Key for jobs and continued growth
It doesn’t matter where you look, Texas consistently ranks as one of the best places to live, work and do business. While we can pat ourselves on the back and comment on how lucky we are to have earned these distinctions, the fact is luck had nothing to do with our success; and luck certainly won’t guarantee our future success.
Texas is among the best of the best because of the commitment of Texas leaders and due to the great leadership of Gov. Rick Perry. Our leaders understand that for Texas to be economically sound, the Texas Legislature must invest in the businesses that are the backbone of this great state. Our leaders’ records speak for themselves through the accolades that our state has received and through the voters who continue to elect them.
Whether a business has one employee or a thousand employees, each business and every worker contributes to the success of this state. With a Texas Association of Business membership made up of every size business and representing almost every sector and industry, we know firsthand the struggles of employers of this state. These struggles are the reason we will always champion business issues on behalf of our state’s entrepreneurs and job creators, and why we always will look for solutions that are broad-based and benefit as many employers as possible.
Low taxes attract and keep business in Texas. The franchise tax has been scrutinized and criticized, but in reality it is the best system available. Because Texas is constitutionally barred from basing tax businesses on actual income, it is important that we keep finding ways to provide broad-based relief to Texas businesses.
It is in seeking positive solutions that provide real relief to businesses in Texas that TAB is proud to fully support Gov. Perry’s tax plan. Among numerous tax cuts and other positive relief, Gov. Perry’s recommendations will help every business trying to make payroll, not just businesses in one specific industry.
Included in the governor’s plan is the intent to provide a $1 million deduction to every business grossing $20 million or less. Gov. Perry’s proposal will allow small businesses that barely miss being eligible for the current exemption to finally receive its benefits.
The governor’s office estimates that this exemption will keep close to $1 billion in the hands of small- and medium-sized companies to add more workers and equipment. That’s a win for all Texans.
The governor’s proposal also calls for a 5 percent reduction in franchise taxes for all businesses. For businesses struggling to provide ever-increasing health benefits to their employees, this solution may be just the ticket that employers need to be able to continue to offer health benefits for their employees. 1Reduce franchise tax rate by 5 percent 1Provide a $1 million deduction for businesses that make under $20 million. This would broaden the current exemption, which exempts businesses that gross $1 million or less. 1Lower the rate for EZ Form filers 1Give companies relocating to Texas from out of state a one-time deduction of moving expenses in the first year they pay the margin tax.
Other recommendations that TAB fully supports include lowering the rate for EZ Form filers and giving companies relocating to Texas from out of state a one-time deduction of moving expenses in the first year they pay the franchise tax. These recommendations are simple and straightforward. Deducting moving expenses for companies moving to Texas is just one more reason for companies to choose Texas. The fact is, every company has many choices on where to locate its business. While I would choose Texas any and every day of the year until the day that I die, it is important for Texas to provide incentives to seal the deal.
TAB also firmly agrees with Gov. Perry in his support of money for infrastructure, including water and roads. The investment in tax cuts, water and roads is an investment in Texas. We can achieve these goals while at the same time meeting the needs of Texans in every other area of the budget. Texans will reap benefits from the foresight of this plan well into the future. The only ones complaining about these initiatives are the ones who have always complained and will continue to complain. TAB is more about solutions and results, and we believe that these initiatives will keep Texas moving for decades to come. Hammond is president and CEO of Texas Association of Business.