Both Texas Governor Greg Abbott and President Trump say they’re working to lower taxes for working Americans and property owners.
SAN ANTONIO — On Wednesday, President Trump signed into law what the White House is calling the largest tax cuts in American history. And the president doesn’t want to stop there, saying he aims cut even more in an effort to help you bank your benjamins.
The tax cuts President Trump signed into law include no tax on tips, overtime or social security. But he’s also been floating the ideas of no federal taxes for those making under $150,000 per year and no property tax on those age 65 and up. But how feasible are these proposals?
“No taxes if you make less $150,000. That would be a budget buster and then some,” says UTSA Political Science Professor Jon Taylor.
Taylor said the money to support those cuts has to come from somewhere.
“The problem is the tariffs will not generate nearly enough revenue. When we’re talking about taxes and budgets, we’re talking about revenue neutrality,” he added.
According to the Committee for a Responsible Federal Budget, eliminating taxes for those making under $150,000 a year would reduce federal revenue by about $10 trillion through 2035, if applied to income taxes only. But if it is applied to employee-side payroll taxes as well, that would reduce revenue by $15 trillion!
Without that federal money, states like Texas would have to cough up more cash.
When it comes to cutting or eliminating property taxes for some, Texas Governor Greg Abbott has his own proposal too.
“Every single year, you, my constituents, keep saying our property taxes are too high,” Abbott said in a recent campaign event in Fort Worth (Texas Tribune).
“We have to do more to lower them,” Taylor said. “There’s no authority from he can use the bully pulpit to encourage states, and some might not go that route.”
In the 1990s, Texas limited the amount property taxes can rise every year on a primary residence, to 10%, to help homeowners avoid shock from huge tax bills. Governor Abbott wants to lower that limit to a rise of just 3% annually. And not just for the primary home, but also the owners of certain business so they too can better predict their yearly tax bill.
Taylor says the Lone Star state has laws in place to help homeowners pay their property tax bill.
“We kind of do that already in Texas,” he said. “We have the homestead exemption, the senior homestead exemption.”