FREQUENTLY ASKED QUESTIONS

Here are the most important reasons why we must Eliminate Property Tax.

• Because Private Property Ownership is Central to a Free Society
• Because Property Taxed is Property Not Owned at All
• Because No Tax should have the Power to Leave Us Homeless

Our government requires that we either pay perpetual rent on the property we “own” or face prosecution. Which ensures we never really own it, at all.

That message is clear: We live on our land at the government’s mercy.

Our Founders did not pledge their “lives, fortunes, and sacred honor” to secure their rights to “roads, schools, and public services.”

They considered property ownership an “inalienable right,” just like life and liberty.

“Among the natural rights of the colonists are these: first, a right to life; second, to liberty; third, to property; together with the right to support and defend them in the best manner they can….” — Sam Adams, “The Rights of the Colonists” November 20, 1772

“Property is surely a right of mankind as real as liberty.” — John Adams, “Discourses on Davila”

“Property must be secured or liberty cannot exist.” — John Adams, “Discourses on Davila”

“Now what liberty can there be where property is taken away without consent?” — Sam Adams, “The Rights of the Colonists”

“No power on earth has a right to take our property from us without our consent.“ —  John Jay, Address to the People of Great Britain

Many of the principles that guided them came from philosopher, John Locke. In his Second Treatise of Government, Locke said, “Government has no other end but the preservation of property.”

That’s why our Founders created these institutions in the first place.

They believed that if government can take it away “without consent” then we don’t own either our property or our liberty.

George Washington delivered the following message to the Continental Army. While looking out into New York Harbor, they saw, forming against them, the largest British expeditionary force in that nation’s history until the First World War.

“The time is now near at hand which must probably determine whether Americans are to be freemen or slaves; whether they are to have any property they can call their own; whether their houses and farms are to be pillaged and destroyed, and themselves consigned to a state of wretchedness from which no human efforts will deliver them.

The fate of unborn millions will now depend, under God, on the courage and conduct of this army. Our cruel and unrelenting enemy leaves us only the choice of brave resistance or the most abject submission.

We have, therefore, to resolve to conquer or die.” — Battle of Long Island 27 Aug 1776

Property Tax is Feudalism.

It comes down from a system first instituted in 1066 by England’s William the Conqueror. Here’s how it worked.

After conquering England, William divided it with his supporters who paid a tax to hold their land. Those landholders (Barons) received the Crown’s protection and could rent the property. Those feudal tenants (Vassals) rented the land, lived on and worked it for a fee. But anyone who missed paying that tax forfeited their land.

In the Virginia Company Charter, King James made sure that the system followed settlers to Jamestown. The Charter assured the protection of the Crown, but settlers paid a share of the profits. 

Buy or sell the land, but landholders always paid the King (for his protection, of course). This happened to all thirteen colonies.

https://www.theatlantic.com/business/archive/2016/08/the-feudal-history-of-property-tax-in-america/497099/

Our Courts have declared that property tax is legal because it pre-existed in common law. Which is true. However, our two most important founders, Thomas Jefferson and John Adams, said the pre-existing common law was inapplicable.

Jefferson wrote in “Summary View of the Rights of British America,”

“In the earlier ages of the Saxon settlement feudal holdings were certainly altogether unknown; and very few, if any, had been introduced at the time of the Norman conquest. Our Saxon ancestors held their lands, as they did their personal property, in absolute dominion, disencumbered with any superior, answering nearly to the nature of those possessions which the feudalists term allodial.”

(The term allodial is defined as, “Free from the tenurial rights of a feudal overlord.” And the meaning of tenurial is, “The holding of property by a superior in return for services to be rendered.”)

Those who lost the Battle of Hastings lost their property. William the Norman gave it with feudal duties to those whom he wanted to have it.

Jefferson continued, “Feudal holdings were therefore but exceptions out of the Saxon laws of possession, under which all lands were held in absolute right. These, therefore, still form the basis, or ground-work, of the common law, to prevail wheresoever the exceptions have not taken place. America was not conquered by William the Norman, nor its lands surrendered to him, or any of his successors. Possessions there are undoubtedly of the allodial nature.”

