Tuesday, March 08, 2005

The tax bill, HB 3, gets voted to the House floor

Last night in the Ways & Means committee, members considered a payroll tax increase, a snacks tax (read: obesity tax, the first of its kind in the entire country), sales tax increase, motor vehicle sales tax increase, and cigarette tax. All of which were approved when HB 3 was passed out of committee last night, with one approving vote coming from Democrat Mike Villarreal, Vice Chairman of the committee. The final vote was 6-2.

  • The payroll tax would increase from 1.1 percent to 1.15 percent (well, except for insurance companies).

  • The snack tax would be a 3 percent addition to the sales tax on all snacks, which include cookies, candy, chips and soft drinks not consumed in restaurants.

  • The sales tax increase from 6.25 percent to 7.25 percent, instead of the original proposal of 7.2 percent.

  • The motor vehicle sales tax increase from 6.25% to 7.35%.

  • The gasoline tax increase of 20 cents.

  • The cigarette tax increase by $1. A PR guy for Phillip Morris said it best in the Houston Chronicle today:

    If the Texas Legislature approves a proposed $1-per-pack increase in the state excise tax on cigarettes, the average price of a carton of cigarettes would increase to $48.74. This would make the average cost of a carton of cigarettes in Texas $8 to $13 higher than bordering states. In addition, the price of a carton of cigarettes would be $35 higher than could be purchased in Mexico.


    At the end of HB 2, there's one little stipulation: that it won't pass unless HB 3 is passed. This doesn't make sense since HB 3 is being dubbed "revenue-neutral;" Tom Craddick says it the best: "We're not going to do a tax bill to fund schools," Dallas Morning News. Wait, what? So these tax increases aren't going to provide money to schools - they're only supposed to offset property tax reductions?



    To save myself from a lengthy post, just read Carlos Guerra's commentary in the San Antonio Express-News today since I agree with most of what he says.

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