Prop 4 would make it harder for Texas to implement personal income tax

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AUSTIN (Nexstar) — Texas is already one of nine states where residents don’t have to pay personal income tax and come November, voters will get to decide if they want to make it harder for the state to implement one. 

During the 86th Legislature, lawmakers passed House Joint Resolution 38 and argued it would keep Texas’ economy strong.  

“The lack of an individual income tax is part of the low-tax, pro-growth approach that has fueled the state’s robust economic expansion,” the bill analysis reads. “Texas has become a prime place for families and businesses to relocate in large part due to the absence of such a tax. Introducing an individual income tax would disincentivize savings, investment, productivity, job creation and economic growth in the state.” 

On Nov. 5, Texans will see Prop 4 on their ballot, which reads “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.” 

If it passes, imposing a statewide tax would require a two-thirds vote from both the Texas House and Texas Senate and voters to decide. 

“We used to call it the Texas Miracle,” said Rod Bordelon, a senior fellow at the Texas Public Policy Foundation, which supports Prop 4. “There were a couple of key basic points for the Texas Miracle. One is low taxes and the other is reasonable regulations. 

But experts say there’s a way the state balances out the lack of an income tax currently. 

“It’s good for small businesses,” Texas Taxpayers and Research Association President Dale Craymer said. “Small businesspeople can take their earnings and their profits that they make from the business, put it back and help grow that business. It’s also good for corporate headquarters. Texas is an attractive location for Fortune 500 companies to locate here. The lack of a personal income tax is very much appreciated by their corporate staff.” 

“It’s balanced out by our very high property taxes and very high sales taxes,” he added. 

The law right now requires lawmakers to seek voter approval if they want to impose a statewide income tax and any funds from the tax would help lower property taxes and fund education. The Texas State Teachers Association says Prop 4 is unnecessary because of current law. The association also worries it closes off the door to any future funding possibilities for education. 

“Of course, in Texas, taxes are a no-no, but for us, it’s a necessity,” said Ovidia Molina, vice president of the Texas State Teachers Association. “We need to fund our schools. Right now, we don’t think that there’s going to be an income tax imposed, but in the future, if it’s needed, we need that opening to have the funding go to education.” 

But going back and changing the constitution again if Prop 4 passes isn’t impossible. 

“There’s nothing that says they can’t come back later and revisit that,” Craymer said. 

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