Saturday, December 22, 2018

#TXLEGE: Income Tax fight is important Economically (and smart politics)

"But the former governors who were before me laid burdens on the people, and took from them bread and wine, besides forty shekels of silver. Yes, even their servants bore rule over the people, but I did not do so, because of the fear of God."
Nehemiah 5:15

Jeff Leach and Greg Abbott made interesting news this week:
AUSTIN -- Months after Gov. Greg Abbott floated the idea of changing the Texas constitution to eliminate the possibility of a state income tax, a Plano lawmaker has filed a resolution in the Legislature that would do just that.

"We must continue to pursue and advance policies that protect and strengthen the Texas Miracle, starting with ensuring that Texans can keep and control more of their hard-earned tax dollars in their own pockets," State Rep. Jeff Leach said in a news release Tuesday.

He said he wanted to make sure that "Texas taxpayers are protected from the possibility of the creation of a personal income tax - which would have disastrous effects on the future of our great state."

The news release carried a show of support from Abbott.

"Texans know far better than government how to spend their own money," Abbott said in the release. "That's why I applaud Representative Jeff Leach's proposal to amend the Constitution and forever eliminate the possibility of a state income tax. I look forward to working with Representative Leach to ensure Texas remains the best place to live and work."
This is smart.

Substantively,  constitutional prohibition of an income tax makes tremendous sense during a discussion of school finance.  In the past, bad things have happened when the legislature has tried to "solve" school finance.  That's how we ended up with the margins tax in the first place.  We really should constitutionally prohibit the worst tax policy mistake we might be tempted to make.

The politics of this issue are fantastic.  The issue is simple and easy for voters to understand.  Any potential contrast would likely be obvious.

None of the Democrats elected last fall want to take this vote.  Such a vote forces them to choose between their educrat/public sector union coalition and taxpayers.  In other words, Democrats would have to choose between their voters and the people who fund their campaigns.

Bottom Line: You might get long-term certainty on tax policy.  If not, you get a campaign issue.  Either is a win.

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