In “Dissertation on the Canon and Feudal Law” (1764) John Adams declared that Canon Law was “Ecclesiastical Tyranny,” Feudal Law was “Civil Tyranny” and America was free from both.

“It was this great struggle, that peopled America. It was not religion alone, as is commonly supposed; but it was a love of universal Liberty, and a hatred, a dread, an horror of the infernal confederacy before described, that projected, conducted, and accomplished the settlement of America.”

“After their arrival here, they began their settlement, and formed their plan both of ecclesiastical and civil government, in direct opposition to the canon and the feudal systems.”

Can a “feudal” property tax be imposed by delegation? Here’s what Samuel Adams said in “Rights of Colonists.”

“…it is the greatest absurdity to suppose it in the power of one, or any number of men, at the entering into society, to renounce their essential natural rights, or the means of preserving those rights; when the grand end of civil government, from the very nature of its institution, is for the support, protection, and defense of those very rights; the principal of which, as is before observed, are Life, Liberty, and Property. If men, through fear, fraud, or mistake, should in terms renounce or give up any essential natural right, the eternal law of reason and the grand end of society would absolutely vacate such renunciation. The right to freedom being the gift of God Almighty, it is not in the power of man to alienate this gift and voluntarily become a slave.”

English philosopher, John Locke said in his “Second Treatise of Government,”

“…no body can transfer to another more power than he has in himself; and no body has an absolute arbitrary power over himself, or over any other, to destroy his own life, or take away the life or property of another.”

Like William the Norman, your State has assumed authority over your property and enslaved you to sustain it. And no authority can be delegated to take another’s property for the same.

This is Civil Tyranny.

Because no tax should have the power to leave you homeless.

“Property tax itself is unfair. Any amount. What it boils down to is, the government owns it, not you. Period!!!!! …That’s why I’m trying to shift from a property tax system to a consumption tax system so you control what you pay.” – Greg Abbott, 14 APR 2019; Twitter/X

“…while property tax abolishment is not the focus of this particular bill (SB1-85R), it has my full support. This is evidenced by my joint-authorship of HJR 21 (abolish M&O property tax) during this current special session.” – Dennis Bonnen, HD25 (Angleton); Facebook, 12 AUG 2017

“…people don’t ever actually own their home anymore. They are in a constant tenant relationship with the State….” – Senator Larry Taylor, SD11 (Pearland); Texas Senate Select Committee on Property Tax Reform Hearing, 06 FEB 2019

“Our constituents are demanding that we look at a consumption tax to abolish property taxes so this nightmare won’t continue to happen.” – Senator Brandon Creighton, SD4 (Conroe); Texas Senate Select Committee on Property Tax Reform Hearing, 29 NOV 2018

“I’m all for a consumption tax in order to eliminate property taxes.” – Representative Dwayne Burns, HD58 (Cleburne)

“We need to replace property tax with a consumption tax.” – Senator Pete Flores, SD19 (San Antonio); The Texan’s Podcast, 24 JUN 2019

We’re not handing a problem to the Legislature telling them, “Go fix it!” We’re presenting a solution. It’s the only comprehensive solution ever filed in the Texas Legislature. 

In 2013, Rep. George Lavender (HD1) authored HB3742 (83R), a 224-page bill written by Economist/Attorney Rick Cunningham from a detailed, 159-page fiscal analysis that he published in 2010. 

Harvey Hilderbran, Chair of the Ways & Means committee sent HB3742 to the Legislative Budget Board and Legislative Counsel for review.

 Unfortunately, time ran out, the 83rd session ended, and no one returned to carry it forward in the following sessions.

Here is its simplest distillation.

“Abolish 60+ taxes (including Sales, Property, and Franchise), replacing them ALL with a 7% Consumption Tax that uses an expanded tax base instead.” 

This is NOT adding “another new tax.”  Nor is it attempting a temporary workaround that like every past reform since the Great Depression, would fail. 

Instead, it restructures the Texas tax system by using a simple, efficient, fair, and transparent, consumption-based tax of 7%. 

That’s it.

Our bill is “revenue-neutral” replacing all the funds it eliminates.

On the simplest, macro-level, here’s how it works.

