Mosbacher Institute Takeaway Investigates Texas Franchise Tax

May 23, 2016

Ten years ago the Texas Legislature expanded the state’s franchise tax in an attempt to contribute more state funding to K-12 public education while simultaneously offering property tax relief. In a new issue of The Takeaway, “Giving an ‘F’ to the Franchise Tax: The Texas Franchise Tax Fails to Fund,” Dr. Lori Taylor, an economist and director of the Mosbacher Institute, along with Erica Cottingham and Allison Shea, graduate research assistants and recent graduates of the Bush School of Government and Public Service, Texas A&M University, explain how the Texas franchise tax has failed.

Taylor, Cottingham, and Shea say the tax has failed to generate the predicted revenues every year since its expansion, in part because the tax allows businesses to choose how they will be taxed. The authors also explain that distortions and short comings are inherent in the updated tax and make the argument that abolishing the franchise tax and replacing it with a fairer and more efficient and equitable tax, such as a broader sales tax that includes consumer services, would raise the necessary state revenues without the inefficiencies and inequities of the franchise tax.

“Giving an ‘F’ to the Franchise Tax: The Texas Franchise Tax Fails to Fund” is a publication of the Mosbacher Institute for Trade, Economics, and Public Policy. The full text of the article can be found at

For more information, contact Lori Taylor at 979-458-3015 or .(JavaScript must be enabled to view this email address).

[Return to homepage]

Tags: News / Research /

Follow us!

In the Media

April 16, 2018: "Lebanon’s Precarious Place in the Syria War" U.S. News & World Report

April 09, 2018: "Focus at Four: Homeland security expert on sending the National Guard to the border" KBTX

April 04, 2018: "Policy conference to address Texas water concerns" The Battalion

April 04, 2018: "Oklahoma teacher pay dispute: Does cost of living make a difference?" PolitiFact

April 03, 2018: "The road to a better economic future" Khmer Times

Additional Media

Lastest Bush School News

Mapping the Ugandan Cold Chain

Miss Rev visits the Bush School

Bush School Economist Exposes Groundwater Misconceptions

New I-School Dean Joins the Bush School Faculty

Bush School Students Give Back to Community in 2018 Big Event

Leading with loyalty to self and core values

An Evening with Bayan Sami Abdul Rahman, Kurdistan Regional Government Representative to the United