AUSTIN – Texas Public Policy Foundation Economist Dr. Vance Ginn today gave invited testimony before the Texas Senate Finance Committee on an interim charge to study the economic benefits of phasing out the franchise tax and public testimony on an interim charge to improve budget transparency.
“Simply put, businesses don’t pay taxes; people do in the form of higher prices, lower wages, and fewer jobs available,” said Dr. Ginn. “No matter how you evaluate the franchise tax, commonly called the margin tax, it fails to be a simple tax, fails to meet revenue expectations, and fails to allow Texans the opportunity to reach their full potential. Texans would be best served by eliminating this onerous tax so that they will have available billions more in new personal income and thousands of new private sector jobs. Given the economic and fiscal uncertainty with the current state of the economy, a valuable path to elimination could be to phase it out over the next two budget periods, preferably by reducing the tax rates. For a more prosperous Texas, last session’s progress of cutting this business tax by 25 percent should be continued by putting the margin tax on a path to elimination.
“Regarding budget transparency, it is reasonable to expect the Legislature to provide transparency and accountability of taxpayer dollars. A great way to do this is for the Legislature to convert from a strategy-based budget format to a program-based budgeting layout and provide budget information online in real time throughout the budget process. These would be great steps toward improving budget transparency so Texans can better evaluate how their dollars are spent.”
Simply put, businesses don’t pay taxes; people do in the form of higher prices, lower wages, and fewer jobs available. Given that taxes exist to fund essential government services, the least burdensome taxes should fund conservative budgets, which grow by no more than population growth plus inflation.
The full testimony can be found here: http://www.texaspolicy.com/content/detail/testimony-eliminate-the-margin-tax-to-reach-texans-full-potential
Here's my interview at the link below on these issues and more that starts at the time 14:20.
NEW TEXAS JOBS REPORT SHOWS UNEMPLOYMENT RATE AT OR BELOW THE U.S. AVERAGE FOR 110 CONSECUTIVE MONTHS
AUSTIN – The Texas Workforce Commission on Friday released Texas labor market information for February 2016. The Texas Public Policy Foundation’s Economist Dr. Vance Ginn issued the following statement:
“Job creation in Texas keeps percolating along as February marks the 10th straight month of positive nonfarm jobs created, bringing the tally to 64 of the last 65 months,” said Dr. Ginn. “This job growth has contributed to the state’s 4.4 percent unemployment rate that remains at or below the U.S. average for 110 consecutive months. Although the mining and manufacturing sectors have lost a combined 97,700 jobs during those twelve months, there’s been a healthy mix of job growth in other sectors bringing the private sector total to 142,800 jobs added in that period. Slower job creation is somewhat expected this far into an economic expansion, but Texas remains America’s job creation leader with 34 percent of all U.S. jobs created here since December 2007. These data provide further evidence that limiting the size and scope of government allows free markets to provide the best path towards prosperity.”
This presentation highlights Texas’ economic and fiscal challenges and how legislators can help the state weather these headwinds by limiting the size and scope of government.
Presentation: Can Texas Weather Economic and Fiscal Challenges?.
Vance Ginn, Ph.D.