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from NewsLink, Vol. 3, No. 2, Winter 1999
If four tax-cut proposals pending before the Texas Legislature are enacted into law as a whole, Texas will create almost 51,000 new jobs. In addition, the Texas economy will realize close to $6 billion in new investment.
This is the conclusion of analysis performed by the Beacon Hill Institute on behalf of Texas Public Policy Foundation. BHI enhanced STAMP, its State Tax Analysis Modeling Program for application to Texas and concluded that 50,830 new jobs and $5.97 billion in new capital spending will result from the tax cuts. The 3.5% trim in the budget will give Texas homeowners and businesses more than $1 billion in tax relief.
David Tuerck, BHI Executive Director, joined Jeff Judson, President of Texas Public Policy Foundation in Austin in February to unveil the model and the results of its first simulations. “We wanted to see how every Texan will be impacted by these proposals,” said Judson. “This study shows these cuts are good for the economy.”
The study also examined the impact a recent tax decrease has had on homeowners and businesses. In 1997, Texas raised the homestead exemption by $10,000. The study found this tax cut results in the creation of 25,449 jobs and causes $4.2 billion in additional investment in the economy.
The tax proposals included a reduction in the sales tax for selected items, a research and development business tax cut, a property tax cut and a franchise tax exemption for certain businesses.
STAMP was first developed in 1994 to analyze the effects of a proposed graduated income tax on Massachusetts. Since then, it has been used to examine numerous tax-policy proposals in the Commonwealth. STAMP has also been enhanced for use in Ohio, Oklahoma, New Jersey, and in limited version, in Iowa and Louisiana.
“From our analysis, it’s clear that with these proposals, Texas taxpayers are winners, businesses are winners and the economy gets a boost,” said Tuerck. “That’s good all around.”
NewsLink is the quarterly newsletter of the Beacon Hill Institute for Public Policy Research at Suffolk University. © 1996-2003. All rights reserved.
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