History and evolution
Fees and Taxation in the State of Texas
History and evolution
has levied fees and taxes since 1800's. In the recent past (since 1989) it has
enjoyed a significant 6.4% average annual growth in total tax collected.
However, the state of Texas has a reputation of low taxes and service.
taxes contribute to nearly half of Texas's revenue as primary taxes generate
$50 billion annually. The comptroller's office in Texas currently collects over
sixty different fees, assessments and taxes. The collection includes sales
taxes gathered on behalf of over 1400 cities, local governments and counties
around the state (Texas taxes).
has made several changes to tax and fee policies over time. The Texas Tax Reform
Commission (TTRC) was formed in 2005 to modernize and reform the tax system
structure in the state. It is a tax donor state which decided to create more
incentive programs than any other U.S state to attract businesses. The revenue
lost through lacking a state income tax is recovered through other state level
taxes like sales tax and property tax. Texas has debated over business
value-added tax (VAT) in the past but has not enacted it (Brown 1)
Current Taxes levied
I) Income taxes
is one among the only seven states that do not tax individual wage income. The
residents simply do not pay personal state income tax. The constitution of the
state (article 8) restrains passage of personal income taxes. However, Texas
collects a gross receipts tax from some businesses in the state as supplemental
tax revenue (Texas Income Tax Rates For 2016).
state of Texas has a state sales tax rate of 6.25%. Use taxes and local sales
levied by special purpose districts, counties, cities and transit accumulate to
2% of the sales tax thus making the cumulative total on purchases as high as
III) Personal and real estate
taxing units like school districts, counties and cities assess and amass
property taxes on all property (those not exempted by federal or state law)
that is tangible and produces income. Personal property that doesn't earn
income to the owner like airplanes, travel trailers, automobiles, and boats are
in most cases exempted from taxation. Total tax rates may vary from one
location to another and differ from yearly.
homestead exemptions are usually available for anyone who owned property on 1st
January. A greater exemption is available for physically challenged taxpayers
and the elderly who are above 65 years of age. Homeowners who want to apply for
residence homestead exemption should file a form (50-114) with their
appropriate taxing jurisdictions between 1st January and 30th April.
IV) Estate and inheritance taxes
does not levy inheritance taxes on its residents. The estate tax is not imposed
on estates of owners who passed away in 2005 or after due to a federal estate
tax credit phase-out in the state.
Policies that can alleviate
taxation in the state of Texas
should stipulate strict regulations on how funds gained by taxation can be used
to execute different functions. Some of these are the development of economic
infrastructure, social engineering, and public works. Law and order enforcement
should be prioritized instead of come expenditures on war.
taxes should also be used to sponsor welfare and public services such as;
Pensions for the elderly, public transportation, healthcare systems,
unemployment benefits, and education
systems. It should also fund public utilities like water, energy and waste
management. Reluctant subsistence producers can also be alleviated to cash
economies through cash taxes.
Texas can as well adopt value added tax and
personal income tax so as to increase its revenue and serve its people more It
would be more important for Texas to find means of having a long term and
reliable source of funding for public utility.