Tuesday, August 14, 2007

Property Tax "Reform" = Increased Taxes

Today's editorial in the JG brings up a valid concern about business vs homeowners in the property tax debate. The concern is that nobody is really discussing what a shift in the property tax to an income tax will actually do to the average homeowner's bill.
If their (businesses) taxes are lowered or eliminated, someone will make up the difference. Under many of the discussions so far, the burden would fall to wage earners through income taxes and consumers through sales taxes.

This is a point I've been trying to make for weeks now - namely that the tax burden isn't going down so all this "reform" is going to do is shift the burden from one group to another. And the people leading this debate need to be honest about what's going to happen to your bill. For example, the city council has the opportunity to vote on whether or not to raise the county option income tax by 1% to offset some of the property tax. However, part of the debate centers around whether or not we give the tax relief to homeowners only or to businesses as well.

This needs to be very, very clear. If the city council votes to extend the "relief" to homeowners and businesses then nearly every homeowner with a job will pay increased taxes. In fact even if they only extend the relief to homeowners many will STILL pay an increase in taxes.

I've said this before but it's worth repeating - only a sucker votes for a revenue neutral tax because you will always pay an increase in taxes in the long run. The city council should NOT adopt the increase COIT and wait to see what happens with long-term reform at the state level...

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