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State Sen. Jeff Wentworth of San Antonio says his opponent in a July 31, 2012, Republican primary runoff has a hankering to hike taxes.
A Wentworth campaign mailer tells residents of the Austin-to-San Antonio Senate district: "Don’t be tricked: Donna Campbell," his New Braunfels runoff opponent, "is pushing a 35% national-state-local sales tax on medicine, healthcare, groceries, water and real estate!" Another Wentworth mailer presents her as saying: "Texas needs a 35% sales tax on groceries, medicine, healthcare, water and ALL purchases." And a July 18, 2012, news article in the San Marcos Daily Record quotes Wentworth as saying: "My opponent's call for a 35 percent sales tax in Texas on medicine, groceries, water, real estate and all purchases is absurd."
A refresher: The existing state sales tax of 6.25 percent applies to retail sales, leases and rentals of most goods plus 17 categories of taxable services including Internet access and security services. Also, Texas cities, counties, transit authorities and special-purpose districts have the option of imposing an additional local sales tax for a combined total of state and local taxes of 8.25 percent. Many items -- including water, groceries and medicine -- are exempted from the sales tax.
So, Wentworth is saying that Campbell both wants to more than quintuple the state sales tax rate and start applying the tax to some essential items.
One hitch for us in starting this fact-check was the absence of any public sign that Campbell has been campaigning for a 35 percent state-federal-local sales tax. Any such proposal goes unmentioned on her campaign website, where she says she will work to decrease taxation.
Asked how Wentworth unearthed his opponent’s double-digit tax-hike push, Wentworth’s consultant, Bryan Eppstein, pointed out that while Campbell was running for the U.S. House in 2010, Austin’s KVUE-TV quoted her as advocating the replacement of federal income taxes with a 23 percent federal sales tax on consumer goods and services, a position then pointed out by her Democratic opponent, U.S. Rep. Lloyd Doggett.
An online version of the Oct. 29, 2010, KVUE news story quotes Campbell as saying: "Income tax, payroll tax, you wouldn’t pay any of that" under the approach. "If it’s a retail tax, and you buy something new you’d pay 23 percent," she said.
Eppstein further pointed out that an official with the right-leaning Texas Public Policy Foundation, Talmadge Heflin, testified afresh in May 2012 in favor of the state wiping out property taxes and making up the lost revenue with changes in the sales tax. He said that based on Heflin’s testimony, Wentworth concluded that Campbell favors a state sales tax rate of 12 percent.
Heflin, a former chairman of the House Appropriations Committee, hearkened in his testimony to an April 2009 foundation report stating that revenue generated by property taxes could be replaced by money raised from the sales tax by setting the rate at 12.5 percent if the existing tax is extended to property sales or, he said, 9 percent if the tax is extended to property sales as well as all services that are taxed in at least one other state. The report says that if the sales tax is not expanded to additional items or services, its rate would need to be around 14.5 percent to raise revenues lost by eliminating property taxes statewide.
Eppstein also noted that Campbell has the endorsement of Texans for Fiscal Responsibility, a group that asked candidates seeking its support to fill out its 2012 candidate questionnaire, including questions about phasing out property taxes in return for raising sales taxes.
One question on the survey refers to "end-user consumption taxes," meaning sales taxes. The questions says: "Would you support moving Texas away from property taxes in favor of the existing sales and use tax?" Candidates are asked to support or oppose. The question is followed by this text: "Note: Tax swaps, phase-outs or trade-offs are not considered tax increases unless the total tax burden is increased."
Next on the questionnaire: "Statement: Texas should phase out property taxes in favor of end-user consumption taxes." Candidates are asked to agree or disagree.
By email, Campbell spokesman Jon Oliver said that Campbell replied on the questionnaire that she supports moving Texas away from property taxes to the existing sales tax and also agreed that Texas should phase out property taxes in favor of end-user consumption taxes.
But, Oliver said, in order to have Campbell’s support, a proposal to replace property taxes with sales taxes would have to lower the overall tax burden for Texas families and businesses; be limited to taxing items currently covered by the sales tax; be phased in gradually; and win voter approval at the polls.
Earlier, Oliver said by email: "She is intrigued by the overall idea of a consumption tax instead of a property tax if it would truly lower the tax burden, but it's not part of her platform and she certainly wouldn't support a state sales tax in the form Sen.Wentworth has claimed she would -- that is, taxing items that are currently exempt."
Oliver noted, too, that Campbell has signed three pledges disavowing higher taxes: the Americans for Prosperity Taxpayer Pledge in favor of requiring voter or legislative supermajority approval for tax and spending increases; Gov. Rick Perry’s "budget compact" pledge to oppose any new taxes or tax increase; and one to taxpayers, advocated by Texans for Fiscal Responsibility, stating she "will oppose and vote against any and all efforts to increase taxes."
We circled back to Eppstein, asking for evidence of Campbell talking up a 35-percent sales tax. By telephone, Eppstein said he has heard Campbell indicate as much, but did not record it.
Wentworth says Campbell is pushing a 35 percent sales tax extending to medicine, groceries and real estate. She’s not, though we can see the threads behind this misleading claim.
While running for Congress in 2010, Campbell spoke out in favor of a possible 23 percent federal sales tax in return for wiping out federal income taxes. In the same spirit, she now supports replacing property tax revenue collected across Texas with income from the state sales tax. By itself, that move could drive the state sales tax rate to 14 percent or so. Then again, the conditions her campaign lays out could be taken as signals she’s not ready to embrace any sudden surge or broadening of the tax.
Campbell’s two stances, taken years apart in campaigns for different offices, reflect on sales taxes at different levels of government.This claim distorts both positions by effectively combining the possible tax rates. All told, too, it’s ridiculous to assert that Campbell, who has signed no-new-tax pledges, is pushing or calling for an expanded sales tax set at 35 percent.
Pants on Fire!
News story, "State Senate: District 25 Republican Runoff: Jeff Wentworth focusing on freedoms, taxes and education," San Marcos Record, July 18, 2012
News story, "Experts: Doggett's seat safe, Doggett: Campbell is 'tea party extremist,'" KVUE-TV, Austin, Oct. 29, 2012
Report, "Enhancing Texas' Economic Growth Through Tax Reform,", Texas Public Policy Foundation, April 2009
Telephone interview and email (excerpted), responses to PolitiFact Texas, Bryan Eppstein, July 23, 2012
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