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| Republican for Texas Senate District 4 |
| Paid for by Galloway for Senate, PO Box 956, Tomball, TX |
Under the guise of property tax relief, the Texas Legislature passed the largest tax increase in state history. Despite record budget surpluses, the Texas Legislature increased taxes on Texas business owners by more than 6 billion dollars in the last budget. The "Margin Tax" is a business income tax based on gross receipts, less either the cost of goods or cost of wages. This means that many small business with high revenue and low percentage of profit, particularly those who rely heavily on contract labor (which is not deductible) and those that have a close to even ratio of cost of goods and wages will see a dramatic increase in their tax burden. In some cases, a business may pay more in margin tax than they made in profit. In fact, under the new law a business can lose money and still be required to pay taxes on revenue. Because the Texas Legislature failed to cap the automatic increases that occur through rising property tax appraisals, the end result will be a net increase in spending. In the last 10 years government spending has increase from 6.5% to 8.5% of GSP (Gross State Product). Resulting in larger government and higher taxes. We must end the "Shell Game" that is continuously played on taxpayers by the legislature. By controlling the growth of state government, at the rate of inflation and growth in population, surplus funds will be available to achieve true reduction in the total tax burden. |