We need $117B to replace all revenue that HB3742 (83R) would abolish. Texas GDP is $2.6T. A tax rate of 7% on the whole economy would capture $182B. If we exclude up to 35%, the net is $118B. 

That’s more than sufficient.

The infrastructure needed for the collection and distribution of revenues by the state already exists in the sales tax system.

Local authority is maintained while replacing all eliminated tax sources with equivalent revenues.

Nothing changes except the source of revenue. 

Just as they do today, the State Comptroller will collect, allocate, and distribute local revenues to local taxing authorities. 

The current tax cap for Municipalities will rise from 1/2% to 1%. 

The cap for Counties will remain at 1%, but the expanded tax base will produce higher revenues. 

School districts will be allowed up to 1/2% within their boundaries for enrichment purposes. 

Other local taxes are included at reduced rates, but the total local burden is capped at 3%.

Here’s what Senior Economist Dr. Vance Ginn, the Texas Public Policy Foundation’s former Director of the Center for Economic Prosperity, said in his invited testimony to the House Ways & Means Committee in February 2019.

“Property Taxes are regressive in nature… Lower-income people who are trying to buy their first home can’t often afford it because the property tax is too high. Or those who have already paid off their mortgage oftentimes they’re paying more in property tax than they ever did on their mortgage….” 

On average across Texas, property tax is equal to about 50% of a homeowner’s mortgage. That’s why a property tax is the “most regressive,” hitting the low and middle-income homeowners the hardest.

HB3742 continues to exempt items like groceries, medicines, health care, and other basic needs. 

It’s the disproportionate percentage of such families’ incomes spent on these items that would make a consumption tax regressive. But HB3742 preserves those exemptions to make sure that these individuals and families are not disproportionately impacted by it.

That’s why HB342 will benefit the low and middle-income Texans the most.

No. Never.

In 2019, Texans passed a Constitutional Amendment prohibiting a State Income Tax. We approved it by an overwhelming majority of 74%. 

A 2/3rds majority of both House and Senate legislators would have to pass a bill to overturn it.  And a majority of Texans would have to vote to approve it. 

Not without Taxpayer approval.

HB3742 (83R) prevents taxing jurisdictions from raising their consumption tax without a “majority of voters” approval.

Although a single consumption tax is transparent, it’s also powerful. Even a small increase in the rate, results in an enormous amount of additional tax revenues. 

That’s why we include a constraint in HB3742 to mitigate this risk. Raising the tax, by any amount, requires a referendum vote. And there is no hiding a change in rate that everyone sees and must pay with every purchase.

That’s much more transparent for all Texans than our system of 60+ hidden taxes today, some of which compound as “a tax, on a tax, on a tax.”

No.

While some have lower property taxes, every State has them. Depending on whose research you reference, Texas ranks from 3rd to 6th highest.

But in Texas, rates and values vary widely from King County (highest) to Terrell County (lowest).

https://www.tax-rates.org/texas/property-tax

You’ll find several studies by the Texas Public Policy Foundation (TPPF) since 2012 that answer that question. We have those publications in our Files Section. 

TPPF estimates that the pro-growth, pro-families effects of this single reform will create anywhere from 127,700 to 312,700 new jobs in Texas, and increase Texans’ incomes by an aggregate of between $21.3 billion to $52.1 billion, or between 2 and 4.3%, over the first five years.

The average Texas property buyer will pay in property tax an equivalent of about 50% of their mortgage. If every Texas property buyer had 50% more in their budgets to spend they would be able to more easily afford a first home, buy more land, or a bigger commercial facility.

Yes. To pass HB3742 (83R) and Eliminate Property Tax, we’ll need every one of our 3.1 million Texas businesses on our side. 

And any tax on our businesses or industries just becomes a hidden, compounding tax paid by Texas consumers in their cost of goods and services.

No. Texans don’t want any kind of tax on their property. 

That’s why, in 2015, 86% of Texas voters approved a Constitutional Amendment prohibiting any tax on real estate transactions. 

On average, Texans today pay an equivalent amount of about 50% of their mortgage in property tax. If we Eliminate Property Tax without taxing property sales, every Texas property buyer would have much more in their budgets to spend. 

