Originally published on Substack. 

​Texas Governor Greg Abbott (R) has released his Six Steps to Overhaul the Property Tax System, promising relief from soaring appraisals and runaway local tax hikes. Here’s the plan posted on X.

But let’s be clear: while Abbott’s plan is progress, it’s not the destination. Texans deserve full ownership, not perpetual relief. If leaders don’t show courage now, Texas risks becoming the next California—spending too much, taxing too much, and delivering too little.

The right path is simple but not easy: spend less, tax less, and let Texans prosper.

The Positives: Where Abbott’s Plan Gets It Right

Here are the biggest strengths of his plan:

1. Local Spending Limits. Limiting local government spending to population growth plus inflation (or 3.5%, whichever is lower) would impose much-needed discipline. This mirrors the Sustainable Budget model that spending restraint is the only sustainable form of tax relief.
   
2. Two-Thirds Voter Approval for Property Tax Increases. Giving taxpayers the power to veto big hikes would protect wallets and restore accountability. It’s a guardrail against local governments that treat taxpayers as endless tax revenue sources.
   
3. Appraisal Predictability. Requiring appraisals only once every five years could reduce red tape and uncertainty for homeowners and businesses.
   
4. Lower Appraisal Caps and Broader Coverage. Reducing the homestead appraisal cap from 10% to 3% and extending it to all property types could slow some growth in tax bills.
   
5. Empowering Voters to Roll Back Taxes. Allowing 15% of local voters to trigger rollback elections gives Texans direct power to check government excess.
   
6. Eliminating School Property Taxes for Homeowners. The boldest part—ending school district property taxes through a constitutional amendment—could mark the beginning of true property ownership if done responsibly.

Together, these reforms acknowledge a truth fiscal conservatives have preached for decades: property taxes are too high because government spends too much.

The Concerns: Caution, Complexity, and the Need for Courage

Still, Gov. Abbott’s proposal doesn’t go far enough. It tinkers with symptoms instead of curing the disease.

• Caps don’t cut spending. Local officials will simply find new ways to spend around them. Without stronger constitutional limits and voter-approved enforcement at the state and local levels, these caps risk becoming ceilings to hit, not boundaries to respect.
  
• Appraisal limits distort markets. Capping appraisals shifts the burden onto others when local governments jack up tax rates to spend more. Capping appraisals also incentivizes people to not sell their property thereby reducing available supply in the market resulting in higher values for new property purchases and making it more difficult for first-time buyers, households with lower income, and others.
  
• “Relief” without reform fades fast. Texans have seen this before—record “relief” packages wiped out by higher appraisals and local rate hikes. Relief without restraint is a sugar high; reform must be permanent.
  
• The endgame is missing. Abbott ran on eliminating property taxes outright in 2022, but this new plan sidesteps that vision.

If Texas settles for tinkering, states like Florida and Tennessee—both leaner and bolder—will leave us behind.
To truly secure prosperity, Texas needs more than a six-step patch. It needs a three-step plan for elimination.

The Three-Step Plan to End Property Taxes

Step 1: A Stronger Constitutional Spending Limit.

Texas currently has five state spending limits—but most are riddled with loopholes. We need one simple, enforceable rule: All state and local government spending must grow slower than population growth plus inflation. Exceeding that limit should require at least a two-thirds supermajority vote. Fiscal responsibility isn’t partisan; it’s arithmetic.

Step 2: Use Surpluses to Buy Down Property Taxes.

Every surplus dollar taken from taxpayers should go toward permanent tax rate compression—not new programs. This surplus buydown model already works at the state level, but has been watered down with bad homestead exemption hikes and excessive spending, and could eliminate school district property taxes within a decade if lawmakers hold the line on spending.

Step 3: Replace Property Taxes with a Budget-Neutral Sales Taxes.

This could be matched to accomplish this quickly for school district M&O taxes, replaced with a broader-based 9% state-local sales tax rate (compared with the 8.25% rate today) that captures final consumption—not production.

Local governments should follow by taking the increased sales tax revenue from the base expansion to reduce their property tax rates then have some combination of a local surplus buydown or other paths to eliminate their property taxes (not the state).

This is the path to eliminating all property taxes and real ownership, not another round of “temporary relief.”

The Economic and Moral Case for Elimination
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Property taxes are fundamentally unjust. They punish investment, discourage homeownership, and treat property not as something you own but something you lease from the state. If you can lose your home for failing to pay, you don’t own it—you’re renting it.

