I would LOVE to see property taxes reduced or eliminated. I would HATE to see it replaced by an income tax and that is 100% certain to happen. It won't happen immediately if property taxes are cut or eliminated, but those reductions will be used at some point in the future to argue that we need an income tax to make up for lost revenue.
I don't believe one bit of Dr. Laffer's "report" but even he admits the new state sales tax rate would be between 11% and 15.7%. Remember also that the state sales tax rate is 6.25% and local governments can and usually do add 2%. I see no mention of reducing or eliminating the local government "add-on" so Dr. Laffer is talking about an increase between in the state portion alone of somewhere between 4.75% and 9.45%. That's a percentage change between 176% to 251% and we'll still be paying the 2% local sales tax. That level of sales tax will make Texas products far less attractive for out-of-state buyers, so even if lower property taxes would attract businesses to Texas, the poorer market share would discourage moving to Texas. Plus, companies are going to have to pay the same very high sales tax and this discourages moving to Texas. (Companies will have to pass along these costs to consumers, thus further raising the price of goods produced in Texas.) Companies are often granted property tax reduction/relief as an inducement to move to Texas or open facilities here. If you really want to attract more business, repeal the margin tax. It's nothing more than a disguised income tax for businesses.
Do a quick and dirty test to see if Dr. Laffer's numbers pass the smell test. For me they don't. If I divide my current property tax burden by the current state property tax rate of 6.25%, I get a figure that represents the amount of taxable spending I would have to do each year just to keep state revenue at current levels. At the current rate, I don't spend enough for the State to even break even, nor do I even with a 176% tax increase to 11%. I might (emphasis on the "might") spend that much if we raised sales taxes by 251% to the 15.7% rate proposed by Dr. Laffer, but a large percentage of the population can't or won't. This means lower overall revenue and the perceived need to generate revenue from other sources to maintain current spending levels. If you eliminate state property taxes, then the only other revenue source will be a state income tax because you can't raise fees enough to fill the gap. If state property taxes had not been eliminated but merely reduced (even dramatically), then the shortfall will be replaced by increasing state property taxes. In the end, we will have gone from relatively high property taxes, through a period of low or no state property taxes but grossly high state sales taxes, to a system with grossly high sales taxes and either a state income tax or a return to high property taxes.
The other problem with sales tax revenue is that it relies heavily upon discretionary spending by a large segment of the population. People will do everything they can to make significant purchases in other states, or over the Internet. (Yes, Texas claims a right to sales taxes on Internet purchases, but many companies don't care and don't charge tax.) So what happens when Dr. Laffer's 176% to 251% results in lower revenues, potentially much lower? Politicians will have an excuse to push for what many have wanted for years, but were afraid to bring up -- state income tax. We have recently discussed the changing demographics in Texas and the resistance to a state income tax will wane as time passes. It's easy to snooker lower income voters by initially setting a "0 tax floor" at an income level that will mean most of them will not pay any state income tax, leaving it to be paid only by the people who are perceived to be "rich." Of course, that won't work either and the relatively low initial state income tax rate will increase just as the federal income tax rate has risen.
If we have to pay $X in taxes, it does us no good to change the name on the tax if we still have to pay $X. In all likelihood, we'd be paying $X+ in total taxes under various titles, making so-called tax relief a lie. This isn't rocket science; if the government spends $100 it has to collect $100 and the title on the tax bill is irrelevant.
I want a lower tax burden overall. The only way to do this is to reduce state spending and that means making some tough decisions on cutting services. I don't know the exact percentage of state spending that goes to "education" but it's huge. While cutting silly, unproductive expenses is prudent, it doesn't amount to significantly reduced spending. Infrastructure expenditures must continue and it should be at an increasing rate as roads, bridges, etc. age. So like it or not, that leaves education. Like I said, these are tough decisions, but there really is no tooth fairy.