Prop. #4 Personal Income Tax

Prop. #4 Personal Income Tax

Prop. #4 Personal Income Tax

Proposition 4 (HJR 38) “The constitutional amendment prohibiting the imposition of an individual income tax, including a tax on an individual’s share of partnership and unincorporated association income.”

Explanation

Proposition 4 would prohibit the Texas Legislature from establishing a personal state income tax.

Arguments For 

  • A 2019 poll by the University of Texas at Austin and the Texas Tribune found 71% of respondents oppose an individual state income tax. *
  • Texas has a low-tax, pro-growth approach to economic expansion, and that is dependent on having no personal income tax.
  • This amendment could support population growth in Texas, as families and businesses  may move to Texas because there is no state income tax.
  • An income tax would also increase the size of government by requiring a large bureaucracy to administer it. 

Arguments Against

  • This amendment is not necessary because the Texas Constitution now prohibits the Legislature from imposing an income tax without a statewide referendum (Art. 8, Sec. 24, adopted in 1993). In addition, any net revenue from that tax must be used for the support of education.
  • Revenue from an income tax could reduce the tax burden on businesses, which pay a higher proportion of taxes in Texas than in other states.
  • The current Legislature and today’s voters should not make taxation decisions for future Texans. The needs of Texans change over time, so future Texans should make their own choices on taxation.
  • One reason Texans pay high property and sales taxes may be because Texas has no income tax. If Proposition 4 passed, these taxes would likely continue to increase, so Proposition 4 would not necessarily decrease the size of state government.

For more information: House Research Organization HJR 38