02 August 2007

Tired of Sales Tax, Anyone?

The taxing system in Texas favors people with more money and penalizes those with less money.
Most of the tax revenue in Texas comes from Sales Tax. Sales Tax is a tax fee that is added to many consumer products, and the money from that fee goes to the Texas government. We have all experienced this type of tax. Ever see a 99-cent value meal? The annoying 7 cents that make you have to give a dollar bill and some coins are the sales tax.
Since low-income taxpayers buy consumer products as do high-income taxpayers, both end up paying about the same amount of tax money. However, when you divide the amount of sales tax by the income of each taxpayer, the percentage for the lower income taxpayer will be significantly higher than that of the high-income taxpayer. The trend that lower income families pay higher percentage of their income to taxes is called a regressive tax system.
The federal tax system, which is an income tax, is a progressive tax system. In a progressive tax system, higher income brackets pay a higher percentage of their income to taxes. This kind of system sounds more logical, since more money can be raised this way.
For example, lets take a family that earns $10,000 a year. Have them pay 10% of their sales tax a year – that’s $1000 / year. A family that earns $100,000 a year will maybe pay 2% of their income on sales tax, or $2000 / year, this is still more than the low income family, even though the percentage is lower. Say there are 12 low income families for every 1 high income family, this would bring the total revenue to 12 x $1000 + 1 x $2000 = $14,000
If we would use the income tax, to get the same amount of money, we could tax the $10,000 income families 4% and the $100,000 family 9.2%. This would still give us the same $14,000. This way, the high-income family would still pay a smaller percentage than the low-income family was paying originally, and for the low-income family, the extra $600 that comes from reducing 10% to 4% would be very valuable.
This was a hypothetical example and is for illustrative purposes only, but we can see how the income tax system could work, after all, this is how it is done in the federal level.
Fixing the tax system in Texas would involve a great reform and nobody would be happy to start paying income tax after so many years with out it. When you think about it, though, don’t you hate sales tax? Doesn’t it seem better than paying $1.07 for a $0.99 meal?

25 July 2007

Veto will increase tuition, decrease global competitiveness

Governor Perry vetoed and will most likely force an increase in tuition in many community colleges across the state, including Austin Community College. 
I cannot believe that the governor just did this! 
This is a time in which every government agency, at all levels possible (Federal, State, or Local) must invest in the education of their citizens. In a world in which there is increased competition from abroad, and many countries are investing heavily on education, the only way to compete is to make sure that our citizens remain the creme of the crop.
It is only through education that we will be able to compete in the future, and vetoing a bill would have funded health benefits for employees is like shooting ourselves on the foot.
The benefits would attract, or help retain quality employees in the colleges, which are so necessary for a quality education.
Read the full link here, and feel free to comment what you think!

17 July 2007

On the right lane to reduce congestion and smog

Managed lanes might soon become a reality on MoPac. The situation is being studied and would add managed lanes on some sections of MoPac (loop 1) in Austin.
Many oppose these lanes, sometimes calling them "Lexus Lanes". It is necessary to note that the existing lanes would continue to exist throughout MoPac. The project itself is like adding an extra lane and requiring people riding alone in their cars to pay for using that lane. It is expected that the speed on that lane will be quicker than on other lanes, especially during rush hour. In addition, this lane can be used by Public Transportation and would encourage more people to use it.
I think this is a great idea, it will reduce smog-creating congestion, it will encourage people to carpool or to ride the bus, and capacity will not be decreased.
Safety issues include the access points of this lane as well as the narrowing of the other lanes. Having taken a Highway Engineering class, I learned that the reduction in width will lower the capacity of the lanes by only a small percentage and will not significantly decrease the safety.
Read the full link here