TPA President David Williams Testimony for TX State Senate Committee on Business and Commerce

David Williams

March 19, 2019

Texas State Senate
Senate Committee on Business and Commerce
March 19, 2019
David Williams, President, Taxpayers Protection Alliance

Good morning, my name is David Williams, president of the Taxpayers Protection Alliance. I speak before the Senate Committee on Business and Commerce today to urge lawmakers to support SB 1152, which would end double taxation of telecommunications and keep Texas competitive and allow job creators to keep doing what they do best…create jobs.

The Taxpayers Protection Alliance looks to Texas as a model for pro-growth tax reform that makes the state a magnet for people and businesses across the country.

Texas is one of only 7 states without an income tax. That’s a big reason why, on net, more than 50,000 people moved to Texas in 2017 from other states such as California and New York. The Lone Star State’s policies are drawing people in that are tired of tax-and-spend states that are drowning in sky-high costs. Texas is an example of tax competition working.

Texas has also convinced the country that it’s open for business, welcoming companies from across the country to relocate to booming cities across the state.

But unfortunately, some taxes are bigger in Texas. The state’s telecom taxes are far higher than they need to be, and double-taxation might make residents second-guess their decision to move to Texas.

Lines installed by telecom providers allow Texas residents to make calls and watch their favorite shows, but state policies have made these lines more expensive than they need to be. These lines can’t be installed without telecom providers paying the city for the right-of-way. But under current policy, these providers have to pay twice for that same right of way if both phone and video services are being passed through the same line. Cable providers have to pay 6 percent of their revenues for the privilege of bringing TV to residents, on top of whatever voice service fees the Texas Public Utility Commission finds is fair.

The costs of this double tax add up quickly for providers, and consumers are the ones that lose out in the end because of higher prices. A double-dip tax on phone and cable hits the working poor the hardest and causes unnecessary suffering at a time when prices for other necessities are going up.

The Texas Legislature must act to stop the double-taxation of these services, and lower costs for millions of residents across the state. Fortunately, the Bill before you today would ensure that providers don’t have to pay twice for using the same line. The current system would be replaced with one fee, which would mean fewer costs passed along to consumers. With this reform, Texas can keep and expand its reputation as a low-cost state that’s open for business. Texas has a bright future ahead of it and passing SB 1152 will lead to even more shared growth and prosperity.