The next post first appeared on FactCheck.org.
Former Texas Gov. Rick Perry mentioned he “never raised taxes in his 14 years as governor of the state. That’s not the case. During his tenure, he elevated taxes on companies, cigarettes, fireworks, diesel tools and insurance coverage.
It’s true that Perry didn’t raise broad-based mostly taxes corresponding to an individual income tax the state doesn’t have one or the state retail gross sales tax whereas governor. Texas tax burden for state and local individual taxes ranks 47th within the nation, based on the Tax Foundation’s fiscal 2011 numbers, the latest available. (Tax burden is the overall quantity of taxes paid by state residents divided by whole income.)
But “never raised taxes That’s a tricky boast to back-up, and, in truth, Perry can’t accurately declare it.
A spokesman for Perry says that he “never increased taxes, on net. However that’s not what the governor said, and that qualifier would solely negate a number of the tax increases that were packaged with tax cuts under Perry’s tenure.
Perry, a Republican presidential candidate in 2012 and a possible one for 2016, made the tax declare in New Hampshire, at a politics and eggs breakfast event at St. Anselm Faculty in Manchester on March 12 (see the forty:57 mark).
Perry, March 12: Below my management, we had 14 years of balanced budgets. Never skipped a debt cost, by no means raised taxes. In fact, I signed the largest tax cut in Texas history.
We’ll observe that the state Constitution requires a balanced price range and prohibits the Legislature from appropriating extra money than the state is expected to have in income.
The “largest tax cut in state historical past that Perry mentions was really a 2006 package deal of faculty property tax cuts paired with increases in enterprise franchise, tobacco and used-automobile sales taxes. Even on net, the Texas Taxpayers and Research Association, a nonprofit group supported primarily by businesses and commerce teams, says the tax package deal, which it estimated at a internet $2.5 billion per yr, was the biggest reduce in Texas history. Dale Craymer, president of the group, instructed us that was primarily based on sheer dollars, not inflation-adjusted quantities. However the massive tax cuts in state historical past, he stated, made for a brief list. Another a 1997 property tax reduce beneath then-Gov. George W. Bush amounted to $1.04 billion, in accordance with a January 2015 report by the Texas Comptroller of Public Accounts. That complete isn’t near the 2006 package estimate after adjusting for inflation.
And, because it turned out, the change in business franchise taxes didn’t usher in as much revenue as had been expected. The measure was supposed to lift about $6 billion a yr, but introduced in $four.5 billion in 2008, a 41.6 percent improve from the quantity raised by the franchise tax in 2007, says the Comptroller’s Office report, which supplies an in depth account of state taxes and fees from 1972 by 2014.
The 2006 bundle of bills was designed to restructure school financing, which is attained by way of local 30,000 cubic cans property taxes. Perry has argued in the past (see the 33:00 minute mark of this 2010 interview with the Texas Tribune) that the revamped franchise tax doesn’t rely as an increase, for the reason that sum of the assorted tax measures was a web decrease. Some will agree with that evaluation. For example, the group Americans for Tax Reform, which asks political candidates to sign a pledge to not elevate taxes, doesn’t count an increase paired with larger cuts, or even revenue-impartial cuts, as a violation of the pledge.
But the tax bundle wasn’t a web tax decrease for all affected parties some paid more, some paid less. The modifications to the enterprise franchise tax have been controversial. The Tax Foundation stated in a 2011 report that the revamped tax had caused “significant confusion and “should not be used as a model tax reform for another state. In its 2012 scorecard on governors fiscal policies, the libertarian Cato Institute stated Perry’s “record on taxes is combined, citing the 2006 franchise tax adjustments and tax and charge will increase in 2003. The governor received a grade of “C from the group that 12 months, however the most recent report card from 2014 offers Perry a “B, and notes adjustments made to that enterprise tax and different tax cuts.
The revamped franchise tax expanded the businesses that were topic to it, and adjusted the way in which the tax was calculated, from one based on capital and earned surplus, to 1 primarily based on “margin, which is total revenue minus cost of goods bought or total compensation, whichever is larger. That’s why it’s referred to as the “margin tax. The Texas Taxpayers and Analysis Association discovered that businesses with beneath $1 million in income (which later turned exempt from the tax) saw their taxes drop by 46 percent from 2007 to 2009, in keeping with the group’s October 2011 report. And those with revenue between $1 million and $10 million saw a seventy two percent increase.
General, for all companies, the impact was a forty six p.c soar in tax owed. TTARA said the tax triggered “substantial differences in tax liability throughout, and in some cases, even inside, industry groups. /p>
In that 2006 package deal, the cigarette tax was raised by $1 per pack and the tax rate on other tobacco products, besides cigars, was raised by practically 5 percentage points to forty percent. Taxes paid on private used-automobile sales had been also elevated to bring in $30.6 million in 2007 and $eighty five.1 million in 2008-2009, in line with the Comptroller’s Workplace report. Consumers now need to pay sales tax on the “presumptive value of the automotive, not what they mentioned they had paid for it.
Beyond the 2006 tax package, nonetheless, there were different tax increases beneath Perry. All figures come from the January Comptroller’s Office report:
– In 2001, a tax on the sale of fireworks was enacted, estimated to generate $848,000 in 2002 and 2003. Also, that yr the Texas Emissions Discount Plan Fund was created, and the legislation included a sales tax on diesel construction tools and a tax surcharge on certain diesel vehicles as part of the funding mechanisms. The overall internet achieve of the law was expected to be $231.Eight million for the following two years.
– In 2003, one other law elevated the income measures for the emissions discount fund, with an estimated internet acquire of $230 million for 2004-05. Another piece of legislation expanded taxation on premiums and insurance coverage to Medicaid and CHIP insurance coverage, elevating an estimated $fifty one.1 million.
– In 2009, a new legislation limited using a $10 reward tax for automotive transfers, elevating an estimated $26 million for 2010-eleven.
There were additionally some charge will increase under Perry, together with the 2001 reinstatement of a petroleum products delivery payment, a new admissions fee for strip clubs in 2007, an increase in assessments on property and casualty insurance coverage to fund a Volunteer Hearth Department Help Fund, and will increase and surcharges on motor vehicle charges as part of the 2001 and 2003 emissions reduction measures.
When we requested Travis Considine, a spokesman for Perry, in regards to the tax increases past the 2006 tax package, he advised us that Perry had cut taxes greater than seventy five times and despatched us a spreadsheet of those cuts and their savings over five-12 months intervals.
We’re not saying that Perry didn’t reduce taxes or that he raised taxes significantly while governor. The comptroller’s report notes that when dealing with a income shortfall in 2003, the Legislature didn’t enact major tax increases, as an alternative “focusing on spending reductions and relatively obscure charge/assessment hikes. (The report later notes that “there is no one universally agreed upon distinction between taxes and fees, and many individuals will not be in a position to inform the distinction when paying a authorities levy.
However Perry’s declare was that he “never raised taxes, a definitive assertion that goes too far. By no means say by no means.