Sales Tax

[mtj458]

Debra Medina mentioned she'd like to replace the property tax with the sales tax. One potential problem I could see is that people near the Texas border could save a lot of money by going one state over to buy things. Do you guys see this as a problem? I know morally we are opposed to taxes anyway, but practically speaking, they have to balance the budget somehow.

[Brad Zink]

According to Medina, the replacement of the property tax with a consumption tax would result in larger tax revenues for the state. This is due to the fact that the sales tax would be collected at the point of purchase and circulate in the local economy before being sent to the state government.

[Epic]

And sometimes states that spend a lot on education can have situations where a family can get their kids educated there for free... and then move out!

This is why governments are dumb, with government you have to start chaining people in certain places.

[low preference guy]

Debra Medina mentioned she'd like to replace the property tax with the sales tax. One potential problem I could see is that people near the Texas border could save a lot of money by going one state over to buy things. Do you guys see this as a problem? I know morally we are opposed to taxes anyway, but practically speaking, they have to balance the budget somehow.

Does the neighboring states also have a sales tax? If so, what's the rate? As long as transportation costs are greater than the savings due to a lower tax rate, few will go.

[UtahApocalypse]

Debra Medina mentioned she'd like to replace the property tax with the sales tax. One potential problem I could see is that people near the Texas border could save a lot of money by going one state over to buy things. Do you guys see this as a problem? I know morally we are opposed to taxes anyway, but practically speaking, they have to balance the budget somehow.

When you factor in the Tax collected on purchases from tourists, travelers, and business deals done within the state it will make up for that and then some.

[1836er]

If we include initial real estate sales and most retail services under Debra's plan the difference between the future sales tax rates and the current ones would be negligible in the minds of most consumers... providing little incentive to shop out of state even if you lived right on the border.

[Lmata]

On the south border to Mexico we have a lot to gain. Many people come from Mexico to shop at the US stores. They have money and don't care how much the tax is. They come to get things they can't find in Monterrey.

[Koz]

Think of how many people would move to Texas because of the no property taxes.

[MelissaWV]

When you factor in the Tax collected on purchases from tourists, travelers, and business deals done within the state it will make up for that and then some.

This. Some people will go a state over to shop, which will likely mean some stores will not open up near the Texas/other state border. Some other shops will open in the other state near the Texas border, with hopes of luring people over who want the lower sales tax rate.

What you have to realize, though, is that a LOT of people go to Texas and will not be discouraged by a high sales tax rate once they're there. Florida gets away with this, sucking up extra money from tourists, but since it's about a penny on the dollar more than some folks are used to (and still way less than foreigners are used to paying tax on things), people are not going to rally and protest. These are the same people who're willing to pay $5 for a small bottle of water at a theme park, after all. People visiting Houston, Dallas, etc. on business or pleasure will pay the little bit more in sales tax, and companies within the state near the borders will just have to specialize a little more to ensure their wares are not available a few miles away at a lower overall price.

[james1906]

With the exception of El Paso, none of Texas' main metro areas lies along a state line. People will have to determine if a drive for a couple of hours is worth it.

The only place for concern would be online purchases. I already buy big ticket items online to avoid taxes.

[Austrian Econ Disciple]

Debra Medina mentioned she'd like to replace the property tax with the sales tax. One potential problem I could see is that people near the Texas border could save a lot of money by going one state over to buy things. Do you guys see this as a problem? I know morally we are opposed to taxes anyway, but practically speaking, they have to balance the budget somehow.

Balance the Budget by reducing spending. Simple.

[Number19]

...The only place for concern would be online purchases. I already buy big ticket items online to avoid taxes.This is a legitimate question and I would be against any federal regulation allowing the taxation of internet sales. But if you lower the overhead costs of the property tax, this would allow brick and mortar stores to be a bit more competitive. Plus you have shipping and handling costs to factor in. Plus you have the inconvenience of having to wait for the delivery of the item. Factoring everything in, it could still represent a loss of revenue, which may have to just be tolerated to gain the protection of full property ownership.

[Dr.3D]

With the exception of El Paso, none of Texas' main metro areas lies along a state line. People will have to determine if a drive for a couple of hours is worth it.

The only place for concern would be online purchases. I already buy big ticket items online to avoid taxes.

The state I live in already requires me pay sales tax on everything I buy over the internet, via mail order or telephone.

[Number19]

The state I live in already requires me pay sales tax on everything I buy over the internet, via mail order or telephone.Only if the store you are purchasing from also has a physical presence in your home state. There is no legal enforcement in place to compel businesses otherwise. If I'm in error, how does your state enforce compliance?

[james1906]

Only if the store you are purchasing from also has a physical presence in your home state. There is no legal enforcement in place to compel businesses otherwise. If I'm in error, how does your state enforce compliance?

I'm wondering this too. Many states want to collect taxes on online purchases, but I don't know of any that can actually enforce it.

[Andrew-Austin]

According to Medina, the replacement of the property tax with a consumption tax would result in larger tax revenues for the state. This is due to the fact that the sales tax would be collected at the point of purchase and circulate in the local economy before being sent to the state government.

I don't care about bringing in revenue for the state.

