FOR IMMEDIATE RELEASE 06/13/2013
Representative Ed Thompson Calls for Additional Tax Relief
Requests that Governor Add Tax Relief to the Special Session
Austin, TEXAS - In a letter to Governor Rick Perry, Representative Ed Thompson joined 29 of his colleagues in asking the Governor to add significant franchise tax rate relief to the call of the ongoing special session of the Texas Legislature. The letter, coordinated by the Texas Conservative Coalition (TCC), the conservative caucus of the Texas Legislature, cites dynamic economic and fiscal modeling in calling for a 50 percent reduction in the rates of the franchise tax, which is levied on Texas businesses.
“During the 83rd Legislative Session, we passed $1 billion in tax relief. However, we can and should do more so businesses can invest, create jobs, and grow the Texas economy to even greater heights. This issue is especially relevant in light of Texas’ revenues and our strong fiscal and economic standing,” Rep. Thompson said.
For context, the tax relief passed by the Legislature in the regular session amounts to approximately 1.27 percent of General Revenue, or 0.6 percent of the entire budget. The revenue surplus at the start of the 83rd Legislature totaled approximately $8.8 billion.
Rep. Thompson added, “A 50 percent franchise tax rate reduction is needed to counteract looming federal tax increases, reduce our state’s unemployment even further below the national average, and widen our economic competitiveness gap between Texas and other states.”
In a study for the Texas Conservative Coalition Research Institute (TCCRI), the Beacon Hill Institute at Suffolk University (BHI) estimated that, by 2017, a 50 percent rate reduction would lead to 16,200 new jobs, $1.9 billion in new investment, and $4 billion in real disposable income. According to the BHI/TCCRI data, reducing franchise tax rates by half would lead to a dynamic revenue loss to the state of only $1.3 billion in 2013, and falling to just $940 million by 2017 as revenue growth from the state’s other taxes begins to take up the slack.
Contact: Emily Kirchner