Yesterday both the Dallas Morning News and Dallas Business Journal ran articles about the “Margin Tax.”  This tax is assessed to business owners and who will be remitting their first payments within 30 days.  Companies are complaining that the tax is unfair for various reasons.  I believe businesses  assessed by this tax would agree it is a corporate income tax which is prohibited by the Texas Constitution.  I am sure lobbyist for Texas business interest will lobby the Legislature next session to address issues which have arisen with this new tax.

I believe the larger question which needs to be addressed is how do we in Texas continue to become less dependant on property taxes to produce revenue for county, cities and school districts.  There is currently a group which is pushing a plan to use sales tax to replace property taxes.  On the surface that seems to me to be great idea if the state wants a recessive tax and wants to create black markets to avoid increased sales taxes.Â

I think we as Texans should examine all state and local taxes (SALT) to provide more revenue.  When one examines all fifty states we find that Texas actually ranks low in comparison to the other states in its SALT.  Another group has been and continues to call for a cap all property tax real estate values as was done in California under Proposition 13.  This resulted in drastic cut back in local jurisdictions abilities to provide goods and services,  not to mention the effect it would have on municipal bond holders.  Additionally, it transfered local control of revenue to the State of California.Â

If we Texans really want to reduce property taxes I believe the answer lies in increasing other SALT taxes and local fees for goods and services.   The voters would need to decide if the alternative of paying increased SALT and fees would be more palatable than paying ever increasing property taxes.  Or we Texans could created a state income tax which would effectively cut property tax rates in half.  This would require a constitutional amendment and would in my opinion be resit-ted by all taxpayers.  Additionally, it would result in more control by the state in local county, city and school issues and operations.