In Texas, taxation screws the poor by design

data=5xml5PCFtXsYrotv0oAK7oymp1D8PwX6jjHtTSb_CrjbcqxuMNmDmiSrULzkAIxYckVvx-MEr45HrlOT5cSObt8slb33QGGi7olz_r_MG0eU7L7Vu1agh-hkkFyOhJQN_H1RmyvSXHFG7gXLgiNu_S8AR8a6OUwjKoCSZtnIeFZfpHeN_Mm1AI_oRWeKCSy2ai0zClv6o2d5YCDzB09cVAThere are endless problems with the I-45 expansion boondoggle in Houston – such as locking the region into more unsustainable road dependence in exchange for short-lived mobility improvements – but one particular thing it’s brought attention to the impact on Independence Heights – the first black city in Texas, now a Houston neighborhood. Of course Independence Heights was already in danger.

Today, Independence Heights is on the cusp of the same kind of transformation that has stripped away much of the historic character of many of Houston’s older neighborhoods since the 1980s, even as it has brought new investment welcomed by some community leaders. The Houston precedent is clear: Freedmen’s Town, west of downtown in the Fourth Ward, is nearly gone except for the street layout, a park with remnants of a church and bricks handmade by former slaves that residents had to fight to keep intact.

In Independence Heights, wrecking crews are tearing down old houses to make way for townhouses that feel like an extension of the long-gentrified Heights to the south. Skyrocketing property taxes are forcing out longtime families. The potential razing of more houses to expand Interstate 45, combined with heightened interest from developers, is accelerating the transformation.

The pressures facing Independence Heights are not unique, with the highway project adding a bitter twist. And even that’s not unique – in the mid 20th century freeway building was designed to eliminate black neighborhoods as a “side benefit” of the infrastructure investment.

One thing that these gentrification stories make clear, though, is the insanity of taxation in Texas. Texas does not have an income tax, and in fact such a tax is forbidden by the state constitution. Texans are quite proud of this, as well as having low taxes in general. Except… it’s actually very bad for us.

One of the drivers of gentrification in neighborhoods like Independence Heights is property taxes. Because, strangely, you can’t get things for nothing, we pay for our no-income-tax approach with extremely high property taxes. These are a disaster for anybody on a fixed income (such as retirees) – even if they own their homes outright, the tax bills can quickly outgrow their means, and then there’s really no choice but to sell. Even with homesteading, taxes go up 10% per year, and that adds up very quickly.

This is couples with every kind of regressive tax you can imagine. Here in Houston we match our high property taxes with high sales taxes. Basically the more regressive a tax, the more we like it here. And of course this means the pain of paying taxes falls most heavily on the people with the least, which I think is also how Texas Republicans who’ve had a stranglehold on state government for years like it.

I did the math a while back. I came here from Washington DC, with it’s 9.5% income tax at the time. I owned a home there, I own a home here. My income is significantly higher now than it was when I lived in DC, and guess what? Last time I checked I was paying about the same portion of my income in combined taxes as I was in DC. So much for low-tax Texas.

That’s fine for me; I can afford it. That’s not so fine for some of my neighbors, and may not be so fine for me when I’m retired.

The article briefly mentions a proposal to help address this:

Debose and community leaders are working with state legislators to develop a heritage tax exemption to prevent displacement: If a family has owned a house for 50 years and a descendant is still living there, taxes don’t increase.

The devil is in the details, but in general, this seems like a really good approach to help maintain continuity in neighborhoods even while they are changing (which they still will).

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