Tags: Texas | taxes | economy | cut | excess | funds

Expecting 'Excess Funds,' Texas Looking to Cut Taxes

By Drew MacKenzie   |   Monday, 23 Jun 2014 09:36 AM

Republican lawmakers in Texas are pushing for tax cuts as the Lone Star State is expected to have a cash surplus by the end of the year, the Dallas Morning News reports.

State Sen. Dan Patrick, the GOP nominee for lieutenant governor, has called for reductions in both property and business taxes. Attorney General Greg Abbott, the Republican nominee for governor, is pushing for a break from what he calls a "very unfair" state franchise tax.

The Texas Public Policy Foundation, which has been urging cuts in state spending, wants a two-year, half-penny reduction in the state's 6.25-cent sales tax, the Morning News reports.

But the newspaper pointed out that even though the Texas economy has been showing increased improvement in recent months, financial experts claim there is not enough money in state funds to slash property taxes while funding the state's roads and reservoirs.

"We've got more than enough money to fix one problem, probably enough money to fix two," said Dale Craymer, who heads the business-backed Texas Taxpayers and Research Association. "But we don't have enough money to fix all."

However, Patrick, who defeated Lt. Gov. David Dewhurst in the GOP runoff last month, said on election night, "The people of Texas have given us a mandate tonight to get property taxes lower."

Patrick's spokesman Logan Spence said the state senator is creating a special panel to help him make decisions on taxes, the Morning News reported.

"The whole tax structure of the state of Texas is on the table," said Spence, noting that the business franchise tax could even be repealed, without explaining where the $10 billion in lost revenue would come from.

Dewhurst recently declared that he plans to draft a bill this fall cutting school property tax rates by up to 25 percent, which experts say would cost the state about $10 billion.

The Texas Public Policy Foundation has called for the $4.2 billion of "excess funds" to be used to cut taxes. The foundation wants to reduce the state sales tax to 5.75 percent for two years, the Morning News reported.

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