Originally published on Substack. 

​Texas ranks fourth nationally with an overall score of 8.15 in the Economic Freedom of North America report recently published by the Fraser Institute.

The ranking, based on 2023 data, places Texas firmly among the most economically free states in the country.
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But the more important signal in the data is not where Texas ranks now. It is how the state has had excessive spending and high property taxes weigh on economic freedom today and in the coming years.

Texas’s economic success is visible first in the labor market.

According to the Bureau of Labor Statistics, Texas had one of the fastest job creation rates in 2023 (and thereafter). Employment growth has consistently exceeded the national average, while unemployment rates have generally remained below the U.S. rate.

When marginal tax rates on work are zero and labor markets are flexible, employers expand, and workers respond.

The economic output data tell the same story.

The Bureau of Economic Analysis shows that Texas’s real GDP growth was a leader in 2023, driven by private-sector expansion. Capital flows toward jurisdictions where expected after-tax returns are higher, and policy risk is lower. Texas has benefited from that reality for decades.

The EFNA index explains why.

Texas scores well on taxation and labor-market regulation, largely because it imposes no personal income tax and maintains comparatively flexible employment rules. Those institutional features reduce distortions on work, saving, and investment, raising long-run growth potential.

Yet the same EFNA data also reveal why Texas’s ranking has flattened rather than improved in recent years. The binding constraint today is not necessarily taxes or labor policy. It is government spending growth at the state and local levels.

Since at least the mid-2010s, state and local spending in Texas has grown substantially faster than population growth plus inflation, meaning government now consumes a larger share of personal income than it once did.

EFNA measures spending relative to income because this ratio determines how much private activity is crowded out. When the government expands faster than the economy and taxes rise to fund it, economic freedom declines.

Property taxes are the primary transmission mechanism.

Texas constitutionally bans income taxes, wealth taxes, and state property taxes, but relies heavily on sales taxes to fund state spending and local property taxes to finance local budgets.

Property-tax collections have risen faster than household incomes, raising effective tax rates even when statutory rates appear unchanged.

From an economic perspective, this is not neutral. Higher property taxes can raise the cost of housing and capital formation, reduce real wages over time, and slow investment, especially in high-tax metropolitan areas.

Public-sector employment growth reinforces the trend.

BLS data show government employment rising faster than private employment in recent years. EFNA penalizes this pattern because it signals higher future tax burdens or debt service.

Economic theory predicts the outcome: slower productivity growth and weaker private-sector dynamism.

Directionally, Texas has held its rank while peer states have closed the gap. That is an important distinction.

The EFNA report relies on 2023 data, which means recent policy changes about restraint are not yet reflected. What is reflected is the cumulative effect of spending decisions made over the past decade.

Rankings move slowly because institutions change slowly. That is a feature, not a flaw.

The Fraser Institute’s findings are consistent across time and geography. States with higher economic freedom exhibit higher income levels, stronger labor-force participation, faster job creation, and greater net in-migration.

Texas still benefits from those advantages. But the data now show that fiscal drift could erode the margin.

The lesson is not ideological. It is arithmetic. Economic freedom helped build the Texas Model. Preserving it now requires discipline.

If government spending growth continues to outpace population growth plus inflation, Texas’s comparative advantage will narrow, then disappear. Growth can mask that reality for a while. It cannot undo it.

Originally published on Substack. 

​​If you want a clear snapshot of what’s contributing to Texas’ affordability crisis, look no further than property tax bills.

A recent Houston Chronicle article by EricaGrieder highlighted just how punishing these taxes have become in fast-growing suburbs of Houston.

​Cities like Conroe, Pearland, and The Woodlands now rank among the highest in property-tax burdens in the nation when measured as a share of household income.

In Conroe, homeowners pay a median property tax bill of nearly $5,900 on a median household income just over $114,000—5.2% of income. Pearland isn’t far behind near 5%. Even high-income areas like The Woodlands face bills approaching $9,000 a year.

This isn’t just a Texas problem, but it is becoming a Texas test. And the verdict is clear: property taxes are harsh, unworkable, and incompatible with prosperity.

Why Property Taxes Are So Harmful
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Property taxes don’t rise automatically because “the market” failed. They rise because local governments choose to spend more, then set the tax rate to collect more taxes that cover spending.

Local taxing entities—school districts, cities, counties, and special districts—set tax rates every year. Those rates are applied to the county’s appraised values that tend to rise quickly over time, especially in growing communities. Even when officials claim they’ve “lowered the tax rate,” it is often not enough to offset higher appraisals when spending continues to grow.