Property taxes also hit the poor hardest. Renters pay through higher rents, workers through lower wages, and entrepreneurs through lost capital. These taxes distort housing markets, drive up costs, and slow growth. More importantly, they violate a moral truth: once you’ve paid for your property, you shouldn’t have to rent it every year.

The solution isn’t more carveouts, exemptions, or political “caps.” It’s sustainable budgeting and a modern, consumption-based tax system designed for the 21st century.

The Moment for Boldness

Governor Abbott’s plan moves the debate in the right direction—but Texas must go further. “Relief” isn’t enough. Texans want ownership. They want simplicity, transparency, and a government that spends less so they can save, invest, and build more. If the governor pushes forward boldly—pairing sustainable budgeting with surplus buydowns and a budget-neutral tax swap (not revenue neutral to emphasize less spending)—Texas could become the model for every other state.

If he stops short, our tax burden will keep creeping upward, our debt will keep rising, and our competitiveness will keep slipping. Texas will keep looking a little more like California and a lot less like the freedom-focused Texas we love.

Spending less must be the rallying cry for every fiscal conservative, policymaker, and taxpayer who wants Texas to lead again. Spend Less, Prosper More isn’t just a motto—it’s the only way to preserve ownership and opportunity for generations to come.
​
For more on how Texas and other states can end property taxes and restore true ownership, visit my writings.

He’s right that capitalism has lifted more people out of poverty than any government program ever could. But claiming that Texas is its headquarters misses an uncomfortable truth: our state is drifting away from the principles that made it great.

I responded:
​
“Texas can’t claim to be the HQ of capitalism while excessive spending and crony corporatism still run the show.”

He’s not wrong. Texas politicians talk about free enterprise while practicing a form of crime corporatism—where profits depend on proximity to power rather than productivity.

Capitalism vs. Cronyism

True capitalism is rooted in voluntary exchange, competition, innovation, and personal responsibility. It’s the system that rewards value creation and drives economic progress.

Cronyism, on the other hand, uses the language of markets to justify government favoritism. It’s when politicians decide which firms get subsidies, abatements, or tax breaks—and which don’t.

Look around Texas today. Programs like the Texas Enterprise Fund and local Chapter 313 and 403 property tax abatements transfer taxpayer money to politically favored corporations under the banner of “economic development.” In practice, they distort competition and punish smaller, homegrown businesses that play by the rules.
​
That’s not capitalism. It’s the same interventionist logic that policymakers in Washington, California, and Brussels use when they subsidize electric vehicles, chip manufacturing, or “green energy.” The label may sound different, but the economics are identical: government picks winners and losers, and taxpayers pick up the tab.

​The Spending Problem
​
This fiscal drift is made worse by runaway spending. Texas’s state budget has grown far faster than population growth plus inflation over much of the past two decades.

Source: https://www.vanceginn.com/letpeopleprosper/responsible-state-budgets-across-the-us

When government grows faster than the economy that funds it, the burden inevitably shifts to taxpayers—either through higher taxes, higher debt, or slower private-sector growth.

Economists call this the crowding-out effect: as government consumes more resources, fewer remain available for private investment and entrepreneurship. Over time, that erodes the very dynamism that once made Texas stand apart.

If current trends continue, Texas risks following the same path as states like California—a place that once embodied opportunity but lost its competitive edge to regulation, spending excess, and political patronage.

The Real Texas Model

The Texas Model that once set the standard nationally wasn’t built on subsidies or bureaucratic growth. It was built on limited government, low taxes, and economic freedom.

Those principles attracted millions of families, entrepreneurs, and employers seeking a fair chance—not a government favor. But when state leaders chase headlines through new incentives and “economic development” packages, they signal to the market that prosperity comes from politics, not productivity.

If Texas truly wants to be the “HQ of capitalism,” it must return to what works:

• End corporate welfare and targeted subsidies. Let all firms compete on merit.
• Adopt strict spending limits tied to less than population growth plus inflation.
• Cut taxes. Broad-based relief beats narrow giveaways every time.
• Streamline regulation. Free markets flourish when policymakers trust people more than processes.

Learning from History

Every time governments try to manage capitalism, they eventually manage decline. We’ve seen it before. In the 1970s, Britain’s industrial policy was supposed to “save jobs”; it nearly bankrupted the nation. Japan’s “targeted development” strategy produced short-term gains but long-term stagnation. And California’s subsidies haven’t stopped its outmigration—they’ve accelerated it.

