SCORE: Taxpayers 0 - Big Business 2.8 Million

September 1, 2005

The property tax reductions promised Texas homeowners has not yet appeared, but today the Austin American Statesman reports Wal-Mart will save an estimated $2.8 million dollars a year in property taxes thanks to a state funded purchase-lease deal.

The State of Texas has gone into the land development business using powers and leverage only available to government. By doing so the State is now directly competing with private enterprise and violating the most fundamental principles of capitalism.

You can wrap it in public school funding platitudes, but at its core it is still wrong.

Creative accounting in Austin appears to make money appear out of thin air. Someone needs to explain how Wal-Mart can skip paying nearly $3 million a year in property tax without that having an impact on local government.

Bottom line, Wal-Mart is paying less than they would without the State giving them preferential treatment over other businesses. The State isn’t even requiring employment or investment targets be met as they would if a county or city were providing economic development incentives. And in the process the State is collecting more than its fair share. It's no surprise that both think it a good deal. Wal-Mart pays less and the State makes more.

This is another recent example of government greed. It's the kind of win-win-win accounting we would expect Enron to have approved.

What is government greed you ask?

In a democratic society the government taxes the governed to provide certain limited services. Unfortunately, we have created a direct linkage between government spending and winning elections. When the elected officials who operate our government desire to spend more than the governed are willing to pay for it creates a political conflict. It is very simple and nothing new, spending is popular and taxing is not. To overcome that conflict the government improperly is driven to generate its own revenue independent of taxes, something I call government greed. At first that might look like a good thing, less taxes and more services. However, it creates an even greater conflict. It undermines the fundamental principles of our democracy and capitalist system. Moreover it abandons fiscal restrain and responsibility. Revenues derived from non-traditional tax sources are often treated with significantly less public accountability. Somehow we view taxes as our money, something we earn, while other monies are akin to gifts and windfalls.

Texas Land Commissioner Jerry Patterson calls this deal, "the flagship of our future efforts in the real estate area." If so, we would call this first ship in the fleet the HMS Taxtanic.