Taxes are devilish in Perry’s Eden

Last week in this space I speculated that Rick Perry’s deceit on illegal immigration pales when compared with a grander ruse. Eclipsing the hypocrisy of his immigration positions, the Perry record on taxes might be worse. This two-facedness will eventually undermine the credibility of his so-called gubernatorial accomplishments. 

My central thesis is that Perry is not necessarily personally culpable in his duplicity on such issues as immigration and taxes. To the contrary, he’s just a proud Texan acting Texan. Lone Star group-think takes boosterism to the limit. Texas wants to be No. 1 in everything. Perry can simultaneously pose as both the toughest and the most compassionate governor when it comes to illegal immigration. He’s leading in both categories. Leading similarly on taxes will be an even tougher straddle.

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Let’s start with the myth that Texas has no taxes. Yes, Texas has no income tax, but that’s just a small part of the picture. It’s as if Texas tax policy was designed by pollsters. Polling consistently shows that the public considers income taxes the least fair of all taxes. Perhaps that’s why Texas shuns them. But what gets overlooked in Perry’s idolatrous exaltation of no income tax is that Texas’s sales tax rate of 6.25 percent is well above the national average. And this state rate doesn’t take into account additional pennies added by localities, often heading north toward the 8.25 percent maximum allowed by state law. Even if sales taxes are considered fairer, there’s no way that charging 8 percent or more is taxpayer-friendly.

But the real Achilles’ heel of Texas is the local property tax. The hidden secret is that property taxes are devilish in Rick Perry’s Eden. Here are the facts. According to the respected Tax Foundation, Texas property taxes are the highest in the nation, No. 1, as a percentage of home value. Texas’s median real estate taxes and property taxes paid as a percentage of median income are 14th- and 12th-highest, respectively.

Travis County, which contains the state capital, has the 65th-highest property taxes of any county in America. Well, you say, that’s just because liberal Austin hippies are running the place. How do you explain, then, that Republican Collin County, a north Dallas suburb, has the 55th-highest taxes, an even more disturbing statistic? Perhaps Perry might explain why rural Concho County, where his home of Paint Rock is located, ranks No. 660 out of 2,922 counties nationwide when it comes to property taxes paid as a percent of median home value for the period 2005-2009. What could be going on there, in the middle of nowhere, that’s so expensive? I pulled one Paint Rock tax bill to see what’s up. In addition to county taxes, there are property taxes due for the local school district, a road district, a hospital district and a water district. It’s the Texas way of papering over the gaps caused by no income tax to pay for things. And there’s little or no accountability. Texas local officials can often raise these taxes without a vote of the people. At the same time, state officials such as Perry just shrug or look the other way while praising local control.

Worse yet, on Perry’s watch the Legislature did more papering-over the mess by passing a radical new franchise or margins tax that was brutal to small business. Many Texans consider it a de facto income tax that violates the state constitution.

The Texas way seems to be relying on poll-tested “fair taxes” and low taxes at the most visible levels while being hands-off as locals fleece the public. At the national level, would Perry’s flavor of federalism favor lower federal taxes while pushing the ugly business of taxing to states and localities? That would just be a Texan being Texan.

David Hill is a pollster who has worked for Republican candidates and causes since 1984.