Immoral is a very judgmental word, often used to describe the behavior of people who display little regard for societal norms of fairness or decency. It also is used to describe unsavory business practices that prey on the poor or extreme political decisions, such as terrorist acts or military invasions that impose death and physical, financial and emotional suffering on large numbers of innocent people.
The word, however, is normally not used to describe a tax, at least not since the Boston Tea Party. Many other words – sometimes foul and often in anger – are uttered every day against taxes, but one witness – economist Vance Ginn -- called the property tax “fundamentally immoral” in a recent hearing before the state Senate’s Finance Committee.
Ginn is the former chief economist at the right-wing Texas Public Policy Foundation. His and TPPF’s ultimate goal is to eliminate the property tax, a goal they are not likely to reach. But they will continue trying to chip away at it, endangering a critical funding source for local governments, especially school districts.
There is nothing immoral per se about property taxes or any other tax because the revenue they raise helps pay for the facilities and services the public needs – schools; highways; clean water and sanitation facilities; police and fire protection; and national defense, to name a few. But there are serious problems with how the tax load is distributed in Texas, where the wealthier you are, the better the tax deal you get, while the poorest Texans pay the biggest share of their income in taxes. This is called a regressive tax system, and it is immoral.
In a recent study of tax systems in all 50 states, the non-profit, non-partisan Institute on Taxation and Economic Policy (ITEP) concluded that Texas – with its heavy dependence on property and sales taxes and absence of a state income tax – has the seventh most regressive tax system in the country.
The study determined that Texas households in the lowest 20 percent of income – those with incomes less than $21,700 per year – pay almost three times (12.8 percent) the proportion of their income in sales, property and other Texas taxes than households in the top 1 percent of income – people with incomes of more than $744,800 a year – who pay only 4.6 percent in state and local taxes.
Households in the middle 60 percent of income ($21,700 to $134,200) pay an average of 9.5 percent.
Many of the lowest income earners in Texas are immigrants (they don’t get a free ride on taxes), and many are renters who help their landlords pay their property taxes but don’t benefit from the homestead exemption tax breaks their landlords receive. And the lowest-paid Texans don’t get the business tax breaks that some of the wealthiest Texans get for their companies.
After analyzing the ITEP report, Dick Lavine, senior fiscal analyst for Every Texan, noted that the state comptroller also produces a study of tax incidence, showing by business sector and family income who pays Texas taxes and who doesn’t. He said the two studies differ in some specifics but reach the same conclusion: “Texas public services are supported by an unfair tax system that takes the most from those who can afford it the least.”
I repeat. That is what’s immoral about Texas taxes.