That may result in a first or better home, more land, a bigger commercial facility, or a better location.

No. Not any more than they would today.

A 7% consumption tax is slightly more than what consumers pay today. Louisiana, Arkansas, and Oklahoma would all still have higher Consumption Tax rates than Texas. 

A plethora of 60+ hidden taxes, some of which compound as “a tax, on a tax, on a tax,” will be gone from the cost of Texas goods and services, too. 

That helps lower prices and their economy.

Gone. 

When we Eliminate Property Tax, we Eliminate County Appraisal Districts (CAD). There will be no need for them. 

In 2023, the Texas State Comptroller reported  2,713,270 appraisal protests. The CADs alone cost Texans an estimated $618M annually. 

The annual ritual and expense of reappraisals, hearings & denials ends for Texas property owners.

Because it’s never worked.

We’ve been trying to do this since the Great Depression. Property Tax Relief and Reform schemes have been tried over and over and over. They’ve always failed.

During the nationwide property tax revolt of the “Great Depression” politicians created the Homestead Exemption to provide relief. They implemented Sales Tax to provide reform and halt rising property taxes.

• 1992 – Lottery: a new revenue source to lower property tax
• 1997 – Homestead Exemption: increased from $5,000 to $15,000.
• 1997 – School M&O Tax: was reduced by 1/3rd
• 2004 – Homestead Exemption: increased to $25,000
• 2006 – Franchise Tax: a new revenue source to lower property tax
• 2015 –  Homestead Exemption: increased to $40,000
• 2023 – Homestead Exemption: increased to $100,000

Did any of that stop your property taxes from rising?

Property tax revenues grew 528%.

Absolutely.

That’s why in the spring 2018 primary, 68% of voters passed Proposition One to “Replace the property tax system with an appropriate consumption tax equivalent.”

Renters bear a massive property tax burden.

While the Texas homeowner, business and agricultural property owners are all protesting property tax, renters are far from exempt.

Most never realize they are paying an outrageous amount of tax levied on rental properties.

Why?

Because renters never get homestead exemptions. Because the disabled, the veteran, and the senior citizen forfeits any of their exemptions, too. And while appraisal increases are capped for homesteads, there’s no cap on rental properties.

Between 2009 and 2018, the Harris County Appraisal District reported that the average taxable value on single-family homes increased by 41%. But multifamily homes increased by 129%. That’s more than 3-times faster!

It’s time for renters to wake up and realize, they are being plundered the most by their local governments.

No. There aren’t.

While there are cities like Stafford and Von Ormy that have no “city” property tax, every county in Texas has them.

King County collects the highest property tax in Texas, levying an average of $5,066.00 (1.56% of median home value) yearly in property taxes.

Terrell County has the lowest property tax in the state, collecting an average tax of $285.00(0.67% of median home value) per year.

http://www.tax-rates.org/texas/property-tax

Eliminating Property Tax is not a hallucination. There are entire nations that run their governments without a property tax. Texas can, too. 

Where to Buy Property Without Paying Property Tax

Economist/Attorney, Rick Cunningham did the research, developed our solution, and wrote HB3742 (83R).

It started with Rick’s attempt to discover past research on how we could Eliminate Property Tax. Although he found “macro-level” studies, he found nothing “that looked in detail at every taxing jurisdiction of the state” (5,000+ today).

Rick did his own study to find out “What does the picture look like if you tried to tinker with sales tax?” He concluded that by using sales tax, “There was no way… to do a wholesale replacement of the property tax.”

That led Rick to ask, “What would happen if instead of looking at what we have and trying to figure out how we fix it, suppose we didn’t have anything?”

Using that approach, he started with three key objectives.

1. Generate sufficient revenues to fund the government the electorate has chosen.
2. Distribute taxes equitably so all taxpayers bear a reasonable, fair share.
3. Create an efficient and transparent collection process.

He concluded that a value-added tax would best meet all the criteria (at an acceptable rate of 7%).

Once Rick had completed his analysis down to every taxing jurisdiction he concluded that HB3742 (83R) would fully fund 95% of the counties in Texas. 

