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A Marginal Tax: The New Franchise Tax In Texas Comment., David A. Vanderhider

St. Mary's Law Journal

Taxation has long been a point of contention for both individuals and businesses. Primarily, taxation serves as a convenient and calculated method of allocating precious resources to areas in need. Although many states use property and income taxes as the preferred methods for funding these programs, Texas has a constitutional restriction on state taxation of individuals’ incomes. This means Texas has largely relied on property and business taxes to fund these programs. In 1991, while trying to avoid unconstitutional taxes on individuals’ incomes, the Texas Legislature adopted a franchise tax which taxed Texas businesses according to their capital. In 2006, …