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In at le
s, please answer the following
The state of Texas has a reputation for being a “low service, low tax” state. In fact, Texas prides itself
on levying no state income tax on individuals or businesses. While Texas certainly provides a favorable
environment for business, its tax system is
often criticized for being too regressive. Evaluate the pros
and cons of having no state income taxes. Should the Lone Star State start taxing incomes or continue
business as usual?
While answering this question you should discuss the following:
are the major sources of state revenue in Texas?
What are regressive taxes? And, are regressive taxes a fair way for the state to generate revenue?
How does this contrast with a progressive taxation structure?
Who are the winners and losers of the way Te
xas generates revenue?
Note: When thinking about this question you should assume that states that feature no income taxes must
resort to more regressive taxes to generate revenue. Hence, having a state income tax implies fewer or
regressive taxes. That is, you can assume that if Texas introduced a state income tax, that would
decrease the regressive taxes it levies on its reside
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