The Facts
* Repealing property taxes and replacing the revenue with a reformed sales tax would provide meaningful tax relief, generate wealth, spur job creation, and protect the rights of property owners.
* In the first year after tax reform is implemented, personal income in Texas might increase about $3.7 billion. After a five-year period, personal income may increase by an estimated $22.8 billion to $63 billion—approximately 1.8% to 4.7% higher than under the current tax structure.
* Over a five-year period, the Foundation’s property tax reform proposal would help create between 124,900 and 337,400 net new jobs compared with no tax reform.
Recommendations
* Abolish property taxes and replace them with a reformed state sales tax that includes an adjusted tax rate and base.
* Ideally, the reformed state sales tax would closely resemble the option with an 11% sales tax rate and an adjusted base that includes all services taxed in at least one other state, including the sale of property.