On November 5 th , Texas voters will have the chance to decide whether or not they want to prohibit the taxation of individual income. The statewide referendum would require a simple majority of fifty plus one percent in each legislative chamber to get referred. The Texas Legislature placed Proposition 4 on the ballot boxes in one of the closest votes in the last quarter-century (Ballotpedia, 2019). Governor George Abbott championed the amendment, which was consequently authored and sponsored by Republican legislatures. The revision received one hundred votes in the state house and twenty-two votes in the state senate, both numbers barely above the required minority. This tied with three previous propositions for having the narrowest margin of approval since at least the middle of the last century (Ballotpedia, 2019). Sixty-nine percent of legislative Republicans and twenty-nine percent of legislative Democrats voted in favor of the motion while sixty-nine percent of legislative Democrats opposed the amendment.
Texas is one of the seven states in the USA that does not impose a levy on personal income. HJR 38 proposes a constitutional amendment prohibiting the state from imposing or collecting an individual income tax, including an individual’s share of partnership and unincorporated association income (Votesmart, 2019). This would introduce a distinct law banning the collection of income taxes as opposed to before where no explicit prohibition had been expressed. If in the future, there was a need to impose a personal income tax, this proposition would necessitate a two-thirds supermajority in both legislative chambers to be effected (Lucci, 2019). This is in comparison structure that has a simple majority barrier in the legislature before the issue is brought before voters.
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A significant number of Republican legislators are in favor of the motion while the majority of Democratic legislators oppose the amendment. However, in a surprising turn of events, more Democrats than anticipated voted in favor of the amendment, perhaps giving the Republicans the edge they needed (Garret and McGaugh, 2019). Some of these legislators expressed that their alignment was parallel to their constituents who were opposed to income taxes. As it stands, the fact that Texas has been generating income without levying taxes on personal income would make the possibility of introducing income taxes widely unpopular with the constituents (Garret and McGaugh, 2019). Specific terms about who the tax can be imposed on were deleted, raising questions from some of the legislators whether the word ‘persons' could be considered to mean corporations in addition to individuals. The amendment seems to be positive in the state, primarily owed to pre-existing precedence to operate without having to impose the tax.
The passing of this legislation may have future adverse effects. It would, in essence, block a future revenue option that is less regressive than current taxes. The revenue raised from income taxes could be redirected into the community to created profit-generating projects or alleviates any existing budgetary strains. Secondly, the existing constitutional restrictions make it challenging to impose a personal income tax. If this motion passes, the additional prohibitions coupled with the required processes will make it exceedingly challenging to impose taxes in a period where it might be necessary. The ambiguous nature of the jurisdiction in which the law could be applied may also skewer interpretation towards the favor of individual businesses at the expense of others (Texas Legislative Council, 2019). The implications of passing this legislation without modification of terms could have adverse effects in a future where the access to this revenue may make a difference in the constituents' lives.
My vote as a legislator would largely depend on the projection of certain macroeconomic factors in my constituency. Factors such as the standard of living, current, and projected incomes, and the availability of basic human needs would factor largely into my decision to oppose the motion. Given that Texas already generates enough revenue to sustain its operations and is considered to be an extremely business-friendly environment, it is plausible that the proposition of this amendment is widely unpopular (Texas House of Representatives, 2019). However, I would vote against the motion. This is because the change of this clause would have grave future economic implications for the state (Ratcliffe, 2019). Furthermore, this is an unnecessary amendment in Texas where the law already, makes it significantly challenging to impose a personal income tax. Rather than definitively prohibit income taxes, the law should prohibit the imposition below a minimum income base.
My vote in November will be against the proposed amendment. As previously mentioned, the current legislative systems in Texas already favor the constituents in this regard. In previous years, the percentage of income tax has been declining steadily due to several factors such as economic turbulence and diversification into other tax bases (Sjoquist, 2019). The continued decline indicated that states are creating new ways to use their taxes more efficiently while simultaneously finding alternative sources of revenue. This makes the prohibition of personal income taxes unnecessary because as it stands, less tax is being imposed. Furthermore, taxes are a requirement for the efficient operation of various state projects. Without the funding, numerous critical provisions would be depleted, and the lives of the constituents would be adversely affected. Instead, it would be of more benefit to strengthen the existing laws that place a minimum benchmark wage below which personal income tax cannot be effected.
References
Ballotpedia (2019). Texas Proposition 4, Prohibit State Income Tax on Individuals Amendment
(2019). Retrieved from https://ballotpedia.org/Texas_Proposition_4,_Prohibit_State_Income_Tax_on_Individuals_Amendment_(2019)
Garret, R.,T., and McGaughy, L. (2019). Texas' Constitution makes a state income tax nearly
impossible. Now voters could make it even harder. The Dallas Morning News. Retrieved from: https://www.dallasnews.com/news/politics/2019/05/21/texas-constitution-makes-a-state-income-tax-nearly-impossible-now-voters-could-make-it-even-harder/
Lucci, M. (2019). Texas Legislature Approves Constitutional Amendment to Prohibit Individual
Income Taxation. Tax Foundation. Retrieved from: https://taxfoundation.org/texas income-tax-constitutional-amendment/
Ratcliffe, R.,G. (2019). Is a Proposed Ban on a State Income Tax Really a Stealth Move to
Undermine the State’s Business Tax? Texas Monthly. Retrieved from: https://www.texasmonthly.com/politics/is-a-proposed-ban-on-a-state-income-tax-really-a-stealth-move-to-undermine-the-states-business-tax/
Sjoquist, L.,D. (2019) New Normal? The Declining Relative Importance of State Taxes. The
Center for State and Local Finance. Retrieved from: https://cslf.gsu.edu/files/2019/03/cslf1903.pdf
Texas Legislative Council (2019). Analyses of Proposed Constitutional Amendments. Retrieved from:
h ttps://lrl.texas.gov/scanned/Constitutional_Amendments/amendments86_tlc_2019-11-0 5.pdf
Texas House of Representatives (2019). Constitutional amendments proposed for November
2019 ballot. House Research Organization. Retrieved from: https://hro.house.texas.gov/pdf/focus/amend86.pdf
Votesmart (2019). Proposition 4 Texas Ballot Measure - HJR 38. Retrieved from:
https://votesmart.org/elections/ballot-measure/2443/proposition-41
