Property taxes and alternatives

– a citizen discussion forum which began with this article.

PO Mom:

I’m not convinced on the property tax resolution. Milton Friedman was an advocate of using property taxes to pay for our needed services as it is the only tax that is not consumer driven. TPPF (Heflin/Laffer) have done research and the paper Heflin wrote was done using numbers from 2002-2004 in Texas and having a 14.5% consumption tax to rid ourselves of a property tax. There are some issues…

I’m no economist so are Laffer & Friedman of the same thought process in economics? I don’t know but if they differ than I’d like an understudy of Friedman to agree or state the ramifications of the action.

The economic landscape of Texas in 2002-2004 was much different from today….can it still be done at a 14.5% consumption rate? What expansion will occur to drop the rate to 9%? How will that effect small business owners with 3-5 year contracts and fixed rates? What happens if there is a short-fall…state income tax…NOOOOO!?!

If the issue is radical judges seizing property and eminent domain than would the better solution be to shore up the current legislation to favor the property owner? OR If all economists agree that we can rid ourselves of property taxes then is this the first baby step in elimination of the IRS?

This issue while it sounds great on the surface who really knows if it is a good idea….I’m not willing to spit in the face of Milton Friedman until more questions are answered.

Texas Ranger:

My personal opinion of the property tax is that it prevents true ownership of property. If the ‘state’ (generically) requires tribute from you each year, or they take away your property, then you don’t really own it, do you?

The state’s rent interest supersedes your deed interest.

I would rather not talk about how much some other area must be taxed to make up what is paid in property taxes, but would rather talk about what local services should be provided and how they should be paid for. I understand your point Heather, but property taxes are antithetical to property rights (apologies to Friedman).

PO Mom:

I understand, but I’ve been told that we should be prepared to defend and fight for our resolutions. It is rather difficult to be successful in a fight with out being able to supply a plan. Would the better course be to advocate for property ownership rights that supersede any taxing entity? or To advocate for a fair tax system? Until a detailed plan is laid out in regards to eliminating property tax to advocate for such could do more harm than good. In advocating for the elimination of property tax we would be advocating:

1. take the control away from local entities and giving it to the state….

2. a consumption tax rate of 14.5% puts Texas at a HUGE disadvantage to other states and will kill sales in Texas as everyone shops across our borders.

3. if a shortfall occurs implementing a state income tax will have to happen

[...]

If I’m wrong you can all tell me “Told you so”…. hahaha!

(from the sideline) Bargain Citizen:

Drastically reduce spending. Encourage giving and charity. Make it easy. Personal responsibility. Natural law and selection. Eliminate entitlements. Look at the founders principles. It all goes back to the basics.

Texas Ranger:

Why does it have to be a huge consumption tax? Why can’t schools be paid annually by parents with children in attendance (tuition) and all other services be covered by an increase in gas taxes and a county level sales tax? I am not ADVOCATING for any of these…but there are alternatives to property taxes.

Now, on the school tuition idea…this would remove the government imperative for children to go to government schools. Private schools and religious schools with much better result/$ would be competitive, and the monopoly that the government has on schooling would go away. Costs would go down. Teacher’s Unions would be de-fanged or eliminated.

I’m just sayin…

PO Mom:

TR, we don’t disagree on the end result as you are absolutely correct in your logic and desire to end property taxes. Your logic is right on target and you are willing to far more bold in your approach.

Thanks for making me look like the wimp afraid to slay the tax dragon…

I want to get rid of all taxes and move to a Fair Tax! The few articles I’ve read by the Hoover Institute spell out eliminating corporate taxes and moving to a flat tax system, and Stephen Moore says eliminate property taxes to move to a fair tax. Is the step to reach a fair tax via a flat corporate tax first, or via elimination of property taxes? This seems to be the two thought sets…but who is right?

We are both after the same thing we differ on how large the steps should be. It has taken decades for libs to encroach more and more on our freedoms and we will not take them back easily or in large chunks. Large chunks for Obama have been his demise. The same will be true for conservatives if we try to take HUGE chunks in 2010-2012 then guess what come 2012-2014 conservatives will be tossed out of DC on their bums. Is the elimination of property tax in one fell swoop to large a chunk…I think it may be without more info.

This is why I hate politics…it is a game and each move is critical and must be thought out. Like it or not that is the process and the process doesn’t change overnight but will take years to set straight in hard fought strategic & targeted moves.

Your approach is logical and makes sense to core conservatives but if the move is enacted prior to the plan…

we may lose and that risk is too great for me. You are more willing to take that chance and if it works out the pay-off is HUGE, but if it fails are you willing to live with the consequence?

Don’t forget the majority of the property tax $$ goes to unions….in fact one of the biggest teachers….we have to weaken them with a pawn before the Queen can enter.

Either way we do agree…you are just willing to take a much bolder path.