April 15, 2013

Texans should prepare for another franchise tax screwing

It seems like the Texas GOP, and Tricky Ricky Perry in particular, really like to apply their warm but unfriendly yellow trickle-down economics to the state's franchise tax.

Per a business email:
Gov. Rick Perry today announced a four-point plan to provide nearly $1.6 billion in tax relief to all Texas businesses currently subject to the state’s franchise tax. The governor was joined by lawmakers, the Texas Association of Business (TAB), National Federation of Independent Business (NFIB) and Texas Conservative Coalition Research Institute for the announcement.

“By cutting taxes for Texas businesses, we are helping job creators in our communities and promoting economic growth across the state,” Gov. Perry said. “Businesses that keep more of their money can pass savings on to consumers, hire more workers, offer greater employee benefits or reinvest it into their companies and grow their business – all of which are good for Texans and our growing economy.”

Gov. Perry’s plan would reduce business taxes by:
•Reducing the franchise tax rates by 5%
•Providing a $1 million deduction for businesses with revenue up to $20 million
•Lowering the rate for EZ Form filers
•Giving companies relocating to Texas from out of state a one-time deduction of moving expenses in the first year they pay the franchise tax

Gov. Perry’s business tax relief plan would also have the effect of making permanent the current small business tax exemption. That exemption currently impacts 29,000 businesses and is set to expire in 2014.
This means, of course, that:
1. Schools will again be told to "lump it" on any chance of getting back the $5 billion cut two years ago.
2. There's going to be yet another school finance lawsuit in the works eventually, or, if this passes, it may become evidentiary in the appeal of the current suit, perhaps?

And, of course, this is part of Tricky Ricky's new "Chicago ads," especially that last bullet point, but somewhat No. 2. The ones promising, you know, well-trained employees. No mention of whether or not that includes the tops-in-the-nation percentage of people on Medicaid.

Fortunately, of course, Perry can't unilaterally cut taxes. This all has to be approved by the Lege. And, I'm sure the Legislative Budget Board's going to be asked to give some honest input.

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