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

November 11, 2017: "Texas A&M to host panel focusing on future of NAFTA" The Eagle

November 09, 2017: "International organization talks globalization" The Battalion

November 09, 2017: "Experts discuss Iran nuclear deal as part of 'What's Next?' series at Texas A&M" The Eagle

November 07, 2017: "Texas church shooting: The latest in line of deadly attacks" Corpus Christi Caller Times

November 07, 2017: "Learn from the past, says winner of McLane business award" The Eagle

Additional Media

Lastest Bush School News

Respect, Not Just a State of Mind

Scowcroft Institute Policy Paper Analyzes Chinese Reluctance to Take Action Toward North Korea

Bush School’s Online Executive Master’s Program Ranked Seventh in the Nation

Robertson Foundation Names Four Bush School Students as 2019 Fellows

Texas A&M Bush School To Host Symposium On Women, Peace, And Security

NAFTA 2.017: Strengths, Weaknesses and Ways Forward

US State Department Official to Speak on Humanitarian Aid in Syria