Clandestino
03-15-2005, 10:55 AM
i don't smoke so how much will a pack of cigarettes go to now? i hope this lowers our property taxes! we will see..
Web Posted: 03/15/2005 01:54 AM CST
Peggy Fikac
Chief, Express-News Austin Bureau
AUSTIN — Texans who shop, snack or smoke and businesses that now escape the franchise tax will pay billions more in state taxes under a bill given preliminary approval Monday by the Texas House.
The bill passed 78-70 and is intended to raise about $5.4 billion annually in state taxes to lower local school property taxes by the same amount.
It requires a second House vote before being forwarded to the Senate, which is expected to pass its own version.
Supporters said their constituents demanded property tax relief.
Rep. Jim Keffer, R-Eastland, Ways and Means chairman and author of the bill, said lawmakers are responding to Texans who see property taxes standing in the way of home ownership and economic development.
"We're answering their plea to lower their property taxes," he said.
Opponents called the bill unfair to those who can least afford to pay more.
"Today, we are asking the poor to do much more, and we're not even educating them with the money they are giving," said Rep. Sylvester Turner, D-Houston. "Something's wrong with this picture."
The vote was largely along party lines, with only one Democrat, Al Edwards of Houston, supporting the bill and nine Republicans voting against it.
Before giving initial approval, the GOP-dominated House considered a slew of amendments and approved some, including one that would give a tax break on diapers in exchange for imposing a tax on elective cosmetic surgery.
That amendment, by Rep. Scott Hochberg, D-Houston, drew some light-hearted debate, including a warning quip by Rep. Lon Burnam, D-Fort Worth: "I think you're on real dangerous ground when you're talking about taxing face-lifts in this crowd."
But like other proposals, it demonstrated lawmakers' struggle to set priorities and balance competing interests.
"I think most people will see vanity surgery as a luxury item and will see diapers as a necessity for those who need to buy diapers," Hochberg said. "The larger philosophical issue here is whether we're going to pass tax relief ... that is only tax relief for people in the highest income brackets."
A Legislative Budget Board analysis cited by critics of House Bill 3 found the proposal would increase the overall tax burden of Texas families earning less than $100,593. A comptroller's analysis cited by backers showed it would increase jobs, investment and personal income overall.
The bill would raise the state sales tax rate from 6.25 percent to 7.25 percent, making it one of the nation's highest, and expand it. It would tack on an extra 3 percent tax for snacks such as chips and candy. It also would raise the cigarette tax by $1.01 a pack.
One of the biggest changes in the bill was addressed first by lawmakers: a revision in its proposed new business tax.
As originally sent to the House by the Ways and Means Committee, the bill would have imposed an employer-paid tax on payroll in place of the current franchise tax, which many businesses don't pay.
The tax was revised to instead allow businesses to pay either 1.15 percent of wages or the current franchise tax, which is based on either net taxable capital or net taxable earned income.
Some voiced concern that potentially subjecting partnerships and sole proprietorships with employees to the franchise tax could violate the constitutional ban on an income tax. Backers said that problem is avoided because the businesses have a choice of which tax to pay.
"This is the 'no business left behind' tax. That means we close all the loopholes in our current franchise tax, and we go from taxing 150,000 businesses to 475,000 businesses," said Rep. Mike Villarreal, D-San Antonio, vice chairman of the House Ways and Means Committee. He voted against the final bill.
His estimate of affected businesses could grow because insurance companies were added under another amendment by Rep. Patrick Rose, D-Dripping Springs.
Insurers originally were excluded from the bill because they pay a higher tax on insurance premium gross receipts than they would under the new tax, Villarreal said. Rose said insurers pass on their current tax to ratepayers, and so they should be subject to the new tax like other companies. He said they couldn't put it into rates under his amendment.
Lawmakers also approved an amendment that would give the Texas Supreme Court exclusive jurisdiction over legal challenges to the measure. Critics said that would mean future school funding lawsuits will bypass district courts; backers said it would be more efficient.
A district court ruled last year that the school funding system must be changed because it amounted to an unconstitutional state property tax.
The House early in the debate rejected an effort to impose an additional 3 percent tax on beer and wine.
Rep. Charlie Geren, R-Fort Worth, said alcohol "is already taxed on three levels," at the manufacturer, distributor and retailer.
"We're going to tax bottled water. We're going to tax Coca-Cola and Pepsi, but yet we're not going to tax beer, wine and ale," said Rep. Charlie Howard, R-Sugar Land, who wanted to swap the alcohol tax for a reduction in the soda tax and elimination of the bottled-water tax. "You know, I have difficulty with that."
