Who really wants tax relief — and why

Photo by Todd Wiseman

The debate over how the Texas Legislature will cut taxes this session has certainly been a show — a wonkish policy discussion punctuated by populist exhortations from Lt. Gov. Dan Patrick and his allies. These populist war cries can be neatly summarized like this: Texans are clamoring for lower property taxes and were promised this relief in the 2014 campaign, so the Legislature must give the people what they want or risk their wrath come primary season.

Both the voters’ attitudes toward taxes and the coalitional politics playing out within and between the two chambers suggest that the property tax cutters are, at best, selectively following through on their rhetoric. Like most examples of modern populism, their commitment to giving the people what they want only goes so far, and coexists with other political priorities that have narrower, but nonetheless important, constituencies of their own.

Supporters of the Senate leadership’s approach to tax relief have frequently invoked findings from the latest University of Texas/Texas Tribune Poll to frame their preference for property tax reductions. In that poll, we asked Texans about five different types of taxes, finding that they were most dissatisfied with property taxes (55 percent), outpacing the motor fuels tax (at 40 percent, the second least popular) and the House’s proposed route to tax reduction, the sales tax (34 percent).

If the implication is that the Legislature should make tax policy decisions based on what Texans want, what are we to make of the poll’s finding that voters are relatively indifferent to the business margins tax? It’s the one tax that the governor and the leadership of both chambers before the session even started were largely in agreement about cutting, and the only one of the proposed cuts that the governor has said would trigger a veto if not included in the budget.

While the assumption that taxes must be cut has defined budget politics in the Legislature, polling amply illustrates that most of the public doesn’t attach the same priority to tax reduction. In the same UT/TT Poll, only 2 percent of Texans cited taxes as the most important problem facing the state, and only 3 percent of voters (and 5 percent of Republicans) said that lowering business taxes should be the Legislature’s top priority. Even when asked about the subject in the narrower context of tax cut alternatives, a plurality of Texans have no opinion about the Legislature’s primary target (39 percent), and nearly as much of the public is satisfied with the business margins tax (29 percent) as is dissatisfied (32 percent). So much for the public clamoring for tax relief.

There are, of course, policy reasons to discuss at least revamping the business margins tax, just as there are reasons to consider revisiting the state’s reliance on property taxes. But the lack of formed opinions about the business margins tax, and the even division among those who express an opinion, suggests that responding to the popular will is only one of the factors at play in the debate. The consensus among the political class on cutting the business margins tax likely reflects the seemingly universal opposition to the tax among business groups large and small.  

Political conflict emerged when the competing perspectives on just how to cut that tax were quickly folded into the wider political fight between the two chambers and among the factions within. The Senate originally proposed a business margins tax reduction that would have focused on small businesses and an increase in the homestead exemption that would have done nothing for the business community. The House version relied on a larger across-the-board cut to the business margins tax and a reduction in the sales tax, something that both consumers and businesses pay.

Not surprisingly, the House proposal was more popular with the major business groups. And it appears that the House approach to the business tax is prevailing in a compromise that looks all but assured to reduce the magnitude of whatever homestead exemption increase they may deliver. This illustrates the limits of the Legislature’s follow-through on the populist rhetoric — though, of course, we can expect to see such rhetoric reappear come primary season.

The delivery of the business margins tax cut as the sine qua non of any action on taxes suggests that invoking public dissatisfaction with the property tax is more a means to a political end than a fulfillment of the will of the people. Patrick clearly wants to deliver on one of his repeated promises from the 2014 campaign, even if only nominally. He appears close to settling for an even smaller and more ephemeral reduction in property taxes than the Senate’s initial proposal — which itself was widely criticized as likely to have the same short half life as the last dose of tax relief in 2006.

In this sense, both policy concerns and populist pretensions have predictably taken a back seat to the factional politics that have defined much of this session. The emergence of clearly defined House and Senate tax reduction plans virtually guaranteed that interest groups allied with Patrick and perpetually opposed to Speaker Joe Straus would attempt to wield businesses’ support for the House plan as a weapon in their crusade against the speaker and the Republicans who support him (though being careful not to go so far as to completely alienate business support). Their invocation of public support for property tax reduction can thus be understood as yet another means in their perpetual war against Straus, an effort dissected in great detail by Erica Grieder at Texas Monthly.  

So while the last UT/TT Poll found that a little over half of Texans are dissatisfied with the property tax, the constant nodding toward those views is accompanied by a good amount of winking, too — and indifference toward most Texans’ relative lack of concern about the taxes likely to be cut most significantly. This is the essence of populism in politics: The will of the majority is righteously — and purposively — invoked at one moment, only to be ignored in the next moment in service of politics.

Disclosure: The University of Texas at Austin is a corporate sponsor of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.

James Henson

Texas Tribune pollster and director of the Texas Politics Project at the University of Texas at Austin


Joshua Blank

Research director, Texas Politics Project, University of Texas at Austin