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Follow TURFGiveaways to oil & gas companies in TX threaten free markets
Posted by Debra Medina on Mar 31, 2011 in Blog, Featured | 1 comment
There’s no shortage of noble talk about promoting free markets and prosperity in Texas. Gov. Perry often champions the “free market” and boasts that Texas government understands that it shouldn’t interfere in business and markets. “Government should just get out of the way,”state leaders often say.
But that’s really just so much hot air. Take for example, as the Houston Chronicle reported this weekend, the special exemption for “high-cost” gas production. According to Patricia Hart, the exemption was created as a temporary measure in 1989 to encourage expensive and technically difficult gas production. It was extended in 1995 and 1999, when it was promoted by state Rep. Tom Craddick, R-Midland. “Then, in 2003,” she says, “when Craddick became speaker of the House, the Legislature passed a complicated bill with dozens of “technical corrections” to the state tax code. Tucked inside was a single line that struck the expiration date of the high-cost gas exemption. As a result, the tax break became permanent.”
Or as Wick Allison points out in his recent look at “The Welfare Queens of Texas”, “there are hundreds of special favors threaded through the Texas tax code. The insurance industry in Texas has a particularly effective Austin lobby reaping what some might call a hefty discount: the industry pays 46% less in premium tax than the national average.” Chief among those lobby groups, the Texas Lobby Group and Mike Toomey, former chief of staff to Governor Perry.
A comparison of state tax burden as related to gross Texas business sales demonstrates just how big those special favors are. For each special favor, that tax burden is shifted from a favored business or special friend to another business or individual Texans. Mining, construction, manufacturing and trade industry businesses all pay a significantly lower percentage of tax than do businesses in agriculture, utilities and transportation, information, finance, insurance, real estate and other service industries.
Where’s the justice? Richard M. Ebeling, in referring recently to Adam Smith’s classic work on the Wealth of Nations, noted in order for a society to prosper, “Government activities [must be] greatly limited to those basic but essential functions of recognizing and protecting the right of each individual to his life, liberty, and honestly acquired property. This includes a system of impartial rule of law with no political favors or privileges for some at the expense and disadvantage of others .”[emphasis added]
Texans have had enough special favors to choke a horse. And frankly, they’re making us sick; physically, politically and economically ill. Let’s hope the freshmen class will bring a renewed sense of limited government and free market to the Capital. It’s pretty clear most of the old guys are more interested in legislating those special favors than in creating an impartial rule of law.
Further, government should refrain from “politics of envy against “business” and the entrepreneurially successful, since it is private enterprise and creative and risk-taking businessmen in any society who are the “human engines” for growth, innovation, and competitive coordination of the economy.”