Texas Voters Weigh In On Outlawing Extra Taxes on the Wealthy

Texas voters are about to decide whether to prohibit future wealth taxes — a preemptive strike just in case future politicians decide to copy initiatives from some Democrat-leaning states.

It’s one of the revenue-raising decisions in the hands of voters on Nov. 7, including property tax proposals in Texas and Colorado, and an option for Ohio to become the 24th state to legalize and tax recreational marijuana.

The don’t-tax-the-rich constitutional amendment (Proposition 3) stands out because voters are being asked to outlaw something that has been proposed elsewhere, but not in their state.

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Backers described it as a way to advertise Texas as being friendly to large corporations and rich taxpayers, who have long enjoyed the state’s absence of an income tax.

“This stops a truly leftist progressive tax from ever getting started in the state of Texas,” said state Sen. Paul Bettencourt (R).

It was moved to the ballot during the same legislative session when lawmakers in Austin passed other GOP initiatives favorable to businesses, like revising an expired corporate tax incentive program and creating a new court dedicated to business disputes.

If the ballot question succeeds, the state constitution will bar “the imposition of an individual wealth or net worth tax, including a tax on the difference between the assets and liabilities of an individual or family.”

The measure didn’t trigger a significant opposition campaign, though it does have skeptics. It’s “a boogeyman to scare people so then you can save them,” said Dick Lavine, a senior fiscal analyst with Every Texan, a progressive advocacy group.

Another Texas proposal (Proposition 4) would authorize the state to cut property taxes by $18 billion, a re-gift of sorts after Texas’ thriving economy fueled a historic budget surplus of nearly $33 billion.

The measure was the product of a thorny legislative fight over competing ideas for spending the surplus.

Image from a commercial aired in Ohio by the group Weed Free Kids

Source: AdImpact

Ohio’s cannabis ballot question (Issue 2) has been overshadowed by an abortion proposal, generating scant advertising ahead of the statewide vote.

The group Weed Free Kids made a five-figure TV buy—a small purchase in a state with multiple media markets—to warn parents that the packaging of cannabis edibles can look just like candy, according to the tracking firm AdImpact.

If it passes, adults 21 and older could buy and possess up to two-and-a-half ounces of cannabis, and grow as many as six plants at home. Those purchases also would be subject to a 10% levy on top of state and local sales taxes, potentially netting the state more than $218 million in the first full year of implementation, according to an Ohio State University study.

More Ballot Measures to Watch

Colorado: An initiative (Proposition HH) on the Nov. 7 ballot seeks to lower property tax rates statewide. The measure also would cap local government property tax revenue, and let the state retain and allocate funds it would otherwise have to refund to residents under Colorado’s 1992 voter-approved Taxpayer’s Bill of Rights.

TABOR requires voter support for measures increasing state revenue and restricts how much Colorado agencies can retain and spend. Proposition HH’s cap on local property tax revenue would spare school districts and home-rule cities and counties, but other municipalities and special taxing districts would collect less revenue if the measure succeeds. The state Supreme Court dismissed a case challenging the measure’s constitutionality.

Texas: Some manufacturers would get a targeted tax break worth an estimated $207 million over four years under another Texas ballot initiative (Proposition 10).

That measure would stop schools, cities, and counties from collecting taxes on the value of property produced by medical and biomedical manufacturers, including medical devices, pharmaceuticals, and personal protective equipment.

Another Texas question (Proposition 2) would give counties and cities the option to exempt childcare facilities from paying some or all property taxes. The exemption must be at least half of the appraised value of the property; for rented spaces, the savings must be passed down to the childcare center tenant.

Supporters say this is needed after one-fifth of childcare providers in the state closed between March 2020 to September 2021 amid the COVID-19 pandemic. The economic impact is uncertain because it would be up to municipalities to opt in, and also their responsibility to figure out how to make up for lost revenue.

Missouri voters will weigh a similar childcare tax exemption next year.