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Property/school tax reform

Discussion in 'Issues Around the World' started by Steve, Nov 19, 2002.

  1. Steve

    Steve Is that it, then?

    Pennsylvania, where I live, has a high percentage of retirees on fixed incomes. These are not rich people; most live on Social Security and their only substantial asset is the property they own.

    There is a growing movement in PA to provide property and school tax relief, across the board. Any reduction in tax revenue would be made up in other areas. Typical proposals focus on local income taxes or a statewide increase in the state income tax.

    Ignoring for the moment the incredibly stupid and misinformed reasons why retired persons should no longer pay school taxes, I am concerned that the focus is alternative methods of tax revenue, instead of simply curtailing costs and increasing efficiencies.

    Have such changes in the property/school taxes been made where you live, whether in the U.S. or elsewhere? Have these changes brought about the desired relief? Or are things worse off than they were before?
  2. RRedline

    RRedline Veteran MMember

    Stevent, I am all in favor of replacing property tax with an increased state tax(sales or income). It will be more efficient.

    One thing I never understood is the concept of sending the government an annual tax based on the value of your property. It just doesn't make any sense to me at all. There is also way too much subjectivity involved.

    I actually know a lady in my neighborhood who is having financial trouble. She is in her 70's, and she is recently widowed. She has a very nice home that she and her husband worked all their lives to maintain, but now she can barely afford the taxes.

    Why not just tax people based on either their income and/or what they spend? Just owning property should not be taxable, in my opinion. People who make lots of money pay lots in taxes. People who spend a lot of their money also pay a lot in sales taxes(except for a few states). Why do we need a property tax too?

    And how about that occupational tax, stevent? Is that not the most absurd tax you've ever had to pay? Basically, people in Pennsylvania have to pay a tax each year, and it is based soley on your job title! Whether you earn $15,000 per year ot $50,000 per year, if your job title is "carpenter," you pay the same amount. We are taxed based on what we do and not what we earn. Completely ridiculous.
  3. drslash

    drslash It's all about the beer

    The politicians in my state always talk about property tax reform or relief but nothing happens. Nothing will happen in the foreseeable future due to dropping state tax revenues.

    The school district that I live in is the fastest growing school district in the state. I also pay some of the highest property taxes in the state. On the positive side, the growth in the school enrollment means a corresponding growth in the tax base. I have paid nearly the same actual tax dollars for my property for the last 7 years. Taking inflation in to account and the fact that salaries tend to rise faster than the inflation rate, my property tax bill has gone down slightly over the last 7 years. I find this quite stunning actually but is accounted for by the rapid growth and new home construction in my town. While I may complain about how much I pay, I have no complaints about the education my children are getting. They are 10 and 11 and will be benefited very much by the new school construction that is taking place.

    I would imagine that long-term elderly residents of my town feel the pinch. I also guess that their tax bills haven't grown much either. On the whole, state revenues for our schools are dropping but the growth in my area seems to make up the difference. The student's test scores are above the state average and our state is above the national average.

    I would pay more attention to school reform and property tax reform more closely if I felt we were not getting a good return on our investment or if the taxes were spiraling upward.
  4. Robert Harris

    Robert Harris Passed Away Aug. 19, 2006

    Steevent --

    This is not a new problem. It was a concern in many places as far back as the 1960s, maybe earlier. At that time a lot of places considered, and some adopted, so-called "circuit breaker" programs, where property taxes were adjusted for retirees when the taxes hit a certain percentage of their incomes. I have been away from this stuff for a while and do not recall details, though. Any text book on state and local government finance, or public finance in general, should have a discussion of this kind of program, though.

    Better yet -- find an economist teaching public finance at a local college and seduce him/her into volunteering to help the movement with ideas and arguments. Pro bono, of course. :)

    I would suggest that you drop the "fixed income" piece of the justification for a program, though, or enemies of doing anything will attack you for basing your proposal on a false premise. Old folks on social security are not on fixed incomes, as SS is indexed and adjusted each year to reflect inflation. The pitch should be based on the low level of income many retirees have -- anyone living on social security alone is not in good shape even if benefits do rise modestly each year to maintain purchasing power.
  5. Steve

    Steve Is that it, then?

    Bob, I've never heard of the concept of a "circuit breaker" program before; now that I have, it seems eminently reasonable. I have no desire to see low-income people forced out of home ownership and this would seem to be a decent solution.
  6. tke711

    tke711 Oink Oink Staff Member

    You just summed up my frustration with the local/state/federal governments in one easy sentence.

    Why is it that the default reaction is to find new, and/or creative ways, to increase taxes? Why can't they first look at ways of decreasing spending or increasing efficiencies first?

    Man, I wish my wife and I could live the way the government does. When money get tight, we can just "invent" a new revenue source instead of actually living within our means by cutting the fat out of our lives.

  7. RRedline

    RRedline Veteran MMember

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