A taxing shell game

The tax shell game in Texas is illustrated in the demand Samsung is making for tax breaks (“Samsung could double Austin investment, depending on incentives, official says“) on their school property taxes.

Politicians often act as if the avoidance of an income tax is the solution to a problem. In reality, our rejection of an income tax shifted the burden to property taxes and lead to high taxes on industrial properties in Texas. That leads companies like Samsung asking for a tax breaks and local authorities wanting to grant those breaks in order to keep jobs. Eventually, those tax breaks shift the burden to other property owners who see their taxes go up.

In the end, we have created a shell game and it’s hard to tell who is winning and losing. The state lures workers to the state with the promise of no income tax. Then we grant their employer a property tax break and local officials then shift the tax burden to the homes and businesses of other residents.

shell game

How fair the system is depends on where you live, who you work for, and many other factors. Of course, to judge the fairness of the system you need to know who is paying what. That’s pretty hard to sort out.

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