin Tax to Raise More State Revenues

  1. Jeff Ketner says:

    Folks, there is no free lunch. If we want a top-notch education system and thereby attract industries seeking an educated workforce, we the taxpayers have to obey the social compact and fund the public services we want.

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