Proposing a constitutional amendment requiring any increase in a rate of the franchise tax be approved by two-thirds of all the members elected to each house of the legislature.
The bill primarily affects the way franchise tax increases are legislated in Texas. Currently, franchise tax modifications can be made with a simple majority. By shifting to a two-thirds requirement, HJR30 may reduce the likelihood of tax hikes, as it requires broader support within the legislature. This could stabilize tax rates for businesses but may also hinder state revenue generation during times when an increase is deemed necessary by policymakers.
HJR30 proposes a constitutional amendment that mandates any increase in the rate of the franchise tax be approved by a two-thirds majority of all elected members in each house of the Texas legislature. This proposed amendment seeks to add Section 25 to Article VIII of the Texas Constitution, which governs taxation. The introduction of this requirement aims to ensure greater legislative scrutiny and consensus on future increases in the franchise tax, potentially limiting its rise unless a supermajority is obtained.
The key points of contention surrounding HJR30 revolve around its implications for state revenue and the overall economic climate. Supporters argue that the amendment would protect businesses and promote fiscal responsibility by preventing hasty or politically motivated tax raises. Critics, however, may contend that such a high threshold could cripple the state's ability to respond to financial crises or support essential public services. The requirement could stall timely economic adjustments needed during downturns or shifts in economic conditions.