AUSTIN (WBAP/KLIF) – The three top political leaders in Texas are proposing a state sales tax increase of one percentage point in order to lower property taxes.
The plan for a one-penny sales tax increase, announced Wednesday, would raise the statewide rate from 6.25% to 7.25%. Local government add-ons make the average sales tax rate across Texas about 8.25%.
Governor Greg Abbott, Lt. Governor Dan Patrick, and Secretary of State Dennis Bonnen all said Wednesday that they support the proposal, if lawmakers pass legislation that would limit future local property tax increases.
“There’s no free lunch out there,” said SMU Economist Bud Weinstein. “If you want to keep the revenue neutral then when you increase one tax you are going to have to decrease another tax.”
Texas does not have a state income tax.
Governor Abbott, Lieutenant Governor Patrick, and Speaker of the House Bonnen released the following joint statement:
“Texans are fed up with skyrocketing property taxes. At the beginning of the legislative session, the Governor, Lt. Governor and Speaker laid out an agenda for property tax relief through the passage of Senate Bill 2 and House Bill 2 to limit property tax growth. In addition to that effort, today we are introducing a sales tax proposal to buy down property tax rates for all Texas homeowners and businesses, once Senate Bill 2 or House Bill 2 is agreed to and passed by both Chambers. If the one-cent increase in the sales tax passes, it will result in billions of dollars in revenue to help drive down property taxes in the short and long term.”
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