Liberty Report: Corporate Tax Breaks Are Bad for Texans

The Lone Star State is great because of its people, not because it is willing to give more sweetheart deals to big out-of-state corporations.

Corporation tax income form. | Image by danielfela

Late Sunday night, the Texas Legislature approved a new plan for corporate tax breaks. Or rather, they took Chapter 313, proposed legislation that grants companies discounts on school property taxes, and decided it needed to be even more expansive. More industries need more tax breaks. And who are we to allow big business to suffer?

Now, summer is nearly here, so I am tempted to ascribe this mania for corporate welfare as a result of too much time in the sun. My friends in Austin may not have been hydrating. Perhaps they were dizzy and their rational faculties were scrambled. I’m looking hard here for medical reasons our legislature decided to revive corporate abatements at the expense of individual taxpayers. That our representatives believe nearly $100 billion should be shouldered by the average Texan instead of Big Industry is otherwise too ridiculous to believe.

But here we are.

Texas will soon make the fateful decision that giving tax breaks to politically connected businesses, while simultaneously raising everyone else’s property taxes, is both sound economics and morally justified. But let’s be clear. If this goes through, the Texas legislature will have done something remarkable, indeed: it will have legalized theft.

We are all getting robbed here, but in particular renters and homeowners will feel the penury. Homeowners, the wonderful backbone of any state, are promised time and again property tax breaks. But the property tax levy increased by more than 12% in 2022. Austin received a cool $8.9 billion, which I’m sure was spent judiciously. How abatements for wind and solar farms will help this sorry situation has yet to be comprehensively explained.

These tax plans also hurt existing Texas businesses, putting them at a competitive disadvantage. Tax breaks should be applied equally. Picking winners and losers is bad government policy, and gives out-of-state businesses an advantage over our own people.

Of course, the legion of lobbyists and lawyers, both from out of town and homegrown, have slick PowerPoint slides to explain it all away. And if the fuzzy math does not add up, they have other modes of persuasion that seem to work well with politicians. But it does not work with average Texans who are both more intelligent and honest than this army of Brooks Brothers suits.

So the challenge I want to issue to my fellow citizens is simple: make as much noise as possible—now, during this small window—and force Gov. Abbott to refuse the renewal of school district property tax abatements. Do not allow the failed Chapter 313 to come back as a newer, more destructive Frankenstein. Reject it, and reject the special interests. Demand, on the other hand, Austin put the budget surplus (an astounding $62 billion!) toward meaningful property tax relief. This is your money, after all.

The economic prosperity of this great state is often touted as a result of our business-friendly environment. That’s true enough, as far as platitudes go. But it’s not accurate. Texas is successful because of Texans. Our people. We work hard and raise families in this state. We put down roots, quite literally. Our homes, our land, all this is why we invest our time and blood into making the state better.

But chip away at this foundation, make owning a home financially impossible, and the republic that was founded in 1836 will cease to exist in any meaningful sense. People will leave. Tearfully.

The outside corporations Austin bends over backwards to attract will, surprise-surprise, and also leave. They have no tie to the land; their roots are an inch deep. They will go, like so many industrious cockroaches, in search of abatements in other lands. Thanks for the goodtime, Texas. Catch you never.

This special tax break for Big Corp shouldn’t be necessary if the property tax were lower or nonexistent. Texas government should put the property tax on a path to zero in ten years. This is possible by lowering state spending and using the surplus revenue to buy down the property tax.

What I described above will happen, if not in your lifetime, during the lives of your children. Because it always happens like this. What does not, however, have to happen is Gov. Abbott’s signature sealing our fate. Let him hear your voice loud and clear. Whether or not he does the right thing is then up to him.

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