​Andrew McVeigh and Vance Ginn with Texas for Fiscal Responsibility to break down the Texas Budget and our path to property tax elimination.

Originally published at Discourse. 

​Last week, the U.S. Court of Appeals for the District of Columbia Circuit heard arguments on the legality of banning the social media platform TikTok. The debate over whether TikTok should be able to keep operating in the United States brings the issue of government control over digital platforms to the forefront. It’s the latest frontier in the age-old battle between freedom and security, and there are certainly vociferous defenders on both sides.

Given that it is partially owned by the Chinese company ByteDance, TikTok has long been at the center of national security concerns. Some lawmakers argue that the app's data collection practices pose a risk, as Chinese laws could force ByteDance to share sensitive information with the country’s government. Casey Blackburn, assistant director of national intelligence, noted in an affidavit in the case that the Chinese government could attempt to “coerce ByteDance or TikTok to covertly manipulate the information received by the millions of Americans that use the TikTok application every day, through censorship or manipulation of TikTok’s algorithm, in ways that benefit the PRC and harm the United States.”

TikTok users should understand that using the platform comes with risks and decide, based on those risks, whether to continue using it or not. However, a U.S. government ban on TikTok would set a dangerous precedent, infringing on free speech, economic freedom and the future of innovation.

Lawmakers Are Concerned, Americans Less So
Certainly, the primary justification for a TikTok ban is that the platform puts our national security at risk. Lawmakers fear that TikTok’s parent company, ByteDance, could be compelled by Chinese laws to share data such as users' locations and personal details with the Chinese government. 

Additionally, concerns have been raised that TikTok could be used to deliver misinformation by controlling the content seen by its American users, especially during politically sensitive times like the U.S. presidential election or the Israel-Hamas conflict. This is a growing worry, given that over half of American adults report that they get at least some of their news from social media. Platforms can easily pick favorites by adjusting their algorithms, content and sources to be shown to users.

Florida Sen. Marco Rubio has called TikTok “China’s digital Trojan Horse,” claiming the app poses an unprecedented risk due to the potential for data misuse. These fears have propelled many lawmakers to back efforts to ban TikTok, believing that the Chinese government could use the platform for surveillance or to sway American public opinion. According to the American intelligence community’s annual report, “TikTok accounts run by a PRC propaganda arm reportedly targeted candidates from both political parties during the U.S. midterm election cycle in 2022.”

Meanwhile, average Americans don’t seem to share many lawmakers’ worries. Pew Research Center polling from the summer found that 42% of Republicans and right-leaning independents supported the ban, while only 24% of Democratic and left-leaning independent voters felt the same. And this support has fallen over time: While 32% of Americans support a TikTok ban today, 50% did in March 2023. 

Concerns have also done nothing to curb the platform's popularity globally and in the U.S. TikTok boasts 1.5 billion monthly active users and is now the fifth-most-popular social media platform in the world. Most of its users come from the U.S., with 148 million monthly unique users in this country. If Americans are concerned about the security risks posed by TikTok’s connection with China, they’re not letting it affect their behavior.

A Dangerous Precedent
While lawmakers’ concerns may be legitimate, they’re shortsighted. Focusing solely on TikTok’s risks overlooks the broader issue of how all tech companies—not just those owned by foreign entities—handle user data and are influenced by government officials. While other social media outlets don’t have the same connection with their ownership as those operating in an adversarial foreign country, the influence that the U.S. federal government has on some platforms is concerning. In fact, Facebook came under fire this summer when CEO Mark Zuckerberg publicly stated that during the pandemic the Biden administration pressured the company to censor content related to COVID-19.

Facebook, Google and Instagram collect similarly vast amounts of data, yet they have not faced the same scrutiny. Singling out TikTok with legislation is likely more about political optics and national security concerns than creating meaningful data security reforms. Meanwhile, there has yet to be credible, publicly available evidence of Chinese government actions that would warrant a ban on TikTok in the U.S. Jennifer Huddleston of the Cato Institute argues that banning TikTok could lead to government overreach, setting a precedent for further restrictions on technology under the guise of national security.

A ban would also undermine America’s role as a defender of free speech and openness. If the government starts dictating which platforms Americans can use based on political calculations, it sets the stage for future administrations to limit access to other platforms, potentially leading to broader censorship and reduced competition in the tech ecosystem. Kentucky Sen. Rand Paul highlighted these concerns, noting, “The Supreme Court will ultimately rule it unconstitutional because it would violate the First Amendment rights of over 100 million Americans who use TikTok to express themselves.”

