Off the Kuff Rotating Header Image

tax

The untouchable tax breaks

You know how some Republicans like to say that there’s no such thing as temporary spending, because once something is in the budget it tends to stay there forever? Clearly, the same is true for tax expenditures, more commonly known as tax breaks. This is from a hearing by Ways and Means committee Chair Rep. Rene Oliveira, one of several he has held to examine the sacred cows of the state’s tax code.

Oliveira, a 26-year House veteran, opened the proceedings with updates on the state’s finances. He said they support a recent prediction by the House’s top budget writer, Waxahachie Republican Rep. Jim Pitts, that the deficit for the next two-year cycle will be $18 billion.

To Democrats, scrounging for more revenue is critical to protect education and safety-net programs. They are quick to note that Texas, as it enters the next round of cuts, already trails all 49 other states in state government spending per capita.

Republicans, either gratified or alarmed by the rise of the tea party movement nationally, are thinking a lot about their no-new-taxes pledges, Oliveira said.

Rep. Ken Paxton, R-McKinney, said it’s the wrong time to propose revoking tax exemptions. “Just trying to camouflage it” as a fairness question, as the Democrats prefer, is a non-starter, he said.

“When people are struggling to keep their jobs and make ends meet, I’m not about to raise taxes on them,” Paxton said.

But is closing a loophole the same as raising taxes?

To some people it is. So if there’s some tax expenditure in the code that was intended to be temporary and to be revoked after a set number of years, Rep. Paxton – and you know he’s not alone in this – wants to keep it. If there’s a tax expenditure whose justification is no longer viable or relevant, Rep. Paxton wants to keep it. If there’s a tax expenditure that unfairly favors one business or industry over another, Rep. Paxton wants to keep it. Tax expenditures are forever, no matter what the budget situation is. If your funding has to be cut to pay for someone else’s tax break, that’s just too bad. We cannot look for new answers, only the same answers as before, whether they work or not.