Tax Cuts or Cost Shifting

One of the most popular promises politicians, like Donald Trump and Lt. Gov. Dan Patrick, make is tax cuts because the so many voters immediately think that they’ll get more in their pay checks. Sometimes they really do get more each month but then find that other costs go up and the end result is roughly the same. One example of this in Texas is state taxes that should fund public education being cut so the state legislature reduces the dollars per student it pays districts which then are forced to increase property taxes to make up the difference.

Since Texas doesn’t have a state income tax, who gets the tax cuts that force you and me to pay higher property taxes? Big companies of course.

You say you don’t own property so you don’t pay property taxes? If you believe that you’re mistaken as part of your rent goes to pay your landlords property taxes and when property taxes go up you can bet increased rent isn’t far behind.

Texas used to have some of the best highways anywhere in the south, that’s no longer true. State highway and road funding has been far from adequate for so long that toll roads are popping up in more places all the time just like the controversial one in Cibolo. If the state adequately funded the Texas Department of Transportation (TxDoT) cities like Cibolo would be unlikely to feel the need for alternate funding sources to build needed roads but as things stand now they don’t feel they can wait 25 years or more in the hope that TxDoT will get around to funding them.

Another result of lower taxes is increases in user fees at both the state and local levels. Examples are: increased park and museum fees,  increased licensing fees, increased business registration fees, increased ticketing, increased fines,  increased parking fees, increased permit costs, increased court fees, and so on. 

Another way you and I pay for reduced corporate taxes is the additional costs we absorb sending our children to school. If you have a child in a public school you’ve found that a significant proportion of items on the school provided list of supplies are things like paper towels that you’d think would be supplied by the school. If your child participates in sports or band or many other extracurricular activities you’ve probably noticed the high fees expected from parents. If you’re a teacher you find yourself spending significant amounts of your own money to provide supplies for you classroom.

Tax cuts like the one Donald Trump signed into law last year often just lead to deficit spending which simply means that future generations will pay for today’s spending. That whole notion is anathema to Republicans when Democrats are in control of government and want to build things but seems to be just the thing to do when they can line their supporters’ pockets.

Every example above illustrates the concept of cost shifting, which is making someone else pay for what beneficiaries are getting; most of the time that someone else is you and me.

Published in the Seguin Gazette - February 1, 2019