In other words, appraisals help set the base—but spending decisions determine the bill and the tax rate to get there.

That’s why property taxes are uniquely destructive. All taxes are destructive but some more than others. Families can budget for purchases and sales taxes. They can plan their work or leisure around income taxes. But property tax payments are due regardless of income, job loss, or retirement—driven by government budgets, not household choice.

Data from SmartAsset confirm this reality nationwide.

Their 2025 study shows Texas ranks among the states with the highest effective property-tax burdens, a point echoed by the Tax Foundation.

This tax system punishes homeownership. It turns ownership into something closer to renting from the government.

The Moral Case Against Property Taxes

There’s also a deeper issue here—one that often gets ignored.

Property taxes violate the basic principle of property rights.

If you must keep paying the government simply to remain in your home, then you don’t truly own it. And for seniors on fixed incomes, young families stretching to buy their first home, or small businesses operating on thin margins, that’s not just inefficient—it’s unjust.

These taxes are fueling the affordability crisis created by years of bad policy: excessive spending, loose fiscal rules, and governments that grow faster than the taxpayers’ ability to pay for it.

Families didn’t create this problem. Government did.

A Responsible Path to Elimination

The good news is that eliminating property taxes can be done responsibly—without gimmicks, carve-outs, or distortions like ever-larger homestead exemptions, flawed appraisal caps, or arbitrary age freezes, which have been thrown around by key leaders in Texas.

The most realistic path forward currently is likely a surplus buydown strategy, paired with strict spending limits, which Gov. Abbott rightfully made a local spending limit the number one item in his property tax plan.

Here’s how it works:

• At the state level, use budget surpluses—generated by economic growth, not tax hikes—above a strict spending limit to permanently compress (“buy down”) tax rates and eliminate school district M&O property taxes, starting immediately and continuing until they reach zero.
• At the local level, cities, counties, and special purpose districts should adopt the same approach simultaneously, using surpluses above the state’s population growth plus inflation to eliminate their property taxes over time. In places that can’t, they should consider refining in spending to reduce property taxes, join a compact with nearby localities for services and funds, and consider ways for more growth in a sales tax base to eliminate them.
• Rollback rates must become true no-new-revenue rates, and exceeding them should require a supermajority vote of voters, not politicians, on a uniform election date.

The key is discipline. None of this works without strict limits on spending growth, ideally capped below population growth plus inflation. Spending is the ultimate driver of property taxes—and the ultimate burden of government.

What About Other Options?

There is a faster, more comprehensive option: redesigning the tax system by broadening the sales-tax base without a VAT while keeping the state-local sales tax rate competitive, potentially eliminating property taxes much sooner than the surplus buy-down approach. The state’s sales tax rate would just cover the school district property taxes and local governments’ sales tax rates would cover their property taxes where possible.

My research finds that we could be at a state-local sales tax rate of at most 8.75% with a broader sales tax base from 8.25% today to eliminate school district M&O property taxes.

Any additional sales tax revenue collected by local governments at their lower rates from the broader sales tax base and dynamic growth must go to reducing their property taxes through tax rate cuts.

This allows lower local property taxes, then local governments can use the surplus buydown approach to eliminate the rest, where possible.

Done correctly, dynamic growth effects and spending restraint should lower the overall tax burden and deliver immediate property ownership to all Texans.

In my view, this redesign approach is stronger.

But politically, the surplus buydown seems the most viable path today—and importantly, it still moves us in the right direction.

Either way, the non-negotiable principle remains the same: less spending, not higher taxes.

States like Florida are beginning to explore similar pro-growth approaches, recognizing that affordability and competitiveness depend on limiting government’s footprint—not expanding it.

The Bottom Line

Property taxes are not a law of nature. They are a policy choice.

Texas can lead by choosing a better path—one that respects ownership, restores affordability, and lets families keep more of what they earn.

Eliminating property taxes won’t solve every problem overnight, but it would remove one of the biggest obstacles standing between Texans and prosperity.

The question isn’t whether we can afford to do this.

It’s whether we can afford not to.

Originally published at The Center Square. 
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Texas has long been home to companies that grow not because the government clears the road for them, but because they innovate, compete, and persevere. Kimberly-Clark, based in Irving, is one of those firms. For decades, it has shown that American manufacturing and consumer-product ingenuity can thrive when markets, not regulators, set the terms.

Its plan to acquire Kenvue, maker of well-known products like Tylenol and Band-Aid, is the latest example of market dynamism working as intended. Some in Washington view any large merger with suspicion. Texans tend to see something different. Mergers and acquisitions often lead to more investment, higher productivity, and better prices for families. According to Reuters and CNBC, this nearly $48.7 billion deal could deliver all three.