I don't own property, but I consume things. Getting rid of the property tax might lower my rent, but I'm not so sure about that.

I was excited to hear that she was for ditching property taxes, but if she simply wants to replace it with a bigger tax on consumption then I don't see what the big deal is.

AED is right, she should be about dramatically slashing spending to compensate for no property taxes.

edit:


First, we would ensure that items such groceries, medicines, basic health care and other basic needs continue to be exempt from the sales tax. It’s the disproportionate percentage of such families’ incomes spent on such items that makes the sales tax regressive, and we would actually work to expand this exemption to make sure that those individuals and families are not disproportionately impacted by reform.

Okay I'm answering my own queries. All I buy is necessities, so if they are not included in her reformed sales tax then I am fine with that.

[TastyWheat]

With the exception of El Paso, none of Texas' main metro areas lies along a state line. People will have to determine if a drive for a couple of hours is worth it.

The only place for concern would be online purchases. I already buy big ticket items online to avoid taxes.
Agreed. The largest areas aren't exactly a hop, skip, and a jump away from the next state. Either way we can always buy more things online.

I don't see this as a really great economic move, but on principle I agree with her. The real question should be whether or not private wealth increases or diminishes as a result. This could actually reduce government spending though, because I'm pretty sure they have to create special commissions to determine the property taxes. Much harder than changing a single rate.

[Kotin]

she stated clearly that under such a plan spending cuts would be the first step.

[torchbearer]

Debra Medina mentioned she'd like to replace the property tax with the sales tax. One potential problem I could see is that people near the Texas border could save a lot of money by going one state over to buy things. Do you guys see this as a problem? I know morally we are opposed to taxes anyway, but practically speaking, they have to balance the budget somehow.

if texans go east, they will be paying a 9% sales tax on everything but medicine.
so, no safe haven for purchase in louisiana.

[mtj458]

Balance the Budget by reducing spending. Simple.

...yes i'm aware. not at all the point of this thread though. I don't know how the Texas government works but I doubt the governor has the power to just stop spending that much money by herself, anyway.

[TastyWheat]

I don't know what percentage but I'm pretty sure Republicans have a majority in both houses. They'll be much more responsive to vetoes than a Democratic legislature would.

[The Eradicator]

The state Senate is 19-12 or 61% Republican. The House is 77-73 or 51% Republican.

A governor can influence the budget a great deal, but they don't write it themselves. It doesn't change the fact that a large part of how it ends up is their responsibility.

[tmosley]

The governor directly appoints numerous positions throughout the state government. Whoever wins definitely sets the tone in Texas. You can almost feel the change in the air when there is a change in governor, though that might just be my imagination. I felt it when Ann Richards left (even as a young boy), and I felt it when Perry took over. Make no mistake, a Medina governorship would set off an avalanche of change in Texas.

[Ron_Paul_Knows]

Debra Medina mentioned she'd like to replace the property tax with the sales tax. One potential problem I could see is that people near the Texas border could save a lot of money by going one state over to buy things. Do you guys see this as a problem? I know morally we are opposed to taxes anyway, but practically speaking, they have to balance the budget somehow.

Someone was making that same argument in a segment that aired on WFAA today:



"It would make Texas businesses totally uncompetitive," he said. "People would be buying on the Internet, people would be driving out of state to buy things. It would really hurt the economy."


http://www.wfaa.com/news/politics/Critics-claim-Medina-tax-plan-hurts-families-83300657.html

The piece is pretty critical of her tax plan. If anyone here would like to defend her tax plan in the comments section plan please do so.

[TruckinMike]

STATE SALES TAX is a good thing.

Why? Because, Its not the end, its just the beginning. The beginning of a new awareness throughout all of TEXAS. Every single person will be faced with a draconian and evil-ly high tax rate. And Yes, thats a good thing.

Even the most die hard collectivist pigs(dems and repugs) will grumble at government waste and cost -- those same people that once wanted to be ruled by the system will now want to fight it.

That concept can only work with a transparent and uniform tax --- NO VAT TAX or combination of taxes will work. If the people can't see it, they won't feel it. --- think... "employee withholding"

TMike

Note: Glenn Beck supports the NON- transparent "Value Added Tax" (VAT). Hhhmm, somethings very corrupt about that man.

[james1906]

STATE SALES TAX is a good thing.

Why? Because, Its not the end, its just the beginning. The beginning of a new awareness throughout all of TEXAS. Every single person will be faced with a draconian and evil-ly high tax rate. And Yes, thats a good thing.

Even the most die hard collectivist pigs(dems and repugs) will grumble at government waste and cost -- those same people that once wanted to be ruled by the system will now want to fight it.

That concept can only work with a transparent and uniform tax --- NO VAT TAX or combination of taxes will work. If the people can't see it, they won't feel it. --- think... "employee withholding"

TMike

Note: Glenn Beck supports the NON- transparent "Value Added Tax" (VAT). Hhhmm, somethings very corrupt about that man.

Exactly. I think no taxes should be taken out anyone's paycheck. Everyone has to write a check to the IRS at the end of the year. Let's see what becomes of that.

Also, landlords should should change rent payments to include a "property tax surcharge."