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Monday was the last day to pay local property taxes without penalties in Texas.

If Republican candidate for governor Debra Medina had her way, there would never be a deadline.

She would try to end property taxes and replace them with a higher and broader-based general sales tax.

Asked at the Belo Debate Friday night how she would close the state's budget gap, Medina said her plan is to restructure taxes.

Eliminate property tax in Texas; raise the revenue that government needs with a sales tax, with a consumption tax instead, she said.

Medina cites a study by the Texas Public Policy Foundation that claims if the sales tax base were doubled and all real estate deals included, the rate would be 9 percent to replace property taxes.

Currently the state sales tax is 6.25 percent; local governments can add another 2 percent to the total.

But a group advocating for middle and low-income families says a higher sales tax would hit them hardest.

Figures from the Texas Comptroller's office show that wealthier families (those earning more than $117,899 a year) currently pay 1.7 percent of their total income in sales taxes. That compares to families earning less than $27,088 who pay 5.4 percent.

Dick Lavine, of the Center for Public Policy Priorities, says the regressive tilt would hurt families financially. You'd have to tax health care services, you'd have to tax day care services and barbers and funerals, he said. All sorts of necessities of life that right now are tax-free would be subject to the sales tax.

Lavine says property taxes are less volatile.

Medina says her plan would still exempt food and drugs from the sales tax, but Lavine said that ignores the impact on other products.

It would make Texas businesses totally uncompetitive, he said. People would be buying on the Internet, people would be driving out of state to buy things. It would really hurt the economy.

In 1997, then Rep. Talmadge Heflin (R-Houston) led some Republican lawmakers who tried to swap out the property tax for a sales tax that would have been capped at 11 percent. Their effort failed.

Heflin is now at the Texas Public Policy Foundation that arranged for the study Medina relies on.

Medina thinks it should be tried again as a matter of personal liberty. We've got to understand that private property ownership is an essential element of freedom, she said.

E-mail bwatson@wfaa.com

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