How did a state like Texas, which views all taxes with disdain, wind up with a tax like the one it levies on business? This tax is so bad that few other states that adopted one like it kept it for very long. But Texas has had it for almost 10 years.
As I explain in my latest Texas Monthly column, few levies have drawn more scorn than the Texas business tax. People complain that it’s too complicated to calculate and that it punishes businesses that are losing money. Tax experts say it impedes economic growth. And many lawmakers criticize it for generating less revenue than it was supposed to. Even lawmakers who supported it a decade ago now say they regret voting for it.
In fact, the tax is the target of more than two dozen bills in the current legislative session, which call for revising it or eliminating it altogether. What were lawmakers thinking, and what are they going to do to fix it?