​The combined company would be better positioned to compete in a global marketplace where scale matters. Producing consumer health and personal-care products requires large capital commitments. Companies must invest in supply chain resilience, product safety, research, development, and compliance. Inflation and regulatory costs have pushed those expenses even higher. 

By joining forces, Kimberly-Clark and Kenvue can streamline manufacturing and logistics and eliminate duplication. These efficiencies free up resources for innovation and can help make essential goods more affordable for families.

Critics often claim mergers reduce consumer choices. That view ignores how competition actually works. Kimberly-Clark faces significant pressure from global players like Unilever, private-label brands offered by major retailers, and a steady stream of niche competitors. Market share is not guaranteed in this industry. It must be earned daily. The idea that acquiring Kenvue would suddenly give Kimberly-Clark the power to dictate prices or restrict choices does not reflect the reality of a crowded and highly competitive marketplace.

Strategic acquisitions also play a central role in supporting entrepreneurship. Many startups rely on the possibility of being acquired as a reward for early investors. This cycle encourages new entrants, experimentation, and risk-taking. When regulators attempt to block mergers simply because the companies involved are large, they choke off an essential channel of capital formation. The result is fewer competitors and less innovation.

​This is why a more grounded antitrust approach developing in Washington is encouraging. Gail Slater, the head of the DOJ’s antitrust division, indicated that she intends to focus on mergers that genuinely threaten competition and allow transactions that do not harm consumers to move forward. This direction aligns with the consumer welfare standard, which has guided U.S. antitrust for decades. The standard requires evidence that a merger will raise prices, reduce quality, or slow innovation. It does not treat success or scale as a problem to be solved.

The Biden administration often treated size itself as a warning sign. Agencies pursued lawsuits based on political concerns about big companies rather than concrete evidence of anticompetitive behavior. That approach created uncertainty, discouraged investment, and made it harder for firms to grow and compete globally.

Kimberly-Clark’s proposed acquisition of Kenvue is a chance to re-center antitrust policy on what matters most: consumer outcomes. No merger is flawless, and no deal deserves a free pass. But there is no basis to stop a transaction simply because the companies involved are familiar names. The important question is whether the deal harms consumers. Nothing in this case suggests it will.

Competition comes from innovation and consumer choice, not from agencies trying to engineer outcomes from Washington. When the government steps back and lets markets evolve, companies invest more, hire more, and build more value for families. Kimberly-Clark’s bid for Kenvue reflects confidence in American competitiveness and in Texas as a place where businesses can grow.

That is a vision worth supporting.

Originally published at The Houston Chronicle.

Families don’t need new mandates or entitlements. They need policies that let them keep more of what they earn today.
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Washington’s new Trump Accounts program is being presented as a patriotic way to invest in America’s children. 

Every newborn from 2025 through 2028 will receive a taxpayer-funded $1,000 account, invested in market index funds and restricted until age 18. It sounds hopeful and future oriented. 

Now Texas Lt. Gov. Dan Patrick wants to create a matching state program called the “New Little Texan Savings Fund” that would give every newborn in Texas an additional $1,000 from taxpayers.

The message feels compassionate, but nothing the government gives is free. Texas taxpayers should be wary.

Trump Accounts function as a form of universal baby income paid for by today’s taxpayers and sustained by tomorrow’s taxpayers. Patrick’s proposal would commit Texans to a permanent, constitutional obligation before we understand its long-term fiscal and economic consequences... 

Read the full article at The Houston Chronicle. 

Originally published on Substack. 

A recent post on X from Barrett Lindberg made the rounds, warning Texans that eliminating property taxes is “a mathematical lie.” His thread paints a dramatic picture: Texas balanced on a “two-legged stool,” forced to choose between sky-high sales taxes or deep state control over local communities. According to him, property-tax elimination is not just unrealistic—it’s dangerous.

Here’s Barrett’s analysis if you haven’t seen his post on X.

He makes good observations about the structure of Texas finances, the role of local governments, and the mechanics of school finance. But the conclusions are ultimately flawed because they miss the most important point: the problem is not taxation—it’s spending. And spending at every level of Texas government is growing far faster than Texans’ ability to pay.
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I said as much in my response.

Barrett is right that you can’t “delete $81 billion” of property taxes without replacing it. What he overlooks is that Texas doesn’t need to replace every dollar—it needs to spend less!

That’s the heart of the issue. And the only way to build a future of real homeownership and prosperity is to confront spending directly, not hide behind doomsday math. That’s the way in Washington, but shouldn’t be the way in Texas.

