On April 8, Rep. Dennis Bonnen, Chairman of the House Ways & Means Committee held a press conference to dicsuss his tax cut plan.
Bonnen
- Biggest, broadest and boldest tax plan this session
- $5 billion saved in permanent tax relief – average family will save $172 per year
- Sales and franchise tax cuts will preserve the integrity of the spending cap and shrink government
- Sales tax will be cut from 6.25 to 5.95 percent
- Franchise tax will be cut to 0.75 percent across the board for all businesses; 25 percent reduction – combined with the easy compilation for the under $20 million businesses
- Employers will experience greatest tax relief since they pay 40% of all sales taxes
- Texas currently has the 12th highest sales tax in America and will drop to the 26th highest with tax cuts
- Increase job growth over the next five years by double digits
- State government controls the franchise and sales tax but not property taxes – property taxes can quickly be swallowed up by local tax rate hikes and rising house appraisals
- Property tax cuts would lead to minimal economic benefit and potential spending cap busts
- Rep. Jim Murphy noted two studies(Beacon Hill and Tax Foundation) were compared to examine what would happen if the franchise tax was eliminated – result led to job growth in the double digits and increased personal income
- Total cost is $4.87 billion – $2.3 billion for sales tax
Q&A
- Governor Abbot has supported the Senate’s proposal for property tax cuts. Is there any assurance he will be ok if it’s a sales tax cuts instead?
- This is the plan the house is pushing forward and we hope for his support
- LBB has done dynamic modeling based on homestead exemption, sales and franchise tax cuts and the property tax cuts fall short of economic growth every time
- Why aren’t we spending this additional money on roads and infrastructure to benefit all citizens?
- 35,000 jobs in 2016 is something everyone would feel in the economy – people want increased personal income over paved roads