Texas doesn’t need to repeat those mistakes. The state already has the most important ingredients for success: a strong entrepreneurial culture, a diverse economy, and people who value freedom. What’s possibly missing is the discipline to govern by principle instead of politics.

The Way Forward

Capitalism isn’t about handouts or headquarters—it’s about freedom, risk, and reward. If Texas wants to lead the nation, it must restore the fiscal and moral foundations that made it exceptional.

That means less central planning, fewer carveouts, and a renewed focus on letting people keep more of what they earn.

Prosperity doesn’t come from the government’s spending pen. It comes from the creativity, hard work, and responsibility of Texans themselves.
​
That’s how we make Texas truly free again. That’s how we let people prosper!

Government Spending Is The Problem

The late, great economist Milton Friedman said, "The real problem is government spending." This is true as spending comes before taxes or regulations. If people didn't form a government or politicians didn’t create new programs, then there would be no need for government spending and no need for taxes. And if there were no government spending or taxes to fund spending, then there would be no one to create or enforce regulations. 

​While this might sound like a utopian paradise, which I desire, there are essential, limited roles for governments outlined in constitutions and laws. Of course, most governments are doing much more than providing limited roles that preserve life, liberty, and property. This is why I have long been working diligently for decades to enact strong fiscal rules, including a spending limit, for federal, state, and local governments. My calling is to "let people prosper," as effectively limiting government support promotes more liberty and, therefore, more opportunities to flourish.

Empirical research underscores the importance of spending restraint over tax hikes in promoting economic growth. Studies by economists Alberto Alesina and Silvia Ardagna, John Taylor, Casey Mulligan, and others have consistently shown that fiscal adjustments based on reducing government spending are more effective at fostering economic growth than those based on raising taxes.

Fortunately, multiple state think tanks have championed this sound budgeting approach through what they've called either the Responsible, Conservative, or Sustainable State Budget. I recently worked with Americans for Tax Reform to publish the Sustainable Budget Project, which provides spending comparisons and other valuable information for every state. This groundbreaking approach was recently outlined in my co-authored op-ed with Grover Norquist of ATR in The Wall Street Journal and has been discussed at NRO, the Club for Growth Foundation, and elsewhere.

When Did This Budget Approach Begin?

I began this approach in 2013 with my former colleagues at the Texas Public Policy Foundation, focusing on the Conservative Texas Budget. The approach is a fiscal rule based on an appropriations limit that covers as much of the budget as possible, ideally the entire budget, with a maximum amount based on the rate of population growth plus inflation and a supermajority (two-thirds) vote to exceed it. A version of this approach was initiated in Colorado in 1992 with the passage of their Taxpayer's Bill of Rights (TABOR), which key individuals like Dr. Barry Poulson and others championed  (picture below is from a road sign in Texas).

Why Population Growth Plus Inflation?

​While there are many measures to use for a spending growth limit, the rate of population growth plus inflation provides the best reasonable measure of the average taxpayer's ability to pay for government spending without excessively crowding out their productive activities. It is essential to look at this from the taxpayer’s perspective rather than the appropriator’s view, given that taxpayers fund every dollar that appropriators redistribute from the private sector. Population growth, combined with inflation, is also a stable metric that reduces uncertainty for taxpayers (and appropriators), essentially freezing inflation-adjusted per capita government spending over time. ​

The research in this space is clear that the best fiscal rule is a spending limit based on the rate of population growth plus inflation, rather than gross state product, personal income, or other growth rates. Population growth, combined with inflation, typically grows more slowly than these different rates, allowing more money to remain in the productive private sector, where it belongs.

To get technical for a moment, personal income growth and gross state product growth are essentially equivalent to population growth plus inflation plus productivity growth. There's no reasonable consideration that the government is more productive over time, so that term would be zero, leaving population growth plus inflation. And suppose you consider the productivity growth in the private sector. In that case, more money should be allocated to the more productive sector at the margin for the highest rate of return, leaving just population growth and inflation.

Population growth plus inflation becomes the best measure, no matter how you look at it.

Given the high inflation recently, it is wise to use the average growth rate of population growth plus inflation over several years to smooth out the increased volatility (ATR's Sustainable Budget Project uses the average rate over the three years before a session year). And this rate of population growth plus inflation should be a ceiling, not a target, as governments should be appropriating less than this limit. Ideally, governments should freeze or reduce spending at all levels of government to provide more room for tax relief, less regulation, and more money in taxpayers' pockets.

