FOR IMMEDIATE RELEASE 06/23/2005
Rep. Rodriguez Files Income Tax Plan
~ Rodriguez' Plan Offers More Funding for School Children ~
~ Lower Taxes for Most Texans ~
Austin, TX// State Representative Eddie Rodriguez (Austin) filed the first school finance bill to address the long term needs of Texas' public schools.
HB 33 and HJR 13 completely abolishes the "Robin Hood" property tax (or "Maintenance and Operations tax). While the Governor's plan offers a temporary reduction (from $1.50 to $1.20 per $100 dollars in valuation), Rodriguez' plan drops the rate to zero. It is the only plan which abolishes the M & O. It also prohibits reinstatement of the tax under the Texas Constitution.
It's the only plan that offers a permanent tax cut for homeowners without raising taxes on renters, who receive no direct benefit from property tax cuts. Other plans being proposed are funded with increased sales taxes that hit poor and middle-income Texans the hardest.
Rodriguez' plan includes full Health Insurance benefits for all public school employees. In addition, it provides roughly $3.5 Billion annually in new money for schools. Funding for all of this is based on a State Personal Income tax, which must be approved by voters.
"The rate of the tax is low," said Rodriguez. "It begins at 1% on the first $25,000.00. So the total tax on a family of four, with yearly income of $100,000.00, is less than two percent."
Rodriguez plan also gives Texas voters direct control over the rate of the income tax, with the right to reject "loopholes" that the Legislature might try to create in the future.
The vast majority of Texas taxpayers will benefit from a lower tax bill that is predictable, fair and based on each taxpayer's ability to pay, unlike property taxes, which rise as the local appraiser sees fit.
"Governor Perry's plan offers a short term property tax solution. It is small and fleeting," Rodriguez said. "That reduction in property taxes will disappear in as little as five years, or the first time you move into a new home. It's a Band-Aid on a gaping wound. The Governorís tiny cut in property taxes is offset by a permanent increase in sales taxes."
The same can be said of the other plans offered by the leadership, both House and Senate, during the last Regular Session. Both plans offered property tax cuts that would have been lost to rising appraisals within four to six years. These property taxes will continue to rise, even above the levels seen today; meanwhile, the poor will be burdened worse than ever.
"Texas' faulty tax system throws the State Legislature into a budget crisis at least once every decade. Dependence on Sales taxes and Property taxes, without a balance of revenue from personal incomes, will always result in an unstable base of revenue, " said Rodriguez. "As long as they keep going to the same well, we will be right back where we are now."