Free Speech and Economic Liberty at Risk
The First Amendment guarantees Americans the right to free expression, and social media platforms like TikTok have become vital tools for communication. Millions of users rely on these platforms to share ideas, create content and engage in discussions. The proposed ban would curb individual choice, as people would no longer be free to decide which platforms to use. Instead of trusting individuals to make informed decisions, the government would be a gatekeeper for what platforms Americans can access.

Virginia Sen. Mark Warner, an architect of the ban, has said, “This is not an effort to take your voice away. … This is not a ban of a service you appreciate. … At the end of the day, they've not seen what Congress has seen.” While Warner’s concerns about data privacy are valid, addressing them by removing individual freedom to choose digital platforms is a imprudent solution that overlooks the broader implications for free speech and innovation.

Banning TikTok would also severely disrupt the economic opportunities it provides for businesses, especially small businesses. TikTok has become an invaluable tool for many entrepreneurs and content creators who rely on the platform to reach new audiences and grow their customer base. Since the pandemic, TikTok has allowed businesses to market their products in creative ways that larger platforms, like Facebook or Instagram, have struggled to match. TikTok’s launch of TikTok Shop in 2023, for example, has attracted more than 500,000 U.S. sellers who use the platform as a key component of their e-commerce strategy. Shutting down TikTok stateside would disproportionately harm these small businesses, removing a vital marketing and sales tools. Such a ban would stifle innovation and damage the dynamic competitive spirit that fuels economic growth.

The potential TikTok ban also raises concerns about market distortion. TikTok operates in a crowded social media space alongside competitors like Instagram, Snapchat and YouTube. Despite their extensive data collection practices, none of these companies are facing bans. If TikTok were banned, it would grant these other platforms an unfair advantage, not through innovation or better service, but because of government intervention.

Companies should rise or fall in a free market based on their ability to innovate, provide value to consumers and compete on a level playing field. When the government intervenes by banning one company, it creates artificial winners and losers. The tech industry thrives on competition, and government overreach in the form of platform bans undermines this competition. Oregon Sen. Ron Wyden has raised similar concerns: “Banning TikTok opens the door for future censorship of apps and technologies deemed politically inconvenient.”

Unleashing the Future … and the Free Market
Social media, artificial intelligence and data-driven technologies are driving a real global transformation. Government bans, however, risk stifling this growth. Instead of restricting platforms and technologies out of fear, we should encourage innovation and competition to allow new technologies to flourish.

By banning TikTok, the U.S. would send a message that government action can stifle innovation. Entrepreneurs may hesitate to invest in new technologies because of concern that their platforms could be shut down based on political whims rather than market forces. If the U.S. wants to maintain its position as a global leader in technology, it must foster an environment that promotes innovation and technological advancement, not one that restricts it.

In a free market, individuals—not the government—should decide which platforms they use. The federal government can certainly provide information for transparency about potential risks, but it should be up to consumers to assess those risks and decide what is best for them. The TikTok ban represents a paternalistic approach to governance, where the government dictates what is safe or unsafe for people, limiting their freedom to make informed choices.

We must recognize that nothing is without risk. Every decision we make involves weighing costs and benefits, and it is not the government’s role to eliminate all potential risks by controlling our choices. Individuals should be trusted to decide whether to use TikTok—or any platform—rather than having the government impose blanket bans.

The question of a TikTok ban represents more than just a national security debate—it raises fundamental questions about the role of government in regulating technology, free speech and market competition. While national security and data privacy are important concerns, banning TikTok is not the answer. Such a ban sets a dangerous precedent that threatens individual liberty, economic freedom and innovation.

As Milton Friedman once said, “A society that puts freedom before equality will get a high degree of both.” The same is true for technology. We must allow the market to work, letting individuals decide how they engage with digital platforms. Banning TikTok risks not only the stifling of innovation but also the erosion of the freedoms that make America’s economy dynamic and competitive.

Originally posted at Kansas Policy Institute. ​

With the Federal Reserve recently cutting its federal funds rate target by 50 basis points to a range of 4.75% to 5%, Kansas must reassess its economic policies to prepare for the challenges ahead. Lower interest rates may offer short-term relief by reducing borrowing costs, but the continued risk of inflation demands long-term reforms. Kansas can withstand the economic uncertainty created by the Fed by state policymakers taking proactive steps to reform taxes, reduce spending, and deregulate to improve economic freedom and opportunity.

