Tuesday, October 30, 2012
Eliminate Texas' Business Margin Tax
Today, the Texas Public Policy Foundation endorsed eliminating Texas' Business Margins Tax. Cahnman's Musings wholeheartedly concurs. Unlike TPPF, however, I would prefer to dismantle the tax immediately.
Texas' Business Margins Tax is notoriously cockamamie. It doesn't raise much revenue, and compliance is a pain in the backside. It serves no useful purpose.
A rule of thumb for taxation is that, to the degree that taxation is necessary, compliance should be simple. Texas' Business Margin Tax obviously fails that test. In this regard, Texas' Business Margins Tax is similar to the Federal Alternative Minimum Tax.
The only difference I have with TPPF concerns timing. TPPF wants to phase the tax out, I'd prefer to eliminate it immediately. A phased withdrawal, however, is a compromise with which I can live.
The Texas Business Margins Tax: End it, don't mend it.