Proposition 1 (R) question (Howe: low income, sales, apartment)

[kreeyax]

Proposition 1 on the Republican ballot reads:

Texas should replace the property tax system with an alternative other than an income tax and require voter approval to increase the overall tax burden.

My question is - what does this mean? Does it abolish property taxes all together and replace them with nothing immediately until they can figure out what to replace them with? Why doesn't it propose what to replace property taxes with? "Alternative" doesn't seem specific enough. Almost like saying, "we don't want property taxes, we're just not sure what we want". Really confused on how to vote on this.

[TheOverdog]

It means they want to move to a consumption tax type model (ie additional higher rates of sales tax on products purchased), because consumption taxes hit lower income earners harder and property tax hits upper income earners harder.

[War Beagle]

Vote no. Never give politicians a blank check.

[ChristieP]

Consumption tax hits everyone equally. The more you earn, the more you spend, and the more tax you pay, and the inverse applies to lower wage earners.

[Trainwreck20]

Originally Posted by ChristieP

Consumption tax hits everyone equally. The more you earn, the more you spend, and the more tax you pay, and the inverse applies to lower wage earners.

Not true at all...higher earners spend a much smaller percentage of their income on items subject to a consumption tax - investments, retirement, savings, or other out-of-state (or otherwise shielded) ventures would likely be exempt. Low income earners tend to spend almost all of their income on items that would likely be subject to consumption tax (utilities, clothing, food(?), rent).

Of course, it all comes down to those exemptions and whether it is a flat consumption tax or tiered (i.e. higher for luxury items or exemptions for food items). My guess is it would not work out in favor of the lower-income.

Note that this is not any kind of binding vote, just a 'poll', essentially, targeting republican voters.

Most very wealthy people live in expensive residences, and there are almost no tax-avoidance mechanisms for property taxes currently. It must bug the crap out of them that they have to pay those and would really love to see that change.

[kidicarus89]

Originally Posted by Trainwreck20

Not true at all...higher earners spend a much smaller percentage of their income on items subject to a consumption tax - investments, retirement, savings, or other out-of-state (or otherwise shielded) ventures would likely be exempt. Low income earners tend to spend almost all of their income on items that would likely be subject to consumption tax (utilities, clothing, food(?), rent).

Of course, it all comes down to those exemptions and whether it is a flat consumption tax or tiered (i.e. higher for luxury items or exemptions for food items). My guess is it would not work out in favor of the lower-income.

Note that this is not any kind of binding vote, just a 'poll', essentially, targeting republican voters.

Most very wealthy people live in expensive residences, and there are almost no tax-avoidance mechanisms for property taxes currently. It must bug the crap out of them that they have to pay those and would really love to see that change.

Bingo.

[ChristieP]

You seem to think that wealthy people don't spend money... That's totally not true. They spend a LOT more on luxury items, such as restaurant meals, designer clothing, vacations, automobiles, technology, etc. You might be shocked to know that many "wealthy" people live paycheck to paycheck just like the lower income folks do. They just spend their money on different things.

Food (non-hot/grocery) has NEVER been subject to sales tax, and I doubt any lawmakers would dare try to tax it since that would hit the poor very hard. We already pay city/state taxes on utilities so that's a wash, and the amount of property tax we pay now would probably even out with a consumption tax on all of the other items.

[Mark Senior]

I think I would vote no. I now rent. The owners of the apartment would pay no property tax but not lower my rent. However, I would pay more for things I consume. I can't see, at this point, until I hear further discussion, as to how I would "win".

[TheOverdog]

Food (non-hot/grocery) has NEVER been subject to sales tax, and I doubt any lawmakers would dare try to tax it since that would hit the poor very hard.

In most VAT/consumption tax schemes, food is taxed. If you are explicitly removing property tax and income tax, then it's your goal to hit the poor for taxes harder than the wealthy. It's blatant and obvious.

And wealthy people pay less consumption tax because more wealthy income is hidden in 401k, IRAs, education/HSA and many other very common tax avoidance vehicles.

[HappyTexan]

Who pays sales tax on rent ?