The Senate Finance Committee today passed out HB 3, the revised franchise tax bill, 9-4. The dissenting votes were: Sens. Zaffirini, Hinojosa, West and Whitmire. The committee did not entertain amendments on the bill. What this means is that the bill cannot be amended on the Senate floor. Lt. Gov. David Dewhurst told reporters that SB 6 has been filed, which could be used as a vehicle for senators to consider amendments to HB 3.
Ayman al-Zawahiri, bin Laden's chief deputy, called for the elimination of Pervez Musharraf, the Pakistani president, in a new video posted on the internet Friday. In a report from the Daily Telegraph, on the tape Zawahri called for Muslims in Pakistan to rise up and "topple this bribe-taking treacherous criminal". President Musharraf has survived numerous assassination attempts initiated by forces linked to the militant Al-Qu'eda forces. Zawahri also "condemned Arab leaders in Saudi Arabia, Jordan, and Egypt.
This is the lead from a story in the daily yesterday.
Mario Ramírez plans to take a $25,000 hit to his business on Monday. He'll close his 12 taquerías and bakeries in solidarity with his workers, who want to participate in a national action day in support of immigrant rights.
Oh please. Over $9 million annual sales from a dozen taquerias and bakeries? I call BS. This is something the daily wouldn't have accepted so uncritically if it didn't advance their own agenda.
The Daily Telegraph reported this weekend that "Iraqi oil gangs" have stolen billions of dollars worth of oil from Iraq. The article by Jim Muir, reporting from Baghdad, quotes Walid Khadduri, an economics editor of an Arab newspaper, as stating that "smuggling and other rackets in Iraq are costing the country" more than $10 billion dollars a year in "direct losses and missed opportunities: "There is no accountability, no punishment, and it goes all the way to the top--the smuggling gangs are in cahoots with local authorities and politicians because they need protection. There was corruption under Saddam but nowhere near this," Khadduri said.
A ministry report on the problem "says smuggling has created a 'new class of grand mafiosi'," according to the Telegraph story.
The comments of Fed Chairman Ben Bernanke that the Federal Reserve may pause in its interest rate hikes were not good for the dollar. It tumbled to a seven month low vs. the Euro in the wake of Bernanke's remarks. The U.S. currency dropped 1.9 percent in value this week alone. The Fed is expected to raise rates in May to 5 percent; but it may stop at that point, according to the new Fed Chairman. But, that interest rate pause runs the risk of substantially devaluing the dollar in relationship to other currencies. The problem facing Bernanke is that our massive current account deficits depends on investors buying our dollars. As economist Doug Noland points out this week, we have become heavily dependant on foreign central banks (principally Japan and China) buying our dollars: "As buyers of last resort, foreign central bank reserves have ballooned about $1 trillion over the past 18 months. Ominously, this incredible support has only stabilized the dollar's freefall."
Isn't it time we addressed our huge deficit problem?
If you have never heard of petitionsite.com you might like to drop by and sign a petition calling on Dallas DA Bill Hill to prosecute the killer of Mercy the 10 month old puppy to the full extent of the law. The petition already has 2400 signatures.
Let's here it for the home team. Dallas, and now Fort Worth, have the highest gasoline prices in Texas at $2.956 for a gallon of self-service regular. According to AAA that is up 5.7-cents since last week. San Antonio still lags far behind at $2.79. The Energy Capital of the World is catching up though at $2.93. Overall the AAA says the Texas average is $2.892 and the US average is $2.927. That's right, Dallas is now well ahead of the US average. Best advise: stay home and watch the NFL draft.
The Lone Star Foundation commissioned a study on the economic impact of the Perry-Sharp tax proposal. The study was conducted by Dr. Milton Holloway of Resource Economics, Inc. and was released this Thursday in Austin.
The Holloway report maintains that not only does the Perry-Sharp plan benefit individual homeowners but that it also "will stimulate economic growth" because of the "significant reduction in the taxation of capital assets."
Individual homeowners will experience a significant decrease in their property taxes and businesses will face a new margins tax but also experience a major decline in school property taxes and the elimination of the franchise tax.
The Plan will stimulate economic growth both because families will have more after-tax income to spend, and because the shift in tax burden to a more equitable distribution of initial tax burden among industries will spur investment. The significant reduction in the taxation of capital assets in the business community amounts to a significant economic stimulus.
The Holloway study also concludes that the new 1% business tax, which replaces the existing 4.5% franchise tax will not have an "onerous" impact on businesses in Texas as some critics claim: "The margins tax rate is small, however, so the tax burden on any given firm will be small."
Dr. Holloway concludes:
"The final result of the economic effects of the Plan are to expand all major sectors of the economy as the stimulus works its way through the economy."
Dr. Holloway acknowledges that the new business tax system will be more favorable to those companies which fall under the current business tax system in Texas as opposed to those businesses which have "skillfully avoided taxation" up to now:
The analysis also shows that when tax burden calculations are made for various industry classes it is important to recognize that one can not get a tax decrease in situations when no tax is being paid now. That is, the status quo is much of the problem that the Plan is designed to address. One must not just think of tax changes based off of what is now being paid, but also based on what one would have been paying had they not skillfully avoided taxation.
Those loopholes would be closed under the Perry-Sharp plan.
The Holloway study concludes that the net effect of the Perry-Sharp plan is to promote substantial "economic benefits" to the Texas economy:
The Plan will produce the following annual economic growth impacts in the beginning of the period after full implementation:
+ $2.2 Billion
+ $1.6 Billion
+33 Thousand Jobs
Additional State Tax Revenues
Over the first ten years of the Plan these economic benefits will grow to $4.0 billion in GDP, $3.3 in personal income and 40 thousand in employment.
Click here to download the complete Holloway study in PDF format.
The Dallas Business Journal ran a poll on its web site this past week asking its readers the question: "Should Dallas Mayor Laura Miller be re-elected in 2007?" The vote was overwhelmingly against her with 73% of those responding opposed to her re-election. Only 27% favored her re-election. Already, attorney Darrell Jordan and City Councilman Gary Griffeth have announced their intentions to run against her next year.