Economic Freedom Ranking and Implications

According to the Economic Freedom of North America 2023 report, Kansas, currently ranked 14th in economic freedom, lags behind neighbors like South Dakota (5th), Nebraska (13th), and Missouri (15th). Kansas’s ranking reflects areas needing improvement, including high taxes and government spending.

There is abundant evidence that people in countries and states with more economic freedom thrive while those with less don’t. A recent academic study considered information from 54 published articles on relationships between economic freedom and different measures of prosperity and found that “economic freedom is positively related to growth, income, and investment.” This applies with Kansas and other states with higher economic freedom have lower unemployment rates and faster job creation, underscoring the benefits of increasing economic freedom.

The following figure from the report shows the benefits between higher economic freedom and higher income per capita across North America.

Kansas’s tax and regulatory environment has prevented the state from achieving stronger economic outcomes despite its relatively low unemployment rate. To compete with neighboring states and others, Kansas must focus on policies that reduce taxes and remove obstacles to starting a business.

Tax Reform: The Key to Growth

Kansas has made strides in tax reduction, but its personal income tax and high property taxes still pose significant obstacles to business growth and household wealth. States like Texas and Tennessee, which have no personal income tax, consistently rank higher in economic freedom and experience faster population growth and job creation. Phasing out the personal income tax and reducing property taxes would help Kansas attract new businesses and residents. Lower taxes would give businesses more capital to reinvest in jobs and innovation, while making the state more competitive.

Targeted Regulatory Reforms for Small Businesses

Kansas also faces barriers in its regulatory environment, particularly for small businesses. Burdensome regulations, including licensing requirements and other red tape, slow business formation and expansion, hindering economic dynamism. Lawmakers should comprehensively review regulations and focus on removing outdated or excessive rules that stifle small businesses. Streamlining occupational licensing would make it easier for entrepreneurs to start and grow businesses, creating more jobs and opportunities for workers.

Spending Restraint and Fiscal Responsibility

Reducing taxes must go hand-in-hand with controlling government spending. Excessive spending forces higher taxes and crowds out private-sector investment, creating a drag on economic growth. Implementing fiscal rules that limit state spending growth to the maximum rate of population growth plus inflation would ensure that Kansas maintains fiscal discipline. By restraining spending, Kansas can fund critical infrastructure and education without placing additional burdens on taxpayers.

Conclusion: A Path to Greater Freedom and Prosperity

Kansas has the potential to move up the economic freedom rankings, but achieving this requires bold action. By reducing taxes, cutting unnecessary regulations, and controlling government spending, Kansas can build a more vibrant and competitive economy. Following the lead of states like South Dakota and Texas, which prioritize pro-growth policies, Kansas can improve its labor market outcomes, attract investment, and create a more prosperous future for all residents.

Chairman Meyer and Members of the Committee,

Thank you for the opportunity to submit written testimony. I am Dr. Vance Ginn, president of Ginn Economic Consulting, a citizen and economist concerned about Texas's high and rising burden of property taxes. 

Over the last decade, the Texas Legislature has made some progress in providing property tax relief, but the housing affordability crisis demands more action. Moreover, property taxes are not just a financial burden but are fundamentally immoral as they force Texans to perpetually rent from the government, functioning as unrealized capital gains and wealth taxes paid annually. This system makes it difficult for many families to build or pass on a legacy. Property taxes have risen too fast for too long, as noted in the following three charts. ​

Last session, despite a $32.7 billion surplus, the Texas Legislature allocated just $12.7 billion to new property tax relief. Meanwhile, the state budget increased by a record 32% in state funds from GAA appropriations to appropriations, which is unsustainable. ​

Although this was the second-largest tax relief amount in Texas history, property taxes barely changed last year because of excessive spending and debt increases by local governments. ​

The property tax data in the chart above were presented by the Texas Comptroller’s Office during the Texas Senate Committee on Finance hearing on September 4, 2024. In my testimony that day, I included data showing an increase of $165 million in total property taxes collected because my calculations were based on what the Comptroller had on their website then. However, the Comptroller’s Office has since updated its website with the latest data. I should note there are 12 ISDs without final property tax data in its spreadsheet because of court cases to finalize valuations and property tax amounts due. This means the amount of property taxes collected in 2023 could be higher than the Comptroller’s Office estimates, likely negating the decline estimate.

