PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

STATE SPOTLIGHT: Is Texas About to Get Even Better for Small Business & Entrepreneurship?

By at 3 November, 2019, 9:35 pm

by Raymond J. Keating-

Small Business Policy Index 2019: Texas ranked the very best – #1 – among the 50 states.

SBE Council’s “Small Business Policy Index 2019” ranks the 50 states according to 62 different policy measures, including a wide array of tax, regulatory and government spending and performance measurements.

Small Business Tax Index 2019: Texas again ranked very best – or #1 – among the 50 states.

SBE Council’s “Small Business Tax Index 2019” is a subset of the “Small Business Policy Index” report, ranking the states according to a wide array of tax measures, including income, capital gains, property, death, unemployment, and various consumption-based taxes like state gas and diesel levies.

When it comes to its public policy climate for small business and entrepreneurship, Texas ranks the very best among the 50 states. But is the state about to get even better?

One might ask: How is that even possible? Well, there’s always room for improvement when it comes to limiting the costs of government, but Texas voters will get a chance on this coming Election Day, November 5, to make a major improvement.

Texas Ranks Best and Works Hard at Getting Better

According to SBE Council’s “Small Business Policy Index 2019: Ranking the States on Policy Measures and Costs Impacting Entrepreneurship and Small Business Growth,” which ranked the 50 states according to 62 different policy measures, including assorted tax, regulatory and government spending measures, Texas registered as number one among the 50 states. That also was the case on the “Small Business Tax Index 2019,” with Texas ranking best in this subset of the larger Policy Index whereby the states are ranked only on tax measures.

As noted in an SBE Council analysis earlier this year, Texas claims many key positives that make it so hospitable for entrepreneurs, businesses and their employees. A key plus is the lack any income taxes, that is, no personal, individual capital gains, corporate income, and corporate capital gains levies.

To the state’s credit, voters will have a chance on November 5th to approve a ballot measure – Proposition 4 (see the ten propositions on the Texas ballot here) – that would raise the vote threshold in the state legislature for imposing an income tax on individuals.

Proposition 4: Prohibiting state income tax on residents: “The constitutional amendment prohibiting the imposition of an individual income tax, including a tax on an individual’s share of partnership and unincorporated association income.”

Currently, in order to impose an individual income tax in Texas, state lawmakers have to approve the measure by simple majority and then it goes to a statewide referendum vote of the people. That’s a sound protection for taxpayers and the state’s economy.

Proposition 4 would amend the state constitution so that to impose a personal income, it would require two-thirds votes in both the state Senate and House, and then a majority vote by the people in a statewide referendum.

Strengthening taxpayer protections, and enhancing checks and balances, are always welcome steps. Texas voters would make a bold pro-taxpayer, pro-growth declaration on November 5th by supporting Proposition 4.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

 

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