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Thursday, October 27, 2016

Rick Perry talks about cutting taxes, spending, and managing budgets as if his ten years as Texas’ chief executive have lent him the knowledge and experience to be a wise fiscal manager. Unfortunately for Texans and, now that he is seeking the presidency, possibly for Americans as well, that does not appear to be true, in more ways than one, as Washington Spectator editor Lou Dubose explains:

Because there is no income tax [in Texas], property taxes are high. In 2006, Perry called a special session to address property taxes. With no income tax, there are no easy fixes. Yet Perry found one. A business-margins tax he said would provide enough revenue to allow for reductions in property taxes.

It was evident at the time that the new tax would not deliver what the governor promised. The state comptroller, [Republican] Carole Strayhorn, had her staff run the numbers on Perry’s tax-reform proposal.

“In 2007,” she wrote in a letter to Perry, “your plan is $3.4 billion short; in 2009, it is $5.4 billion short; in 2010 it is $4.9 billion short, and in 2011 it is $5 billion short. These are conservative estimates.”

The comptroller warned that “no economic miracle will close the gap your plan creates. Even if every dollar of the current [2006] $8.2 billion surplus was poured into the plan, it would not cover the plan’s cost for more than two years, 2007 and 2008. The gap is going to continue to grow year by year.” The shortfall the bill created could only be closed by tax increases, the comptroller warned, “or massive cuts in essential public services — like public education.

By now we all know what Rick Perry is selling. He collaborates with the private sector to create jobs and to attract jobs from other states. The Texas Enterprise Fund and the Emerging Technologies Fund, his creations, have had unprecedented success.

It’s not as simple as Perry would have you believe.

The two big economic development funds Perry controls operate on a trickle-up economic theory. The state takes money from taxpayers and gives it to corporations to entice them to create new jobs.

Yet corporations often fail to deliver, and the governor and his staff rewrite corporations’ contracts to relax their job-creation requirements.

Grants are often made to companies that would move into the state or expand their workforce without a taxpayer-funded incentive.

The governor hands over millions of dollars to corporations whose executives have contributed hundreds of thousands of dollars to his campaigns.

Perry’s scornful attitude toward science — made plain in his explicit endorsement of teaching “intelligent design,” his dismissal of evolution and his extreme skepticism of climate change — apparently applies to basic mathematics as well. His style of accounting rejects empirical facts and projections about budgets and revenues in favor of “economic miracles” that will supposedly allow government to “grow out of it” when faced with hard choices between deficits and taxes.

Despite his poor personal relationship with George W. Bush, Perry’s version of economics sounds an awful lot like what Bush believed when he embraced tax cuts and supply-side doctrine regardless of nonpartisan estimates awash with red ink. (There’s a similar whiff of cronyism to boot.) If a Republican who specialized in budget gimmickry is so enthusiastically supported by Tea Party voters, imagine how they might respond to a candidate who actually reduced the deficit in a responsible manner — like President Obama with his health-care reform. Then again, perhaps we already know.

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Copyright 2011 The National Memo
  • jussmartenuf

    To say that Texas has no income taxes is only a part of the story. Texas has sales taxes that increase the price of everything they purchase, with the exception only of food from a grocery store or most, not all, medical care. The tax is 8.25% on clothing, services, food at a cafe, cars, gasoline, for profit hospitals, you name it. In for profit hospitals they charge the hospitals the sales tax on all the products they buy, but do not allow the hospital to add the tax as an invoice line item causing them to add it into the overall charge, and then claim the hospital does not charge taxes, a bit of smoke and mirrors.
    Texas also raises great sums from legalized numbers rackets. Desperation gambling in the form of a dozen or more variations of lotto that the poor pour millions into in search of a golden windfall that comes for only one in millions.
    Texas is not the workers paradise Rick Perry and his billionaire cronies promote. The ultra rich in Texas, of which their are legions, control and have the only voices listened to.

  • Christian and Liberal

    Despite his advocating teaching Creationism or “Intelligent Design” I do not regard
    Mr. Perry as a Christian. If he really beleives in the Bible as he says he does, he should read what Jesus had to say about greed and taking care of those least able to do so themselves. In the end God will be Rick Perry’s judge as God will be the judge of all of us, however I do not beleive Mr. Perry to be anything even vaguely resembling a Christian. Shame on you, Mr. Perry.

  • slwood


  • OldLou

    This guy wants to be President? President of what? And as far as his being a Christian, my bible reads Jesus’ words on the rich & poor a whole lot different than Rick Perry does. And. . . the “minister” who said the Democratic Party is run by Jezebel & 3 lesser demons needs his mouth washed out with soap & water.