Overview of Conservative Texas Budget Approach

This approach was partially introduced into state law in Texas in 2021 with Senate Bill 1336, as the state already has a spending limit in its constitution. The bill improved the limit to cover all general revenue ("consolidated general revenue") or 55% of the total budget rather than just 45% previously, base the growth limit on the rate of population growth times inflation instead of personal income growth, and raise the vote from a simple majority to three-fifths of both chambers to exceed it instead of a simple majority. 

Some improvements should be made to the recent statutory spending limit change in Texas, such as enshrining it in the constitution and adjusting the growth rate to reflect population growth plus inflation, rather than population growth times inflation calculated by (1+pop)*(1+inf). This limit is one of the strongest in the nation, as historically the gold standard for a spending limit of Colorado's Taxpayer Bill of Rights (TABOR) has been watered down over the years by its courts and legislators, as it currently covers just 43% of the budget instead of the original 67%. 

Unfortunately, the weaknesses in Texas' expenditure limits, including the weak constitutional spending limit and the consolidated general revenue spending limit, have contributed to excessive spending in recent years. The table below highlights the Texas House and Senate budgets for the latest 2026-27 biennium. The Legislative Budget Board's Reported Budget compares spending to appropriations, which is like comparing apples to oranges. Both are expenditure types, but appropriations are at the beginning or during the budget period, while spending is at the end. The table also includes the Budget Since 2024-25 with an apples-to-apples comparison between initial appropriations in each biennium. The budget since 2023, which uses this consistent comparison from 2022-23 to the proposed 2026-27 appropriations, shows that appropriations of state funds are up 42.6%. These are historically significant increases in such a short period and are a primary reason for concern. 

The figure below shows how the growth in Texas’ biennial budget was cut by 13.3% from 12% to 10.4% after the creation of the Conservative Texas Budget in 2014, which first influenced the 2015 Legislature when crafting the 2016-17 budget, along with changes in the state’s governor (Gov. Greg Abbott), lieutenant governor (Lt. Gov. Dan Patrick), and some legislators. ​The 10.4% average growth rate of biennial appropriations since 2016 was below the 9.3% biennial average rate of population growth plus inflation, which was driven substantially higher after the latest 2024-25 budget that is well above this key metric (previously, the biennial budget growth was 5.2% compared with 9.3% in the rate of population growth plus inflation). ​

Making matters worse, the growth of the budget has increased substantially faster than population growth plus inflation in Texas since Republicans gained their first trifecta in control of the Governor's mansion, Senate, and House in 2003. Their first budget was in 2004-05, which the work of House Appropriations Chairman Talmadge Heflin (one of my wonderful mentors) helped address by addressing a budget shortfall without raising taxes but through spending cuts and restraint. The figure above highlights how the budget has grown nearly 30% faster than the average taxpayer's ability to pay for it over this period. The figure above illustrates how these excesses have accumulated over time, resulting in massive spending and substantial tax burdens on Texans. There is more work to do!​

Sustainable Budget Work With Other States, ATR, and CFGF

When I returned to the Texas Public Policy Foundation in May 2020, I sought to regain a sense of freedom during the COVID-19 pandemic and be closer to family. I started an effort to work on this sound budgeting approach with other state think tanks. This contributed to my working with many fantastic people who are trying to restrain government spending at the state, local, and federal levels. Here are my latest data on the federal and state budgets as part of American for Tax Reform's Sustainable Budget Project and a recent publication by the Club for Growth Foundation.

​From 2015 to 2024, the following happened:

Federal spending skyrocketed 88.0%—more than three times faster than the 27.6% increase in population and inflation.

• If Congress had restrained spending to this sustainable growth rate:
  • The federal government would’ve spent $2.2 trillion less in 2024.
  • The national debt would’ve fallen by $1.8 trillion instead of growing by $14.3 trillion.
  • Cumulative debt since 2005 would have risen by $2.5 trillion, not $21.7 trillion.
• That’s trillions of dollars that could’ve stayed in people’s pockets or been invested in future prosperity, not siphoned off to fund bloated bureaucracies and waste.

Aggregate state spending, by the 50 state governments, excluding funds received from the federal government, increased by 54.2% during that decade. 

