Other Voices

Why Bernie’s plan will not solve income inequality in Texas

Democratic presidential candidate Sen. Bernie Sanders, I-Vt., speaks at a campaign rally Tuesday in Rochester, N.Y.
Democratic presidential candidate Sen. Bernie Sanders, I-Vt., speaks at a campaign rally Tuesday in Rochester, N.Y. AP

Let’s face it, Bernie Sanders almost certainly will not be the 2016 Democratic candidate for president — but his campaign has altered the political discourse of both parties.

Nowhere is this more evident than in the Vermont senator’s focus on the growing income inequality in the United States and on what he views as the “declining middle class.”

As remedy, Sanders offers a number of policy options to improve income equality and strengthen the middle class.

Among these are his call for greater public investment in infrastructure jobs, raising the minimum wage to $15, achieving pay equity for women, ending what he sees as “disastrous” trade policies, and free public education at state colleges and universities.

Many of these reforms, if adopted, probably would impact income inequality in the United States, as Sanders would want.

But even all of them would not resolve the rapidly growing income disparities in Texas, already among the most severe of all the states.

Studies show that among the 50 states Texas ranks seventh-worst in income gap between the rich and poor.

Sam Houston State University economics professor Mark Frank reports that the richest 1 percent of Texas households earned 21.2 percent of Texas income in 2013 and, that same year, almost half of all income (49 percent) was garnered by the richest 10 percent.

Further, this this gap is rapidly widening.

Data show that between the 1970s and the late 1990s, income for the richest fifth of Texas families grew by 33 percent, while that of the poorest fifth grew by just 4 percent.

Many factors account for these disparities in Texas, as they do in all states.

But in Texas a very important contributing factor — and one that would not be touched by Sanders’ plan — is Texas’ significantly regressive taxing policy.

Texas’ tax system has been rated as the country’s fifth-most regressive due to its heavy reliance on property and sales taxes.

Our state is one of the very few not using the generally considered more progressive personal income tax.

As a result, the tax burden in Texas is skewed heavily to fall proportionally greater on lower income groups.

Studies show that Texas’ poorest fifth pays approximately 15.6 percent of their income in state and local taxes, while the richest fifth pays just over 4 percent.

In fact, every income group in Texas pays a higher percentage of total taxes than its percentage of total income, except for the highest income group, where the reverse is true.

In Texas, then, our taxing system has the effect of exacerbating the considerable pre-tax wealth disparity.

The more wealthy are able to shield from the tax man significantly larger proportions of their income than the less wealthy.

None of the policy remedies proposed by Sen. Sanders would “correct” this situation.

Change will come only when Texas and Texans decide it’s time.

Richard L. Cole is a professor in the College of Architecture, Planning and Public Affairs at the University of Texas at Arlington.