The headline story in last Wednesday's edition of The Dallas Morning News shouted out at our city, "Tax bill would benefit richest, analysis finds" (March 9, 2005, page 1A).
Did anyone hear or notice?
The only surprise here is the fact that the paper ran the report as the day's top story.
Consider the hard, cold facts for the poor in Texas:
- Only Texans in households making more than $100,000 would receive a net tax cut under this plan.
- On the other hand, the poorest 1.7 million households--families earning less than $23,000--would experience a net tax increase of more than 5 percent.
- The richest 840,000 households in the state--those making over $140,000--would enjoy at least a 3% net tax decrease.
- School property taxes would be cut by 33%--a big boost to homeowners whose equity assures a big advantage in terms of a family's net worth. I guess you can't blame the legislators on this one, after all they have been under pressure to "fix" Robin Hood, the state school finance bill. Never mind that the plan actually benefited 88% of the school districts in Texas. But then, I guess if you are living in the more powerful 12% who had to pay to help out the poorer districts you get what you want eventually.
- To pay for the cuts at the top the legislature suggests a 7.25% state sales tax, the highest in the nation. Great! Sales taxes disproportionately affect the poor. Texas likes regressive policies.
- The net effect will be an increase of $1.1 billion on all Texans earning under $100,000 annually.
- The wealthiest 20% of households will pay $437 million less.
Another interesting "wrinkle" in the plan relates to how different sectors in the economy fare under the new tax proposal. Businesses in the service sector--those that are labor intensive--will pay 20.5% more. Construction companies will pay 18.2% more. Now this should have a great affect on the wages of the working poor of our state, don't you think?
On the other hand, finance, insurance and real estate companies get a 11.5% ($897 million) windfall. Great for dividends!
Ain't Texas a grand place?
Of course, the poor among us still have the Senate to depend on for a more equitable plan. Now there is a confidence booster!
People who read the Bible--at least those who read all of the Bible-- ought to have something to say about this. Listen on Sunday when you go to church and let me know if you hear anything about this issue.
My money says the silence will be overwhelming.