Web Posted: 03/15/2005 01:54 AM CST
Peggy Fikac
Chief, Express-News Austin Bureau
AUSTIN — Texans who shop, snack or smoke and businesses that now escape the franchise tax will pay billions more in state taxes under a bill given preliminary approval Monday by the Texas House.
The bill passed 78-70 and is intended to raise about $5.4 billion annually in state taxes to lower local school property taxes by the same amount.
It requires a second House vote before being forwarded to the Senate, which is expected to pass its own version.
Supporters said their constituents demanded property tax relief.
Rep. Jim Keffer, R-Eastland, Ways and Means chairman and author of the bill, said lawmakers are responding to Texans who see property taxes standing in the way of home ownership and economic development.
"We're answering their plea to lower their property taxes," he said.
Opponents called the bill unfair to those who can least afford to pay more.
"Today, we are asking the poor to do much more, and we're not even educating them with the money they are giving," said Rep. Sylvester Turner, D-Houston. "Something's wrong with this picture."
The vote was largely along party lines, with only one Democrat, Al Edwards of Houston, supporting the bill and nine Republicans voting against it.
Before giving initial approval, the GOP-dominated House considered a slew of amendments and approved some, including one that would give a tax break on diapers in exchange for imposing a tax on elective cosmetic surgery.
That amendment, by Rep. Scott Hochberg, D-Houston, drew some light-hearted debate, including a warning quip by Rep. Lon Burnam, D-Fort Worth: "I think you're on real dangerous ground when you're talking about taxing face-lifts in this crowd."
But like other proposals, it demonstrated lawmakers' struggle to set priorities and balance competing interests.
"I think most people will see vanity surgery as a luxury item and will see diapers as a necessity for those who need to buy diapers," Hochberg said. "The larger philosophical issue here is whether we're going to pass tax relief ... that is only tax relief for people in the highest income brackets."
A Legislative Budget Board analysis cited by critics of House Bill 3 found the proposal would increase the overall tax burden of Texas families earning less than $100,593. A comptroller's analysis cited by backers showed it would increase jobs, investment and personal income overall.
The bill would raise the state sales tax rate from 6.25 percent to 7.25 percent, making it one of the nation's highest, and expand it. It would tack on an extra 3 percent tax for snacks such as chips and candy. It also would raise the cigarette tax by $1.01 a pack.
One of the biggest changes in the bill was addressed first by lawmakers: a revision in its proposed new business tax.
As originally sent to the House by the Ways and Means Committee, the bill would have imposed an employer-paid tax on payroll in place of the current franchise tax, which many businesses don't pay.
The tax was revised to instead allow businesses to pay either 1.15 percent of wages or the current franchise tax, which is based on either net taxable capital or net taxable earned income.
Some voiced concern that potentially subjecting partnerships and sole proprietorships with employees to the franchise tax could violate the constitutional ban on an income tax. Backers said that problem is avoided because the businesses have a choice of which tax to pay.
"This is the 'no business left behind' tax. That means we close all the loopholes in our current franchise tax, and we go from taxing 150,000 businesses to 475,000 businesses," said Rep. Mike Villarreal, D-San Antonio, vice chairman of the House Ways and Means Committee. He voted against the final bill.
His estimate of affected businesses could grow because insurance companies were added under another amendment by Rep. Patrick Rose, D-Dripping Springs.
Insurers originally were excluded from the bill because they pay a higher tax on insurance premium gross receipts than they would under the new tax, Villarreal said. Rose said insurers pass on their current tax to ratepayers, and so they should be subject to the new tax like other companies. He said they couldn't put it into rates under his amendment.
Lawmakers also approved an amendment that would give the Texas Supreme Court exclusive jurisdiction over legal challenges to the measure. Critics said that would mean future school funding lawsuits will bypass district courts; backers said it would be more efficient.
A district court ruled last year that the school funding system must be changed because it amounted to an unconstitutional state property tax.
The House early in the debate rejected an effort to impose an additional 3 percent tax on beer and wine.
Rep. Charlie Geren, R-Fort Worth, said alcohol "is already taxed on three levels," at the manufacturer, distributor and retailer.
"We're going to tax bottled water. We're going to tax Coca-Cola and Pepsi, but yet we're not going to tax beer, wine and ale," said Rep. Charlie Howard, R-Sugar Land, who wanted to swap the alcohol tax for a reduction in the soda tax and elimination of the bottled-water tax. "You know, I have difficulty with that."