Lower taxes work for Texas, why are lawmakers trying to create new ones?
Despite the histrionics of high-tax enthusiasts, new tax cuts are producing incredible revenue for state tax coffers. Texas alone has seen a 15 percent tax revenue increase this year. And Texas Comptroller Hegar expects an 8 percent growth in the state’s tax collections over the next two years — an extra $9 billion more to the state.
Texas alone has seen a 15 percent tax revenue increase this year.
The basis for this growth? As conservative principles state, lower taxes produce more growth. With more growth comes more sales and income, and that means more taxes collected.
So with all this growth from lower taxes, it’s especially surprising to hear Texan conservatives calling for a new tax on Texas businesses and citizens.
Driven by the big hotel chains, the Senate is considering a new tax on the services provided by travel agents (HB 3579).
Today when you book with your local travel agent or through an online site like Expedia.com or Booking.com, you pay a service fee. These service fees are how travel agents get paid for researching and comparing available hotel options, booking your room, and handling payment to the hotel.
Big hotels prefer you book on their sites and hate when travel agents show you boutique hotels at lower prices than big hotels’ rates.
Fortunately, Texas does not now impose sales tax or lodging tax on these service fees — which means your travel costs are lower. But in tossing aside conservative principles of lower taxes, we are seeing several Republicans advocate a new tax on these travel agent services.
Big hotels love HB 3579 since this new tax doesn’t apply to them and raises prices for travelers who dare to book their rooms through travel agents and websites instead of directly with the hotel. Big hotels prefer you book on their sites and hate the competition travel agents fuel in the travel industry — competition that gives you lower prices when you travel.
HB 3579’s new tax makes it harder for travel agents to compete with the multi-billion dollar big hotel industry. And once travel agents are out of the way, big hotels can further jack-up their prices.
HB 3579 also opens the door for new taxes on other services.
Of course big hotels get the additional benefits of HB 3579 as its tax revenue is earmarked to promote the Texas tourism industry, not to lower your other taxes. This means that you are paying these new taxes to line the pockets of big hotel chains.
HB 3579 also opens the door for new taxes on other services. If Texas is now taxing travel agent’s services, why not create new service taxes on personal services like home repair, manicures, pedicures, or tattooing.
Lower taxes have produced a revenue windfall for Texas — an additional 15% this year. If we oppose more government handouts to big hotels and we prefer to keep the costs of our travel lower, we must reject the new tax on travel in HB 3579.