SHERLOCK: The Texas paradox
SCENE: HIGH-RISE APARTMENT OVERLOOKING DOWNTOWN HOUSTON - LATE EVENING
The spacious apartment features floor-to-ceiling windows with Houston's illuminated skyline visible. Energy company headquarters and bank towers dominate the view. SHERLOCK stands by the window, restlessly observing the city while WATSON sits on a leather couch, scrolling through financial news on his tablet.
WATSON: (looking up, frustrated) Sherlock, have you seen these figures? Texas has one of the highest inequality rates in the nation, and yet another Houston oil executive just paid a lower tax rate than their administrative assistant.
SHERLOCK: (still watching the skyline) The Texas paradox, John. A state that prides itself on rugged individualism while maintaining one of the most sophisticated systems of wealth protection in America. (gestures to the energy towers) Those buildings aren't just offices – they're monuments to tax engineering.
WATSON: (sets tablet down) I don't follow.
SHERLOCK: (turns sharply, suddenly animated) Look at the evidence, John! (moves to a digital map of Houston displayed on a wall screen) Houston – energy capital of America, fourth largest city, home to twenty-four billionaires and counting. (taps screen, highlighting certain areas) River Oaks, The Woodlands, Memorial – enclaves where property taxes fund exceptional schools while neighboring districts struggle.
WATSON: (sarcastically) So rich neighborhoods have better schools. Hardly breaking news.
SHERLOCK: (ignoring the sarcasm) Not just better schools, John – better everything. (rapid-fire delivery) Texas has no state income tax, which sounds egalitarian until you realize it disproportionately benefits high earners. Meanwhile, the state relies heavily on property and sales taxes – both regressive, meaning they take a larger percentage from lower incomes.
WATSON: (interested now) Wait, so the tax structure itself favors the wealthy?
SHERLOCK: (pacing energetically) Precisely! Take a Texas oil executive earning $10 million. Much of that comes as capital gains, taxed federally at just 20% compared to up to 37% for regular income. (grabs a marker, writes figures on a glass board) Add in the carried interest loophole – allowing private equity and hedge fund managers to classify income as capital gains – and effective rates plummet further.
WATSON: (stands up) But surely they pay higher property taxes on those mansions in River Oaks?
SHERLOCK: (smiles knowingly) Ah, but there you encounter another layer of the puzzle. (draws diagram) Wealthy homeowners routinely challenge their property assessments, hiring specialized firms to appeal valuations. Studies show homes above $1 million are under-assessed by an average of 10%. Meanwhile, modest homes in East Houston? Over-assessed.
WATSON: (pacing now himself) So they're paying less than their fair share while ordinary Houstonians pay more?
SHERLOCK: (nods) And that's just the beginning. (grabs tablet, pulls up offshore structure diagram) Texas's business-friendly regulations make it particularly compatible with offshore structures. (shows complex chart) Houston energy company profits flow through subsidiaries in Delaware, then to holding companies in Nevada, ultimately reaching trusts in the Cayman Islands.
WATSON: (confused) Is that... legal?
SHERLOCK: (with intensity) That's the brilliant part! It exists in the gray area deliberately created through decades of lobbying. Since 2010, the top 1% in America have spent over $2 billion on lobbying efforts. Not random spending – targeted investments with exceptional returns.
WATSON: (sits again, troubled) But how does this affect ordinary Texans?
SHERLOCK: (becomes still, speaks more deliberately) Every dollar sheltered is a dollar removed from public services. Texas ranks 43rd in education spending per pupil. Its infrastructure grades are D+. Its uninsured rate is highest in the nation. (points out window to different areas of Houston) Medical Center excellence for some, healthcare deserts for others.
WATSON: (genuinely curious) So what's the solution? Texas prides itself on low taxes.
SHERLOCK: (picks up a chess piece from a nearby board) That's where the conversation is deliberately misdirected. (holds up piece) It's not about higher taxes versus lower taxes. It's about equal application of existing laws. (sets down piece) The IRS admits it audits the working poor at roughly the same rate as the top 1% – not because of equal noncompliance, but because complex returns of the wealthy require more resources to investigate.
WATSON: (surprised) They audit poor people at the same rate?
SHERLOCK: (nods) The EITC claim of a Houston janitor earning $18,000 is more likely to be scrutinized than the offshore structure of an energy executive. Why? The janitor can't afford to fight back. (walks to window again) Look there – the JPMorgan Chase Tower. Their executives saved millions through perfectly legal tax strategies designed by armies of accountants and lawyers.
WATSON: (frustrated) How does anyone compete with that?
SHERLOCK: (turns, with slight smile) By understanding the system better than they do. (moves to laptop) Texas campaign finance disclosures reveal interesting patterns between tax legislation and donor activities. (typing rapidly) Three Houston billionaires made identical donations to key committee members just before a critical tax vote.
WATSON: (leaning forward) You think there's corruption?
SHERLOCK: (without looking up) I think there's a case study unfolding right before us. (shows screen) The same week the Texas legislature killed a proposed oil windfall profits tax, seven executives purchased property in the same exclusive Galveston Bay development through anonymous LLCs. Coincidence?
WATSON: (standing again) So what do we do with this information?
SHERLOCK: (with sudden intensity) Knowledge is leverage, John. (closes laptop) The system isn't broken – it's working exactly as designed. But designs can be improved once people understand the blueprint. (phone buzzes) Ah, that'll be Lieutenant Garcia from Houston PD's financial crimes unit. (enigmatic smile) The game, John, is about to change.
WATSON watches as SHERLOCK answers his phone, the Houston skyline glittering behind him, energy company logos illuminated against the night sky.
END SCENE