Texas – A Texas Sales Tax Increase Would Hit Poor People The Hardest

Top Republican leaders have proposed raising the sales tax and using the money to lower local property tax rates. Wealthier Texans and businesses would likely benefit, while poorer Texans would likely pay more.

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Texas’ Republican leadership wants to raise the taxes that consumers pay when they go shopping in order to lower the taxes that homeowners and business owners pay on their properties.

How would that work?

The state sales tax would rise from 6.25% to 7.25%, generating an estimated annual $5 billion in coming years. That would take the total sales tax in most cities to 9.25% because local governments can raise the sales tax an additional 2 percentage points. Supporters say a higher sales tax rate would generate enough revenue to buy down property tax rates by 20 cents per $100 valuation at a time when Texas homeowners and businesses are feeling squeezed by rising bills.

But raising the sales tax would cause poor Texans to pay a higher percentage of their income in taxes while the richest Texans and businesses are most likely to enjoy tax relief under the proposal.

For The Full Story: The Texas Tribune

The Texas tribune
by edgar walters and aliyya swaby
april 17, 2019