Lower Taxes, Better Texas: The Bold Agenda to Reduce Property Taxes, Protect Taxpayers, and Grow the Economy

July 16, 2021

Vance Ginn, Ph.D.

Vance Ginn, Ph.D., is an accomplished economist finding free-market solutions that let people prosper. He is founder and president of Ginn Economic Consulting where he provides high-quality research and trusted insights on how to affect change at the federal, state, and local levels. Ginn’s experience includes time in public policy, government, and academia. He is chief economist at Pelican Institute for Public Policy and a senior fellow at several think tanks, including at Americans for Tax Reform, Texas Public Policy Foundation (TPPF), and Young Americans for Liberty.

James Quintero

@JamesQuinteroTX

James Quintero is the policy director for the Texas Public Policy Foundation’s Government for the People campaign. Since joining the Foundation in 2008, Quintero has focused extensively on: state & local government spending, taxes, debt, public pension reform, annexation, and local regulations.

E. J. Antoni, Ph.D.

E. J. Antoni, Ph.D., EJ Antoni is a Research Fellow in The Heritage Foundation’s Grover M. Hermann Center for the Federal Budget. He is also a former economist at the Texas Public Policy Foundation whose research focuses on fiscal and monetary policy.

Antoni’s research has been featured with the Daily Caller, Fox Business, the Wall Street Journal, National Review, the Show-Me Institute, the Heartland Institute, the Arizona Chamber Foundation, FreedomWorks, and the Committee to Unleash Prosperity, where he is a visiting fellow. He has taught courses ranging from labor economics to money and banking.

Antoni earned his master’s and doctorate in economics from Northern Illinois University.

The way we levy and raise property taxes is not just unsustainable, it is unethical. Texans are being forced out of their own homes by insatiable local governments looking to squeeze every dime out of taxpayers. Texans literally can’t afford for the Legislature to wait years to address the issue or make small changes to the system. More than 70% of Texans say property taxes are a “major burden for them and their family” and want relief now. It’s time for bold action.

Lower Taxes, Better Texas* is a two-pronged approach that immediately cuts property taxes nearly in half and redesigns our system to protect taxpayers, provide a fairer tax system, and grow our economy. The plan not only gives taxpayers immediate relief, but it also makes structural changes to our system that prevent year-to-year spikes in tax bills, allow for a more equitable and transparent form of taxation, and rein in irresponsible local government officials.

Lower Taxes
The first prong is to cut property taxes nearly in half. The state can do this easily by eliminating school district maintenance and operations (M&O) property taxes and use state surplus funds above the state’s new spending limit to provide state tax cuts.

Better Texas
The second prong is to modify our tax system so Texas can raise what it needs to fully fund priorities, increase transparency and fairness, and improve taxpayer protections that guarantee reckless local governments cannot continue to game the system.
There are two modifications:

■ Broaden the sales tax base of 51.3% to equalize the tax treatment of certain goods and services, such as legal and financial consulting, and lower the total state and local sales tax rate to 8.21%, which includes a 7.13% state rate and a reduced revenue-neutral local rate cap of 1.08% because of the broader base.

■ Impose a total revenue (sales taxes + property taxes + other local revenue) limitation on local governments similar to the state’s new spending limit, which can only be exceeded by voter approval to raise property taxes on existing property, and require local surplus funds to provide local tax cuts.

The Results

■ Texas families will see a dramatic tax burden decrease, especially lower-income earners.

■ More money in Texans’ pockets will improve our economy.

■ Local governments cannot game the system to punish taxpayers and push tax revenue to unsustainable levels every year.

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Vance Ginn, Ph.D.

James Quintero

E. J. Antoni, Ph.D.

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