Vance Ginn Economics
  • Home
  • About
  • CV
  • Media
  • Podcast/Speeches
  • Blog/Research
  • Research
  • Teaching
    • ECON 2301-Princ of Macro
    • ECON 2302-Princ of Micro
    • ECON 3352-Energy Eco
  • Home
  • About
  • CV
  • Media
  • Podcast/Speeches
  • Blog/Research
  • Research
  • Teaching
    • ECON 2301-Princ of Macro
    • ECON 2302-Princ of Micro
    • ECON 3352-Energy Eco

Testimony Before Texas House Ways & Means Committee on Eliminating Property Taxes (HB 285)

8/2/2017

 
I appreciated the opportunity to testify before the Texas House Ways & Means Committee regarding eliminating property taxes in Texas and replacing them with a reformed sales tax that would have a sufficiently broad base for the lowest rate, along with making structural reforms to local spending. 

House Bill 285 would eliminate school district M&O property taxes and replace them with a 12 percent sales tax rate, which would leave other property taxes in place that have risen at a faster rate while not expanding the tax base to achieve a lower rate. Regardless, the Foundation is encouraged with the discussion about eliminating property taxes.

But there are ways to improve this bill and others discussed at the hearing that would take only a piecemeal approach in eliminating property taxes, which both property taxes and sales taxes should never be on property. The elimination of all property taxes should be combined with structural reforms to student-centered funding in public education and spending limits on local governments, which excessive spending is the true driver of higher tax burdens.

I provided in-depth research and data on these issues to hopefully move the ball toward eliminating burdensome property taxes on Texans once and for all. 

Check out the press release here: ​http://mailchi.mp/texaspolicy/today-tppfs-vance-ginn-to-testify-on-eliminating-property-taxes-in-texas.

Below is my written testimony with links to data and other research:
Testimony on HB 285
File Size: 136 kb
File Type: pdf
Download File

Walter Rybeck
8/3/2017 08:09:09 am

What the proposal ignores is that the property tax is both one of the worst taxes and one of the best.

The worst part is the tax on improvements--houses, commercial structures, factories,barns, orchards. Taxing improvements discourages their creation and penalizes good maintenance.

The best part is the tax on the land or location value of each parcel. It lets the property owners pay for the privilege of the special benefits their sites enjoys, not through any efforts or contributions on their part, but due to the community-provided amenities such as roads, schools, police protection and so forth. Failure to collect this land tax promotes land speculation which undermines the economic health of communities and distorts the free market of the development industry.

What's needed therefore is not elimination of the property tax but rather a major reduction (or elimination) of the portion of the tax that falls on man-made improvements. Many examples of where this has been done reveal that it results in less urban sprawl, fewer slums, revived downtowns and more affordable housing.

Dan Sullivan link
8/4/2017 11:13:51 am

Property tax keeps housing prices stable and affordable. Consider that the two fastest-growing states during the last half of the 20th Century were Texas and California. Yet real estate prices rose slowly and steadily in Texas, but in California, after they restricted property taxes with Prop 13, real estate prices rapidly rose and fell, making it and Nevada the leading states for mortgage foreclosures. (Nevada also has very low real estate taxes due to revenue from minerals and from gambling.)

Before Prop 13, California's "affordability index" was only 10% higher than the national index. Today it is well over 3 times as high. 23 of the 25 least affordable cities in the country are in California.

Meanwhile, for of the six *most* affordable cities are in Texas (Abilene, Wichita Falls, Corpus Christi and San Antonio). Lest anyone think this affordability difference is due to climate, let me point out that dusty nasty Bakersfield, with nothing but vinyards and oil derricks, is less affordable than Austin, the garden city of Texas.

Sales tax, on the other hand, is the most economically destructive tax one could choose. It helps established monopolies by falling particularly hard on new startup businesses, whose profits are often far less than the sales tax would take away.

The *only* bad feature of property tax is that elderly residents pay it. This can be offset by giving each municipality the power to give a per capita grant to people over 65. The rebate could be up to the amount paid in property taxes on homes with elderly people in them.


Comments are closed.

    Vance Ginn, Ph.D.
    Chief Economist
    ​TPPF
    ​#LetPeopleProsper

    Vance Ginn, Ph.D., is founder and president of Ginn Economic Consulting, LLC. He is chief economist at Pelican Institute for Public Policy and senior fellow at Young Americans for Liberty and other institutions. He previously served as the associate director for economic policy of the White House’s Office of Management and Budget, 2019-20.

    Follow him on Twitter: @vanceginn

    View my profile on LinkedIn

    Archives

    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    January 2015
    November 2013
    September 2013
    May 2013
    February 2013
    August 2012
    July 2012
    January 2012
    May 2011
    April 2011

    Categories

    All
    Biden
    Book Reviews
    Budgets
    Capitalism
    Carbon Tax
    Congress
    COVID
    Debt
    Economic Freedom
    Economic Prosperity
    Economy
    Education
    Energy Markets
    Fed
    Free Trade
    Ginn Economic Brief
    Healthcare
    Immigration
    Inflation
    Interview
    Jobs Report
    Let People Prosper
    Licensing
    Louisiana
    Margin Tax
    Medicaid
    Minimum Wage
    Occupational Licensing
    Opportunity Project
    Pensions
    Podcast
    Poverty
    Property Taxes
    RAB
    Regulation
    Rules
    School Choice
    Socialism
    Spending Limits
    Taxes
    Tax Foundation
    Testimony
    Texas
    Transparency
    Video
    White House

    RSS Feed

Proudly powered by Weebly