According to Rick Perry's presidential website, as Governor, Perry "cut taxes on small businesses and delivered a historic property tax cut." What Perry's campaign is not saying is that that this property tax cut was linked with the largest tax increase in Texas history.
Rick Perry's "Margins Tax" is more confusing, more punitive, and more unfair than a corporate income tax.
When the Margins Tax was passed in 2006 there was uniform criticism from Democrats, Republicans that the Margins Tax was the "largest tax increase in Texas history." A review compiled by the Austin American-Statesman shows that in 2006 Democratic leaders, Republican groups like the Harris County Republican Executive Committee and the Texas Conservative Review, and the Dallas Mornings News all agreed that the Margins Tax was the largest tax increase in the history of Texas.
Since 2006, it has also become clear that the Margins Tax has failed miserably in every measure of analysis for what a good tax should do.
A conservative-leaning Washington think tank has just published a stinging criticism of Perry's "Margins Tax."
"Far from solving the problems of the previous corporate franchise tax, the margin tax seems to have only aggravated them." Joseph Henchman, Vice President of Legal & State Projects at the Tax Foundation, a conservative leaning, non-profit, nonpartisan tax research group based in Washington, D.C.
According to analysis of the Tax Foundation, almost every aspect of the Margins Tax is a failure.
Margins Tax Failures
- Poorly written increasing compliance costs and business uncertainty
- Bad Math - Resulting in Multi-Billion Dollar Shortfalls
- Unfairness Creates Incentive to Do Business in Non-Taxable Sole Proprietorship Status
- Unfairness Allows Profitable Businesses to Pay Less Than Insolvent Companies
As America examines Rick Perry as a Presidential candidate, the Margins Tax is an example of Perry's tendency to place dogma and politics over sound policy. The result is an unfair, complicated and costly tax that hurts businesses without raising the money needed for our schools. Indeed, the majority of the historic $4 Billion in cuts to Texas education was related to the underperformance of this confusing and unfair tax.
Unfortunately, the Margins Tax is not the only example of Perry putting politics over policy. |
