Legislative Messages of Hon. James V. Allred, Governor of Texas 1935-1939 Page: 49 of 263
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companies. That is, I believe it might be a wise policy to calculate the
amount of franchise taxes owned by a corporation in this State upon the
basis of gross assets of the company within the State rather than upon
capital stock which is subject to manipulation.
There are possibly other recommendations which should be made with
reference to the existing franchise laws, but these recommendations I shall
make from time to time by submitting bills to you for your consideration,
or by supplementing this present message.
I also recommend for your consideration a substantial increase in the
inheritance tax rate. There is little justification, whether of economic
right or social policy, for permitting individuals to inherit enormous sums
of money without substantially contributing to a government that has
made possible the accumulation of such wealth, and which guarantees its
continued existence and its passage to posterity. Particularly do I favor
an increase of the inheritance tax in view of the fact that it, perhaps
more than any other levy, enacts revenue from those able to pay.
In fairness to the people I could not conclude any discussion of new
revenue raising measures without reiterating my opposition to a general
sales tax. This issue was fairly and squarely raised in the campaign for
Governor, and the people have already voted upon it. Because of that
issue which was definitely settled in the campaign for the Democratic
nomination for Governor, the Party platform, to which we are pledged,
clearly and unequivocally denounces the general sales tax.
In this message I have pointed out that, in my humble judgment, any
tax measure should be based upon certain fundamentals-the extent of
the services rendered to the government, and the ability of citizens to pay.
A general sales tax includes neither of these principles. It has been
adopted by a number of states merely because they found it an easy way
to raise money in a time of economic distress.
Officials of those states which have passed a general sales tax of necessity
become advocates of a similar measure in other states for the simple
reason that their own state is experiencing one of the inequities necessarily
flowing from a sales tax. A retail sales tax necessarily places a
burden on those who do not live near the border of the state and upon
those whose purchases are so small that they cannot afford to employ
interstate commerce to avoid tax responsibilities. To escape loss of revenues
by interstate purchases, the officials of states which have adopted a
general sales tax are advocating that other states pass similar measures.
Personally, I cannot submit to the high pressure advertising of those
states unfortunate enough to be laboring under the difficulties of the
general sales tax. I cannot submit to a tax that will be borne by people
who, because of their geographical location, are not in a position to escape
payment; or one which will penalize our home merchants and industries.
I cannot advocate a revenue raising law that offers an inducement to the
rich to employ interstate commerce and which, at the same time, penalizes
the small individual buyer.
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Allred, James V. Legislative Messages of Hon. James V. Allred, Governor of Texas 1935-1939, book, 1939; (texashistory.unt.edu/ark:/67531/metapth3899/m1/49/: accessed April 25, 2018), University of North Texas Libraries, The Portal to Texas History, texashistory.unt.edu; .