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What Are The Pros And Cons Of Texas Income Tax

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There has been a lot of controversy about the Texas state income tax. Or the lack of the tax. Instead of collecting income taxes, Texas relies on high sales and use taxes (Perez, 2023). Texas relies pretty heavily on its sales tax. Texas has one of the highest sales taxes as it is set at 8.25 percent. It is one of the highest because of the lack of income tax. Texas has been known to be friendly to its residents and business owners. Because of this, there has been an influx of immigration and migration of residents. This helps the state of Texas because it also gets money from the property tax which adds funds to a lot of projects. If you have a big enough company that has multiple businesses across the state, you get hit with another tax called …show more content…

Although I listed some amazing advantages and why we don’t need the income tax, there are numerous disadvantages to this system. The system is vulnerable to fluctuation in prices, or better known as inflation. All the taxes and the dependence on natural resources and government funds can lead to an increase in prices. When the economy is in a downward direction, people won’t buy products, which puts a decrease in the sales tax revenue, and natural resources such as oil won't be purchased. People in low income households will not be able to pay their property taxes, as Texas will raise the tax because they need the money. Also, depending on the enormous amount of money we receive from the government, it can lead to budget cuts and changes in the budget. Based on this, the system we have in place has its strengths and weaknesses. The Texas government will continue to find balance to make sure we don’t fall into a state of failure. The obvious winner of the tax system is a person who makes a lot of money because they don’t pay more taxes, just because they make a lot of …show more content…

While the property tax is needed to fund local needs, property owners lose when people start moving into the area, which will probably increase the property taxes. And that faces new housing problems as people can no longer afford to live there. Regressive taxes refer to taxes that take a higher percentage of the income from lower-income individuals and households than from higher-income individuals and households. This means that as the income decreases, the tax burden increases. Regressive taxes have a more significant effect on people with lower incomes as they spend a more significant portion of their income on basic necessities that are often subject to taxation. Some examples are sales tax, taxes on gas, and taxes that make people spend the same amount regardless of income. The debate over regressive taxes as a means of generating revenue is shocking and subjective. However, supporters of regressive taxation contend that it is fair because it applies an equal tax rate to all, no matter how much you make. They also argue that regressive taxes encourage personal accountability and discourage the use of harmful products like tobacco and

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