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Tax Burden and Benefits Should be Mirror Images

posted in: Weekly Commentary 0
By Lowell L. Kalapa

Getting something for nothing or for free is the hook sales people and politicians like to promote as part of their modus operandi.
After all, who doesn’t like getting something for free? People enter contests, fill out entry blanks, stand in line in hopes that they can get something for free. And that is what many elected officials would like you to believe. At the county level, administrators and council officials are in the midst of the budget process and in most counties, those officials are promising even more services and new facilities while pandering to the idea that real property tax rates can be reduced, especially for homeowners.
What they don’t seem to talk about is that there are new fees or they have juggled the books to push debt payments even farther out into the future so that they can have more cash now and let a future council worry about the mortgage payments. Hey! How can you argue against such a proposition, constituents can have more services or a new park while seeing their property tax bill shrink.
Even at the state level, the same shell game is a favorite of lawmakers, promising all sorts of tax breaks and tax cuts while upping the amount needed for the state budget. From tax credits for this to exemptions for that, lawmakers seemed to be on a binge of tax cuts for every constituency they could possibly imagine. However, when the cold hard reality hit them in the face in the closing days of session, they realized there was no more money in the pot to make all the tax incentives happen.
Back at the county level, the talk is of lowering real property tax rates for homeowners which of course happens to be the largest block of voters. And what about lowering the tax rates for all classes of property? Hey, businesses don’t vote, besides they can pass the cost of the real property tax onto their customers unlike homeowners who are just stuck paying the property tax. Homeowners, reason elected officials, can’t pass the tax on to someone else.
Well, the problem with that logic is that – guess who are the customers of the businesses that can pass on the burden of the real property tax? It is the homeowners – in the cost of the bag of rice and the rubber slippers and the can of Spam.
So instead of the majority of real property taxpayers getting upset because property tax rates have to be raised to pay for more services and more facilities, those homeowners get angry with the businesses which they patronize because the cost of the bag rice and the can of Spam is higher than last year. Now it is the grocer or the department store owner who takes it on the chin because prices are higher, not the county official who has lowered the tax rate on residential homeowners while keeping the higher rates on nonresidential properties.
So if local county officials truly want to provide more services and modern facilities, they ought to be honest with the real property taxpayer and tell them just what it is going to cost for more services and more buildings. Set a single tax rate for all categories of properties and then let’s see if those elected officials will be willing to fund this or that program or project.
When it comes time to tell the voter that the cost of living is higher in this county because the property tax burden was shifted to people who can pass the cost of the tax along to their customers, let’s see what voters think of that kind of shell game. The charade is over, the time has come to tell voters and taxpayers exactly what it costs to run county government. Reducing real property tax rates on homeowners while keeping a tax rate nearly double that rate on nonresidential property just is not very honest.
The tax burden on real property taxpayers should mirror the cost of the programs and facilities that are being promised. Shifting the tax burden to another class of property merely hides the accountability for those programs or projects. Shifting the property tax burden to another class of property merely hides the true cost of county or local government. Local government officials need to be more honest with their constituents as to just who pays for those programs and projects.

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