The Real Problem: Overspending, Not Undertaxation
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Local property taxes in Texas now exceed $80 billion per year, up roughly 70 percent from 2015 to 2024, while population growth plus inflation rose only 50 percent. That’s not the “two-legged stool” Barrett describes. That’s a spending stool whose legs keep growing while Texans keep shrinking under the weight.

And it’s not just schools. Cities, counties, hospital districts, appraisal districts, and special taxing districts have been expanding their budgets year after year. When government gets bigger, property taxes follow—no matter what relief gimmicks lawmakers pass.

This is why homestead exemptions don’t solve anything. They don’t reduce spending; they simply shift the tax burden from one group of taxpayers to another.

If Texas doesn’t restrain spending, then no tax structure—three-legged or two-legged or twenty-legged—will ever feel stable.

The Moral Failure: Texans Shouldn’t Have to Rent Their Homes from Government

Property taxes are not just inefficient; they are immoral. They violate the basic principle that individuals should control the value they create and the property they acquire through voluntary exchange. Once a homeowner pays off the mortgage, that home should be theirs—secure, not subject to a perpetual ransom demanded by local government.

No tax that allows the government to seize your home for nonpayment should ever be defended as “good policy.”

Property taxes are also highly regressive. The Texas Comptroller’s Suits Index shows that property taxes fall hardest on lower- and middle-income families. Meanwhile, renters pay property taxes in their rent, and small businesses pay them through commercial leases. The economic burden is everywhere, even where the tax bill isn’t.

Barrett is correct that property taxes hit high-value properties. But he ignores the enormous harm to families trying to build wealth or retire in dignity. If the state’s goal is prosperity, mobility, and ownership, property taxes are the most anti-ownership tax imaginable.

For more on this, check out my property tax research archive.

The Economic Path Forward: Sustainable Budgeting

Now to the economics. Barrett warns that replacing property taxes would require a 20 percent sales tax. But that’s only true under one assumption: that government continues spending at today’s levels.

Texas doesn’t have a revenue problem. It has a spending problem.​

The real solution is simple: adopt a sustainable budget—lower spending now and a growth limit that keeps state and local spending increasing slower than population growth plus inflation thereafter. When spending stays below that threshold, surpluses naturally emerge. Those surpluses should be used to permanently buy down school district property taxes through rate compression—the first and largest component of the levy.

Texas already dipped its toes into this model with tax-rate compression, which Barrett praises. But compression alone is not a long-term strategy because it still allows local spending to grow faster than the average taxpayer’s ability to pay.
The sustainable budget model is a short-run and long-run strategy.

If lawmakers embraced a strict spending limit and used every surplus dollar to buy down school district maintenance and operations property tax rates, Texas could eliminate school district property taxes quickly. Cities, counties, and other local covenants could do the same by holding spending below the limit and using their own surpluses to ratchet down their rates.

No 20 percent sales tax (this is fearmongering). No centralization (except school district funding which the state already controls). No fiscal cliffs (boom and bust cycles). Just disciplined budgeting (like many families).

The 21st-Century Solution: A Single, Simple Sales Tax

Barrett mocks the idea of a sales-tax-based system. But he misses the economic truth: broad-based consumption taxes are the least burdensome tax structure available.

Texas already relies heavily on sales taxes on final goods and services, but they’re riddled with exemptions. Clean up the base, remove carveouts, and modernize it for a 21st-century economy, and Texas could support core services with far less distortion and far more transparency.

This is the model I’ve written about for years:

• Sustainable budgeting with less spending and strict spending limits
• Broad, flat sales tax on final goods and services
• No income tax
• No property tax
• No other taxes or fees

A one-stool system—not the wobbly two-legged one Barrett describes. Think bar stool. Think barber stool. Sturdy. Simple. Hard to kick over.

What Texas Needs Now: Courage

Barrett’s final claim is that elimination “sounds like freedom, but it’s centralization.” What centralizes power is a finance system built on runaway spending and endless property taxes that force Texans into permanent dependence. What decentralizes power is letting Texans own their homes outright and forcing governments to live within their means.

Texas doesn’t need bigger taxes. It needs smaller government. It doesn’t need “rate compression forever.” It needs a path to elimination. It doesn’t need fear about the math. It needs courage, conviction, and leadership that trusts Texans more than bureaucracy.

The truth is simple:

Texas can eliminate property taxes.

Texas should eliminate property taxes.

And if policymakers embrace sustainable budgeting, Texas will eliminate them.
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Freedom begins when government spends less so Texans can prosper more.