Maximum Compressed Tax Rate

This is an incredibly important concept yet it is almost never spoken about by our so-called “leaders”. This rate is the maximum rate allowable by law without a vote. This rate is set by Texas Education Agency. If you want to dig, you can find the complete basis therefore here:

• 2024 MCR sheet

• Commissioner’s Rules on School Finance

The documentation is effectively page-after-page of dense legalese. The important parts follow, and as always, a fact checker need only read the links provided to verify what is written herein.

First and foremost, this tax rate does not directly govern the tax rate in any school district. What it does is allow the bureaucratic regime known as TEA to near-silently raise taxes without input from the public. The process is devoid of mandatory inputs and hearings before the voting class. The broad strokes are:

1. School Districts inform TEA of taxable property data end of July

2. TEA computes a rate

3. School Districts may appeal the rate

4. Once a rate is settled a School District is able to raise taxes to that new rate without a vote

5. If the MCR for a district is computed to be less than 90% of the greatest school district in the State, that MCR is increased to equal 90% of the greatest.

6. The TEA Commissioner can ignore the rules however and whenever he wants

That is not a typo: the rules states, “The commissioner of education may waive a provision of this section if necessary to ensure the appropriate MCR calculation.” (See Commissioner’s Rules on School Finance). Effectively, we have a system where school taxes can be artificially inflated through willful ignorance of the rules. The rules state both: that a district must inform TEA of taxable property data and that the Commissioner may waive a rule to expedite the calculation process.

These tax rate increases are given irrespective of outcomes and irrespective of performance. Further, a Voter Approval Tax Rate Election is only necessary if a District would like to increase past this MCR. This is a slight of hand; it is a way for unelected bureaucrats to get a tax rate increase while keeping people feeling like they “won something”. If a District wants to adopt the MCR, it only needs to propose a rate higher than the MCR and let the voters select the MCR instead. Voters feel like they won, and the District gets its pay increase. Everyone’s happy??? Right?

The media, too, are not our friends in this struggle to keep what we earn. The media loves the phrase “increasing district revenue” when they mean “siphoning hard-earned money from the public”. Do not be fooled; we are moving backward into a pseudo-slavery situation as a society.

Slavery is a process whereby the people do the work, and the spoils go to the intelligencia and the gentry. In slavery, the keepers of the spoils tell the slaves that all needs have been met, so none should be upset. This is the picture of taxation albeit more extreme. Taxation is a process whereby the people do the work, and a portion of the spoils go to the intelligencia and the gentry. In taxation, the media in conjunction with the intelligencia and gentry tell the public that we have roads, parks, and schools, so none should be upset. How does paying a superintendent 10 times what a teacher makes helping anyone? How does inflating bureaucrats’ salaries artificially while children continue to underperform in reading and mathematics help anyone?

The picture painted by the MCR is not a good one. It reaks of bureaucratic self-aggrandizement and voter ignorance. Get informed, get out, and get voting. Our salaries, lives, and children’s futures depend upon it.

Tax Hikes

Taxes are a large part of American life. For most households, the top two expenditures are housing (rent/mortgage) and taxes. There is no larger bill. Some of these taxes are straightforward, such as income tax; some are not, such as capital gains, property, estate, etcetera…

What is clear is that the Tax Cuts and Jobs Act (made effective by the Trump Administration on January 1, 2018) lowered the tax bill for all Americans, and Biden has stated he will not renew it. Biden has also promised that anyone making $400,000/yr or less would not pay a penny more in taxes. These two ideals are incompatible. One cannot dispose of a tax cut for people making $25,000/yr and not raise taxes on those individuals; this makes no sense.

Now, Biden is threatening to raise taxes for a large portion of Americans making under $400,000/yr again. Biden has proposed an increase to the capital gains tax. Luckily, only Congress has the power to tax, not the Executive branch, but with all the Biden rubber-stampers in Congress, this is not a cause to abandon.

When capital gains tax increases, the burden falls to the middle class, the elderly, and our children to pay for it. Capital gains tax is assessed in situations involving the sale or exchange of:

• A home

• stocks

• bonds

• ETFs

• crypto

• And many more

While a change in this rate impacts nearly all Americans, it dramatically affects one of our most vulnerable populations: the elderly. When working with a financial advisor, usually a plan is set forth with a mixture of cash, non-taxable assets, and capital assets subject to capital gains. Altogether, this is referred to colloquially as a “nest egg”.

If the tax burden of a withdrawal from your nest egg, the amount you need to accumulate therein increases as well. For example, say you planned to retire on $8,500 per month. Assuming a growth rate of 3% and a capital gains tax of 15% one would need $4M in their nest egg to hit this number (this is highly dependent upon how long they have been saving and what the asset mix is, for the sake of brevity, we will say the entire value at retirement is principal invested in the capital markets).

Now, under the same conditions, if the capital gains rate would be 20%, the number goes up to $4.25M. Again, at a capital gains rate of 30%, we would have $4.86M. The capital gains tax determines how easily an American can retire without becoming reliant upon the Government.

This is why it is crucial to fight against these tax hikes. A tax hike causes We, the People, to become more impoverished. A more impoverished people is more reliant upon its Government. A more reliant people is more subjugated. We do not bite the hand that feeds us, after all.