ALEX K ON THE ISSUES:
OUR TEXAS ECONOMY
Two of the most important issues facing our state are our support of small, independent businesses and property tax reform.
Small, independent businesses are the backbone of our economy and the flavor of our community. The more diverse small businesses we have, the more our economy is efficient, inclusive and innovative. We don’t have to choose between a business regulatory system that picks winners and losers and none at all. It’s time to reform our regulations so that we support the growth of the next entrepreneur here in our Houston Bay Area.
Property taxes continue to be an inefficient and painful way to raise revenues here in Texas. It’s an income tax on your home – every year it gets the raise and then families are taxed. We don’t have to choose between high property taxes and not funding our schools and local governments. It’s time for real tax reform that moves Texas forward.
It’s either crippling business and property taxes or a government that cannot fund our necessary infrastructure.
The Tax Foundation and American Enterprise Institute, among others, have all called our business margin tax, complicated, confusing and frustrating for businesses in Texas. Further, our policies around commercial property taxes too often exempt corporations from their fair share of taxes while our residents can be taxed on parts of their home that flood insurance refuses to cover. Something isn’t right.
We need revenue to help support critical state infrastructure, like our public schools, but there’s no reason we need to raise that revenue in an efficient and frustrating way.
It’s time we reform both our margin tax and our property tax systems here in Texas. The current margin tax limits the growth of entrepreneurs in our state and property tax system is effectively an income tax – as your home appreciates in value, your taxes go up, even if you don’t have the cash them.
It’s time for a new tax model. As your Representative, I will work to evaluate new taxing options like the X-Tax or FAIRTax. Both of these consumption taxes would be substantially more efficient for everyone – big corporations, small businesses, and residents – as well as fairer to Texans as a whole.
One idea is to move the State to a full sales tax. We could eliminate all our property taxes, the margins tax and the gas tax by swapping to a State sales tax from 6.25% to 13.25%. Those in major cities, like Houston, would add the usual 2% for a total of 15.25%.
One of the prime objections to a Sales tax is that it’s unfair to lower-income Texans. We can solve that by providing a tax allowance to covers basic spending. We can provide each adult Texas taxpayer with a $200/month tax allowance and families with up to two children, a $75/month tax allowance for each child.
So a family of four in Texas (two parents, two children) would receive a tax allowance of $550/month. That would relieve them of taxes for their first $43,000 in spending. They would then be taxed at 15.25% on additional spending.
This structure – a consumption tax and a tax allowance – incentivizes savings and work. It treats all households equally and we can know that no matter who you are in Texas, you will pay for our schools, roads, and infrastructure. It also relieves the burden of the margins tax and property taxes on small businesses.
If you have other ideas, please feel free to send them to me at email@example.com. I’ll evaluate them based on these principles:
- Does the tax system promote the formation of new, innovative small businesses?
- Does the tax system support the expansion of business and the hiring of more workers?
- Does the tax system limit the burden of our public goods on those with the least ability to pay?
- Does the tax system focus on liquid assets and transactions, e.g. not property taxes?
- Does the tax system tax consumption and prioritize savings/investments?
It’s either let businesses do what they want or impose crushing regulations that strangle our economy.
As a former employee of Uber, I know how regulations can strangle a business. Often times, lobbyists put them there so that their clients, the big established company, can keep out other players. Other times, those same lobbyists fight against regulations so their clients can cement their advantages.
It’s time for common-sense regulations that promote a competitive marketplace and allow small businesses to grow and prosper here in Texas. I will fight for these changes at the State Legislature:
- Increasing penalties for businesses who delay closing accounts receivable for over 90 days. Too many large businesses today feel like their small business partners are banks – they can draw a 0% loan by refusing to close out an invoice. If the small business complains, they risk being blackballed by the big business. That must stop.
- Limiting the ability of businesses to impose “non-compete” clauses in their employee contracts. Several years ago, Jimmy John’s dropped non-competes from their sandwich employee contracts after much publicity. While they may have changed their ways, many other corporations still force this provision which is hurtful not only to the employee (who should have the right to work wherever they want), but also to the next entrepreneur looking for talent.
- Ensuring that established incumbent industries don’t use their lobbyists to keep new entrants out. That means making sure you purchase alcohol responsibly from the new craft brewery down the street or buy that new Tesla you’ve been craving.
It’s either rising health care premiums or ending coverage of pre-existing conditions.
My grandparents had small, family run business. They had to hustle every day to make sure operations kept going, bills were paid and products were shipped. If they had to manage health insurance benefits, it would have only crippled them even further.
But they also cared about their employees and fellow workers. They knew how important healthcare was not only to our family, but to the community at large. That’s an experience most business owners have.
It’s time we made it easier for our small businesses to purchase health insurance and the fastest way to do that is to expand Medcaid, the Texas Way. Each year, we leave $6.5 billion worth of healthcare funds that we, the taxpayers, have already paid for in DC. If Louisiana, Arkansas, Kentucky and Ohio can expand Medicaid, so can we.
Automatically covering employees who make the minimum wage would relieve thousands of small business owners across the State, many of them here in our Houston Bay Area. Further, by removing so many people out of the uninsured risk pool, premiums for the rest of us can start to decline and healthcare providers can be paid appropriately.
Lastly, the next entrepreneur with an incredible, quality of life improving idea, will know that when they start out on their own, their family will still be covered. The worst thing we could do to our job creators would be to put their families on the line just because they have a good idea that could benefit us all.
Paid for by Friends of Alex Karjeker / Alex Karjeker Campaign (TEC #00081372)
PO Box 57151
Webster, TX 77598