Texas legislature passes tax cuts for businesses

[WestVirginiaRebel]

Reuters:

May 27 (Reuters) - Texas lawmakers sent Governor Rick Perry more than $1 billion in proposed business tax cuts shortly before the end of the biennial legislative session on Monday.

The tax-cut package - the final piece of which was approved by the House and Senate late on Sunday - includes an extension of a business franchise tax exemption for small businesses and a rate cut for businesses of all sizes.

The Republican-majority legislature also approved about $300 million in electricity rebates.

Perry, a Republican, had called on lawmakers to pass tax relief for businesses. Thirty-five states are taking up tax reform in their current legislative sessions, according to a recent survey by the National Conference of State Legislatures.

Texas' franchise tax legislation removes inequities and lowers the tax rate for more than 800,000 businesses, according to Lieutenant Governor David Dewhurst, a Republican.

Passing the proposal "sends a clear message that we are committed to sustaining the country's best climate for job creation and economic growth here in Texas," Dewhurst said.

Dick Lavine, a senior fiscal analyst at the Center for Public Policy Priorities, criticized the tax cuts, in particular a sales tax exemption for businesses buying equipment for research and development.

"As always, it didn't matter what the question was. The answer was, 'Let's cut taxes,'" said Lavine, whose organization advocates for low-income Texans. "It's well known that the best return on investment comes from pre-kindergarten through higher education. Who's going to be doing the research and development if we don't train our students?"

The biennial legislative session that began in January had a decidedly different tone than two years ago, when lawmakers faced a budget crunch and slashed spending.

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