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September 29, 2024
NEWS DIGEST
by Brandon Waltens
Good morning,
In a new commentary, Daniel Greer argues that Texans are already taxed like Kamala Harris is in charge:
A few weeks ago, legacy and social media outlets were abuzz with Kamala Harris’ latest attention-grabbing policy proposal: a tax on unrealized gains.
The blowback was swift.
Like other proposals the Harris camp has floated during her coronation campaign, the unrealized gains trial balloon rapidly deflated before it got too far off the ground.
While it may not have caught on, it did cause some Texans to wonder if we are already paying an unrealized gain tax.
In a state where income tax has been constitutionally outlawed, Texas has relied heavily on property taxation to fund government functions.
The taxation on that property isn’t levied when it’s sold but rather annually, based on a perceived increase in value—that’s what might be called an unrealized gain.
Unrealized gains are the theoretical increases in an asset’s value that haven’t been realized through a sale. Texas property taxes, levied annually based on the appraised value of a home, function similarly.
Homeowners are taxed not on their income or actual gains, but on the current market value of their home, even if they have no intention of selling it.
This is akin to taxing someone for the increase in their stock portfolio without them ever selling a share. The rising home values in Texas mean that many homeowners see their property tax bills soar, even though they have not “realized” any profit from their property.
As property values increase, so do the taxes.
And the impact of consistently rising valuations and inflation is staggering over the lifetime of property ownership. Over the lifetime of a 30-year loan, a property owner can be expected to pay the initial value of the mortgage in property taxes alone.
Retirees or fixed-income households, in particular, may find themselves “house rich, cash poor.” They own a valuable home, but the property tax obligations may exceed their ability to pay comfortably. This is effectively taxing them on the presumed wealth tied up in their home—wealth they have not accessed.
The property tax, unlike a sales tax, is morally defunct. It’s arguably worse than an income tax since it’s levied regardless of an individual’s ability to pay.
A homeowner could see the value of their home increase by thousands of dollars but have no actual cash to pay the corresponding property taxes, particularly if their income does not increase at the same rate as their home’s appraised value.
Republican politicians have long run on ending the property tax, but they’ve been cowed by local interests into watering down or abandoning these promises.
Escalating property taxes can push people out of homes they’ve owned for years and create a disincentive for long-term ownership, mirroring the behavior associated with high capital gains taxes on investments.
Recent efforts to cap appraisals and offer limited relief are steps in the right direction, but they don’t address the core issue: homeowners are being taxed on theoretical, not actual, wealth.
Lawmakers have pledged to again lower property taxes when they return to Austin in 2025.
Featured
The future of illegal crossings along Texas’ border with Mexico hinges largely on the results of the 2024 presidential election—and Texans have something to say about it.
“They are not staying here,” Kinney County Attorney Brent Smith said. “They are moving through. They’re headed to the major metropolitan areas of Texas, and they’re headed across the United States.”
Kinney County sits between Del Rio and Eagle Pass on Texas’ southern border.
Smith told Texas Scorecard that how Texans and Americans vote in November will determine four more years of crisis or of taking meaningful steps to secure the border and rid the state of cartel activity.
State
A&M to Deactivate ‘LGBTQ’ Studies Minor and Social Justice Certificate
Rep. Brian Harrison previously called the programs an “outrageous abuse of tax money.
Poll Reveals Rising Minority Support for Trump in Texas
Texans have an unfavorable view of Kamala Harris.
Texas Law Enforcement Rids Border Island of Criminal Cartel Activity
This comes a year after Texas declared Fronton Island state property.
Local
AG Paxton Sues Austin Over Taxpayer-funded Abortion Travel
Attorney General Ken Paxton says the city’s abortion fund violates the Texas Constitution and provides no “clear public benefit.”
El Paso Teacher Arrested Twice for Sex Crimes Involving 12-Year-Old Student
Socorro ISD middle school teacher Llojan Almaraz is charged with child grooming and other felonies.
Texas Supreme Court Sides With Dallas in State Fair Gun Ban Case
Ken Paxton says his fight to protect the Second Amendment is not over.
Federal
Trial Vindicates ‘Trump Train’ Participants Targeted by Democrat Lawfare
Defendants’ attorney Jerad Najvar called the jury’s verdict “a spectacular failure” for the Democrat plaintiffs and said the case “is not over.”
Ag Commissioner Sid Miller Throws Support Behind ‘Make America Healthy Again’
Miller backs Donald Trump and RFK Jr.’s plan to expose “Big Food.”
Panama Institutes Effort to Cut Off Illegal Migration to the US-Mexico Border
According to immigration expert Todd Bensman, the future success of Panama’s border closure efforts depends heavily on the outcome of the 2024 election.
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