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Who in their right mind would allow our government to raise their taxes by 243%? Well that is what Texas legislators are proposing right now! What happens in today’s government is that they try and pitch one group against another and that is what is going on right now. If your sales tax was increased by over 200%, or your property tax was increased by 200% the state legislators would never hear the end of it! Right now they are considering raising the cigarette taxes by 243% and it does not seem to bother anyone. The old adage is that it is OK to raise taxes by whatever % on commonly called a “sin taxes”, it will help stop people from buying that product”. Well here is the “kicker” the state also wants to create a new business tax.
In the media (newspaper/websites/blogs/etc.) everyone is being careful not to mention what the tax will be or how much it will cost businesses in the state of Texas, but I can tell you this as a business owner; I struggle now trying to pay all the taxes for my business! If the state increases or creates a new business tax, guess who will be paying for it? That’s right, it will be you. An average business makes as little as 5% markup on products sold to the consumer, some items have a higher mark up than others. I found the following information at http://www.statesman.com/news/content/news/stories/legislature/04/21finance.html and it states in part: “The House Ways and Means Committee approved a new business tax pushed by Gov. Rick Perry to replace the often-avoided corporate franchise tax and to help pay for a property tax cut.” … “The business tax would be based on a company's total revenue, with deductions for either the cost of employees' salaries and benefits or production and manufacturing costs.” … “The tax would affect about 50,000 businesses that have not paid the franchise tax, including many professional service firms”… If they want to get that “Franchise Tax” that they are missing, FIX the law do not create a new tax! Again the ol’ tactic pit one group against another… lower property taxes verses “mean old corporations that are avoiding paying their taxes!
An Example: If the cost of a product is $1 and the business charges $1.05 for it and business taxes go up then you can expect the price of that item to increase too. Lets just say that the tax increase is equivalent to 1% of the cost, you would think that the new price for the item would be around $1.06. That is “simple” math and may not be how it is going to happen; business may take “advantage” of the situation to increase prices by a higher percentage to “help” offset other rising costs (gas costs are a good example of this). So now your $1 product may cost you upwards of $1.10 to $1.20 cents. Now that still doesn’t seem to bad until you start looking at the cost of bigger ticket items, like a car. Even if no “extras” are added on and you just take the example of 1% and add that to a $40,000, that is an additional $400 added to the cost… don’t forget that the state, county, and city sales tax will be added to that (and don’t forget title and license fees)! In Sherman the sales tax is 8% so now the original purchase is 43,200 and using the original example of a 1% increase would now make the purchase price $43,632. These things are never as simple as they seem.
If your “dander” is still not up here is some additional information that you might consider. Still quoting from the same source, “The committee also approved a change in sales-tax reporting for people who buy used cars. Under that change, instead of paying a tax on the sale price, someone who buys a used car would have to pay sales taxes based on at least 80 percent of the "blue book" value of the car.” All of the sudden you cannot make a good deal if you find someone that sells you a car because they need money. Buying a used car for $6,000 that is valued by “Blue Book” at $10,000 is going to cost you a lot more in taxes (again do not forget the Title and License fees). Who is setting this “Blue Book” rate? Is this referring to the most commonly referred to “Kelly Blue Book” or to a state created “blue book”. Who is going to rate the quality of the car being bought? I know when I look up the “value” of my used car ready for trade in I rank it as high as I can and the dealership rates it as low as they can… if you buy a car from family who is going to rate the “condition” that the vehicle is in? What happens when your dealing with vehicles not listed in the “blue book”? Folks it seems that there are too many loopholes in this new set up. Are you tired of paying taxes on top of taxes on top of taxes? This has got to stop somewhere!
The Senate Finance Committee will begin deliberations on the House-passed tax bills on Friday and plans to work through the weekend. The full Senate could debate the bills as early as Tuesday. I urge you to contact your representatives and voice your opinions in your own words. I am against the increase in “sin taxes” of 243% on basic principles; I am against the “new business” tax no matter how seemly small it seems to be. Every year I have to pay a property tax on every item I have in my business, down to the pictures on the wall! I paid taxes when I bought it, I pay taxes on the money I earned to purchase it, and every single year I pay taxes for just owning it…I do not need any new tax to take more money out of my pockets!
No matter what your point of view, please contact your representatives and voice your opinions. Keep the follow link handy, you never know when someone or something will light a fire under kettle like mine has been today. http://www.capitol.state.tx.us/fyi/fyi.htm
Thank you for your time and consideration
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