That left a small percentage of jurisdictions that would need to be funded by additional means. For some, it could be as simple as joining special purpose jurisdictions together into larger, consolidated regions of their county.

No. Unfortunately, it can’t.

Economist / Attorney Rick Cunningham did his own study to find out “what does the picture look like if you tried to tinker with sales tax?” He concluded that by using sales tax, “there was no way… to do a wholesale replacement of the property tax.” But he concluded that the consumption tax that would best Eliminate Property Tax is a Value-Added Tax (VAT).

A lot of people get unduly alarmed when the hear “VAT.” 

A VAT is just a tax on every sales transaction, either business to business or business to consumer. And remember, we’re not just going to eliminate property tax. We’re eliminating sale, franchise and about 60 others, too.

Here are some myths about a VAT from opponents.

1. A VAT is “hidden” tax.
A VAT is recorded on the invoice of every goods or services sold. It’s about as “hidden” as a sales tax.

2. A VAT is paid by businesses.
A VAT is paid by whoever is the final consumer. Like all taxes, hidden or transparent, they are passed on to the consumer in the final price.

3. A VAT compounds with each transaction.

A VAT does not compound. Here’s an example of how it works.

You buy $5 of baking goods, bake a cake and sell it for $10. If sales tax were 10%, the baking goods would still costs $5 (resale products are sales tax exempt). But the consumer’s price is $11. The sales tax collected is $1.

With a VAT, the $5 of baking goods cost $5.50. (The grocer collects a 10% VAT and pays $0.50 on the sale.) You sell your cake for $11, but the VAT you pay to the state is only $0.50. (You get to deduct the VAT you already paid.) The government gets $0.50 + 0.50 = $1.00.

4. Imported goods pay less VAT and local firms are disadvantaged.

A consumer pay the same 10% on imported goods as local goods. There’s no difference.

Tax fraud is a problem with sales tax. Anyone with a sales tax exemption may potentially purchase products and evade paying sales tax. The loss of revenue compounds with the cost of enforcement, too. With a VAT, compliance is much easier while tax fraud and evasion are more difficult and less likely. 

That’s because everyone pays a VAT on every purchase. Everyone. As a business, you get your money back when you resell, charge a VAT and offset what you paid with the VAT you collected. But tax fraud just does not work. That’s why, at the same rate as a sales tax, collections and revenues are higher.

On a macro-level, a Sales Tax does work.

If Texas has a $2.6T GDP. HB3742 (83R) eliminates $117B. A 7% sales tax with 35% of goods and services excluded, nets $118B. So, on that level, it works.

But when you get down to every one of 5,000+ individual taxing jurisdictions, that’s where it begins to fail. That’s because some of the “special purpose” jurisdictions (which were started only because those who did this knew they could collect property taxes) have little or no sales. No sales, no sales tax. Or they have so little, it would take a much higher sales tax to make up the lost property tax. 

As an example, there is an affluent bedroom community in Houston called Piney Point Village. A lot of very high-value homes, but zero goods or services are sold. Hugh property taxes, zero sales taxes. In that community, there’s no way to replace the property tax lost with a sales tax.

When Economist / Attorney Rick Cunningham completed his analysis down to every taxing jurisdiction, he concluded that by using a VAT, HB3742 (83R) would fully fund 95% of the counties in Texas. But there was still that small percentage of jurisdictions that would need to be funded by other means.

For some, it may be as simple as joining special purpose jurisdictions together into larger, consolidated regions of their county or going countywide.

 Nevertheless, there will be challenges to resolve. We just have to get all these brilliant people who say, “It can’t be done!” to start looking through the other end of the telescope and figure out how.

Yes. We can still exempt the same products and services that we do today.

Groceries
Prescription & Over-the-Counter Drugs
Medical Devices & Services
Motor Vehicles Leases & Rentals
Machinery
Raw Materials
Utilities & Fuel
Transportation Services

https://www.salestaxhandbook.com/texas/sales-tax-exemptions

The following table, from the Federation of Tax Administrators, provides a comprehensive list of sales taxed services in other states and compares them to Texas. An “E” denotes an item that currently excluded in Texas. In total, we tax 100 of 183.