schmellba99 said:
eric76 said:
Logos Stick said:
Sales tax.
Have you ever tried to figure out how high sales taxes would have to be to replace property taxes?
I did that one day out of curiosity. It worked out to about 150% in my county. Paying 150% sales tax on purchases would pretty much shut down everything in my county. No restaurants. No stores. Not many jobs.
For us, it wouldn't be too bad. It isn't that far for us to go out of state.
The only way to make such a plan work for the whole state would be to set a statewide sales tax and have all sales taxes sent to state and then the state would distribute them based on their own calculations. Large cities would tend to pay more in sales taxes than they got. Rural counties without much in the way of retail businesses would receive more sales tax revenue than what they paid in.
I don't know what sales tax rate would be required for the state to replace all property taxes with sales taxes. Something on the order of 40% wouldn't surprise me.
So enjoy paying a high sales tax on all purchases (probably including groceries), but I'll be going to another state for most of my purchases.
I'm going to say your math is dubious at best.
State average would be around 11.5%-12.5% increase in existing sales tax, which would be in the general ballpark of 25% total sales tax on taxable goods.
If your county would need 150% tax to make up the difference - your taxing appraisal districts are screwing you and everybody else in your county completely blind 6 ways from Sunday.
In my county, there is not much commercial activities. If you want to buy clothes, you go to stores outside of the county. If you want appliances, outside the county. If you want to visit a bookstore, outside of the county. There are many products that are not sold in the county and people have for years gone elsewhere to buy them. I remember as a kid when we did have a couple of clothing stores in the county, many people took their kids to Amarillo to buy clothes for school.
There isn't much economic activity here that requires sales taxes -- we go elsewhere. eliminate property taxes and have counties make up for it themselves and the sales taxes here would go sky high.
And we are hardly unique. That would be common in a great many rural counties across the state.
Also, don't forget that the classification of what goods are taxable is up to the legislature. If necessary, do you really think that groceries would remain untaxed? It might surprise you to know that in some other states, groceries are taxed. According to Kiplinger, these include Alabama, Arkansas, Hawaii, Idaho, Illinois, Mississippi, Missouri, South Dakota, Tennessee, and Utah. Until recently, Kansas and Oklahoma also taxed groceries.
What I did for my calculation was to take the amount of property taxes and sales taxes collected in my county for a recent year at the time. From the sales tax figures, it was easy to calculate the total of taxable sales. From then, I added the property taxes and the sales taxes together and calculated what percent that is of taxable sales to get a tax rate and then added the state's 6.25% back in.
It has been a while, but if I remember correctly, the tax rate was in the 145% to 150% range.
Face it. When you have few taxable sales in a rural county, if you want to replace the property taxes with sales taxes, you had better have a lot of taxable activity to make up the difference. That may be the case in the big cities, but it is hardly the case in small, rural counties.
One other thing, there are a number of very large properties in the Texas Panhandle with ranches that are owned by people who do not live in the same county. Whatever they buy for use on the properties are most likely tax exempt anyway. Some of the large ranches involved in the Smokehouse Creek Fire are like that. Do away with property taxes and make it where each county comes up with their own sales taxes to replace the property taxes and that would mean that those who live in the county would have to pay for services to protect those properties.