• Had their spending grown by the maximum rate of 27.6% in population growth plus inflation from 2015 to 2024:
  • State governments would’ve spent $328 billion less than the $1.90 trillion in 2024.
  • Cumulative spending across that decade would have been $1.3 trillion less than what was spent, resulting in more money in people’s pockets.

Result: When combining federal and state overspending, Americans lost over $2.5 trillion in 2024 and more than $13.4 trillion in excess taxes and debt across the decade.

I hope that if we can get enough state think tanks to promote this budgeting approach, get this approach put into constitutions and statutes, and use it to limit local government spending as well, there will be plenty of momentum to provide sustainable, substantial tax relief and eventually impose a fiscal rule of a spending limit on the federal budget. This is an uphill battle, but I believe it is necessary to preserve liberty and provide more opportunities that let people prosper.

​Sustainable State Budget Revolution Across The Country

Below are the states and think tanks with which I'm working on this sustainable budget revolution. You can find an overview of this budgeting approach in Louisiana, which should be applied elsewhere. 

Here are the latest efforts:

1. Americans for Tax Reform released the Sustainable Budget Project, which compares every state's spending with population growth and inflation, along with valuable comparisons and data for each state.
2. Alaska: Alaska Policy Forum released the Responsible Alaska Budget.
3. Colorado: The Independence Institute recently released the Sustainable Colorado Budget.
4. Florida: James Madison Institute released the Conservative Florida Budget.
5. Iowa: Iowans for Tax Relief Foundation released the Conservative Iowa Budget.
6. Kansas: Kansas Policy Institute released the Responsible Kansas Budget.
7. Louisiana: Pelican Institute released the Responsible Louisiana Budget, see comparison of RLB with ATR's Sustainable Budget project.
8. Michigan: Mackinac Center released the Sustainable Michigan Budget.
9. Mississippi: Mississippi Center for Public Policy released the Responsible Mississippi Budget.
10. Montana: Frontier Institute released a Conservative Montana Budget and a report on Responsible Local budgets.
11. South Carolina: SC Policy Council released the South Carolina Sustainable Budget. Oconee County Council in South Carolina employed this approach and submitted its sustainable budget. 
12. Tennessee: Beacon Center released the Conservative Tennessee Budget.
13. Texas: Texas Public Policy Foundation released the Conservative Texas Budget and Responsible Local Budgets. Texans for Fiscal Responsibility released a similar metric.
14. Federal: The Let Americans Prosper Project, along with the Responsible American Budget, aims to rein in federal government spending to support fiscal sanity in Washington, D.C., which is essential for the future of our country.

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If you're interested in pursuing this initiative in your state, please don't hesitate to contact me.

For more details, check out these write-ups on this issue by Grover Norquist and me at WSJ, Dan Mitchell at International Liberty, and The Economist.

​Is America’s debt crisis the biggest threat to prosperity—and can we fix it before it’s too late?

In this week’s Let People Prosper Show, I sit down with Romina Boccia, one of the nation’s top fiscal minds and a fearless reformer when it comes to Washington’s runaway spending. Romina is the Director of Budget and Entitlement Policy at the Cato Institute, where she leads research on federal spending, debt, and entitlement reform. She’s also the principal author of Debt Dispatch—the number-one fiscal newsletter read by members of Congress—and author of the new book Reimagining Social Security: Global Lessons for Retirement Policy Changes.

I first met Romina during my time at the White House Office of Management and Budget, and I’ve admired her work ever since. In this episode, we talk about her journey from Germany to D.C., how she became one of the fiercest advocates for limited government, and why entitlement reform isn’t just a numbers issue—it’s about moral responsibility to future generations.
We unpack why the national debt—now over $37 trillion and rising by about $2 trillion a year—is a bipartisan failure decades in the making. Romina explains how unchecked spending, not too little revenue, is driving the crisis—and why sustainable reform to Social Security and Medicare is critical to preserving both freedom and prosperity.

For more insights, visit vanceginn.com. You can also get even greater value by subscribing to my Substack newsletter at vanceginn.substack.com. Please share with your friends, family, and broader social media network. 

(0:00) – Introduction and Guest Background
(3:00) – Romina’s Journey from Germany to D.C.
(9:00) – The U.S. Debt Crisis and Its Root Causes
(18:00) – Entitlement Reform and Political Obstacles
(27:00) – Lessons from Reimagining Social Security
(36:00) – Immigration, Growth, and Fiscal Health
(45:00) – Restoring Sustainable Budgeting
(54:00) – The Future of Fiscal Reform