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.