From the Office of State Senator Rodney Ellis

For Immediate Release
April 19, 1999
Contact: Jeremy Warren, (512) 463-0113

Family Value$
Sales Tax Relief Helps Texans Who Need It Most

It's that time again. As Texans all across the state recover from the Uncle Sam's bite, the Texas Legislature is looking for a way to ease the pain. The Texas Senate has taken the first step, passing a $300 million consumer sales tax relief plan that will put more money back in the pockets of Texas families.

Last week, the Senate passed Senate Bill 441, which will eliminate sales taxes on important daily essentials such as diapers and children's over-the-counter medicines, and create a two week back to-school sales holiday to help parents meet the ever-growing burdens of raising a child. This plan will provide real tax relief to Texas' working families.

Eliminating sales taxes on essentials like diapers and children's medicine is the least the legislature can do. As the proud parent of a baby boy, I know just how many diapers are needed in a week and how fast the bill can rise. Eliminating the sales tax on diapers could save Texas parents with one infant nearly $80 a year. Exempting over-the-counter children's medicines will provide a boost for low-income working families, who are more likely to rely on these products to care for their children because they lack health insurance.

In addition, our sales tax holiday will also give parents a desperately needed break when they purchase back-to-school clothing for their children. Children's clothing seems to get more elaborate and more expensive every year, so the back-to-school period is becoming one of the most expensive times of the year for parents. Under our plan, Texas parents will be able to buy socks, shoes, jeans, shirts, sweaters and other clothing staples tax-free.

Though our economy is growing, too many hard-working Texas families are struggling to make ends meet. At 8.25 percent, Texas has one of the highest combined sales tax rates in the nation. According to the Citizens for Tax Justice, Texas has the third most regressive tax system in the nation. High sales taxes hit low income and elderly Texans hardest, forcing our poorest citizens to pay up to six times more of the income in sales taxes than more affluent Texans. While the perception is that Texas is a "low-tax" state, if you are poor the reality is just the opposite. Today, one out of 6 Texans live below the poverty line, and in Harris County approximately 1-in-5 live below the poverty line. Cutting sales taxes will give a break to the Texans that need it most.

While there is a lot of talk about cutting billions of dollars in property taxes, cutting sales taxes' is clearly the better way to help more Texans. When the legislature approved $1 billion in property tax relief last session, few Texans actually got a break because rising property values ate up any savings. In addition, property tax cuts do not provide dollar for dollar relief. That's because, today, Texas families can deduct what they pay in property taxes from their federal income taxes. Any property tax cut homeowners receive will be eaten up by the smaller deductions in federal taxes, meaning a smaller check back from the IRS. If we are going to cut Texans taxes, it does no good if that means they have to pay more to Uncle Sam.

Texas families deserve a break on the essentials. Of all the plans, sales tax cuts will do the best ob of putting money back in the pockets of all Texans. could mean a month of free diapers, or a free pair of shoes for their child. That's a real tax cut Texas families can feel and understand. It is definitely a tax cut they deserve.