Who Pays in Texas When the Bills Come Due
$16,752. This is not a down payment on a home purchase or the cost of a used car with low miles. This is the recent electric bill charged to the credit card of Scott Willoughby, a retired Army veteran living in a Dallas suburb. As if the energy blackouts and water failures resulting from last week’s catastrophic winter storm weren’t enough for Texans to endure, now many who were fortunate enough to maintain power are being buried in sky-high electric bills.
This winter storm and subsequent avalanche of infrastructure failures are emblematic of a larger failed governing approach that too often leaves those who can least afford to pay stuck with the bill.
Who Pays?, a comprehensive report from the Institute on Taxation and Economic Policy (ITEP), analyzes the tax systems of all 50 states and the District of Columbia. Texas has the second most regressive tax structure in the nation. The top 1 percent of households pay an average effective tax rate of 3.1 percent, while the poorest 20 percent pay an average effective rate of 13 percent. Texas’s claim of being a low-tax state is only true for the richest Texans while the rest are left to pay a much higher share of their income in taxes.
Politicians who support low taxes, small government and deregulation claim that this approach best serves the public but last week’s debacle shows why it doesn’t. Texas’s disdain for federal government oversight is why most of the state relies on an isolated energy grid that could not tap into the Eastern or Western interstate grids for additional power. Its fawning acquiescence to corporate interests and parroting of free-market policies is why 10 years after the last major energy crisis revealed opportunities to guard against a meltdown, the Texas Legislature did nothing. After all, if it gets too cold in your house, you can just take a trip to Cancun. What’s the big deal?
As evidenced by their regressive tax policies and laissez-faire attitude, too many Texas policymakers think if the wealthy are okay, everything is okay. Everything is not okay. Not for the Texans who lost power and are still without water, and not for those who consider themselves fortunate to “only” have electric bills in the single-digit thousands of dollars this month. They are likely not taking any solace in the pithy slogan, “Everything is bigger in Texas,” meant for steaks and not surprise utility bills resulting from a colossal failure of government. But if officials in the state really want to do right by their residents, they’ll beef up government, regulation and tax policies to create a more equitable and secure Lone Star State.