How did this relief happen?

We should note that school district property taxes did not go down by $12.7 billion. Last year, the Texas Legislature allocated this amount toward reducing school district maintenance and operations (M&O) property tax rates by 10.7 cents per $100 valuation and raising the homestead exemption by $60,000 to $100,000 in 2023. Based on the latest available data, these measures reduced total school district property taxes, which includes M&O and I&S for debt, by nearly $4.3 billion because school districts raised their property taxes levied by increasing M&O spending and I&S debt. 

While about $6.4 billion of the $12.7 billion was allocated to accomplish this relief, the other $6.3 billion is reserved to maintain the relief in the next fiscal year. Texans receive only about 33% of the total from their surplus dollars in relief. This is not a good return for taxpayers because the relief was not directed toward helping everyone, and local governments continued to tax too much so they could spend more. 

Rather than allocating all $12.7 billion to reduce school district M&O property tax rates to help everyone with a homestead, rental, or business property, the Legislature chose to pick winners as those with a homestead and losers as those without. In addition to the fact that school districts and other local governments increased spending and taxes excessively, total property taxes levied across the state may have declined slightly by -0.42%. This is the second-best relief since 1998, after a decline of 1.03% in 2007. 

But this could have been the largest relief had the Texas Legislature used more of the $32.7 billion surplus toward compressing school district M&O property tax rates, freezing school district property taxes so that when they are cut, they go down by the full amount, imposing a spending limit on local governments, and capped all other property taxes at the no-new-revenue rate for voters to approve any tax increase.     

The path forward is clear: spend less and reduce property tax rates rather than complicating the housing market with homestead exemptions, discounts, and abatements that make elimination more difficult because it drives property tax rates higher than otherwise. Texas can eliminate property taxes with three simple cap, pass, and allocate (CPA) steps:

1. Cap property taxes to the no-new-revenue rate and freeze school district M&O taxes.
2. Pass sustainable budgets that limit government spending, with a strong spending limit based on a maximum rate of population growth plus inflation at the state and local levels, like Colorado’s TABOR, but better is a Frozen Texas Budget of no growth or less spending by at least 10%. 
3. Allocate at least 90% of surplus revenue by the state to compress school district M&O property tax rates to eliminate them in about a decade, ending Robin Hood and having taxpayers pay 100% of these taxes through the state. This should include less spending on public education with more efficient universal education savings accounts. Local governments should allocate their surpluses to reduce their property tax rates to zero.

This CPA process will help curb soaring property taxes and pave the way for a more prosperous future without property taxes to preserve life, liberty, and prosperity. Thank you for your time.

Vance Ginn, Ph.D., is president of Ginn Economic Consulting and contributor to more than 15 think tanks, including Americans for Tax Reform, Texans for Fiscal Responsibility, and Texas Policy Research Initiative. Dr. Ginn was previously a lecturer at multiple higher education institutions, chief economist at the Texas Public Policy Foundation, and chief economist at the White House's Office of Management and Budget. He earned his doctorate in economics at Texas Tech University. Follow him on X.com at @VanceGinn and get more of his research at vanceginn.com. ​

Originally published at Texans for Fiscal Responsibility. Get the full report there.

​Overview

• The 2024-25 Frozen Texas Budget would have kept the state’s budget from growing as it is already too big, thereby excessively burdening taxpayers. This also helps quickly achieve the three-step process to eliminate all property taxes over the next decade by limiting government spending at the state and local levels and returning surplus collected taxpayer dollars to taxpayers.
• The 88th Texas Legislature passed the 2024-25 budget in 2023, which resulted in the largest budget increase and second-largest property tax relief in Texas history after a regular and four special sessions. The 89th Texas Legislature in 2025 must practice better budget restraint to reduce the growing spending burden, sustain past property tax relief efforts, and provide more tax relief.
• Freezing the Texas budget and returning “surplus” money to taxpayers by reducing school district maintenance and operations property tax rates will provide a path to eliminate nearly half of property taxes in Texas. Combining this with spending restraint by local governments and returning “surplus” money to taxpayers by reducing property tax rates will provide a reasonable path to eliminating immoral property taxes that tax unrealized gains in Texas so Texans can have their right to own property.
• See an Overview of the Texas Budget.