What’s Your Tax Druthers?

February 15, 2012 at 12:20pm By: Mr. Wilson Posted in The Lincolnite Blog

Which would you rather pay: property tax or sales tax?

Mayor Beutler wants to lower your property tax rate in exchange for raising the sales tax rate by a portion of a cent. A 3 cent deduction in the property tax rate (ten-ish percent) would save the average homeowner about $45 per year and cost the City about $5 million. Meanwhile, a half-cent increase in the sales tax would bring in about $19 million annually.

One of Beutler’s goals with the suggestion is to provide property tax relief, since that’s such a popular refrain among voters. I’m not so sure they meant “provide property tax relief ... while charging me more for everything I buy”, but perhaps I’ve misunderstood them. Voters are pretty goofy, after all. It’s not clear just how much extra a person could be expected to pay under an increased sales tax plan, or how regressive or progressive it would be relative to the property tax. Anybody who buys anything pays sales tax; anybody who owns or rents property pays property tax. Both scenarios cover pert near everyone.

One of the “special projects” that could be funded if extra revenue were generated is the South Beltway. I would argue that the South Beltway should be filed under “mandatory projects” rather than “special projects”, but let’s not get wrapped up in semantics. The point is that we could, hypothetically, find ourselves able to pay for things we aren’t otherwise able to afford. Important, necessary things. I’ll gladly pay a couple extra cents on my weekly Oso Burrito trip if it means making those projects happen.

On the other hand, there are of course no guarantees right now that any extra revenue wouldn’t go toward what might be called in voterspeak “red tape”. I’m not exactly sure what that would look like, but if Lincolnites think that’s what would happen, it would be poison to Beutler’s plan. Perhaps he could pinkie swear that all the projects paid for by the extra revenue would be awesome.

Is the tax swap a good idea in your eyes?

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The Comments

Fletch February 15, 2012 at 3:01pm

No, it’s not a good swap. Clearly in the end, we’ll pay more if they are willing to trade $5 million in revenue for $19 million in revenue.

I think during the time we are paying 2% extra for the arena tax (which I was and still am in favor of), I wouldn’t particularly care for another sales tax increase overall.

Part of the reason I oppose is that I don’t know the city (or county or state or Feds, for that matter) have shown us that they can really be good stewards with our money. If I felt they were truly deep-down doing everything they can to be as lean and mean as possible, and we still fall short, there may be some logic in extra taxation. To me, that’s not the case.

I get tired of the political pandering with property taxes (the Gov is the chief offender of this). I’m a registered R. Some would call me conservative. However, ‘tis silly that we are to believe that of all the things ailing our state, the top thing the Gov hears about is a call to lower property taxes.

These politicians at all levels love to tinker with property taxes so they can run on a platform saying they’ve lowered taxes. In reality, if you lower my taxes, I may save $45 a year, but it’s money that I don’t truly ever feel that I see, and it can be taken right back in a property valuation increase.

If you mailed me a check for the same $45, I’d see that money and do something with it. Not much, ‘cause it’s $45. But you get the idea.

It’s a shell game, and they all seem to want to play it.

foxspit February 15, 2012 at 8:28pm

Well said, Fletch. Property taxes are indeed a shell game. I don’t believe there would be real property tax relief if this bill passed.

More importantly to me, however, is that the sales tax is a regressive tax that burdens the people who can least afford to pay more in taxes.

Errandbug Restaurant Delivery February 17, 2012 at 7:24pm

Absolutely hate the magic tricks our politicians play on us folks.  Any time they somehow magically take a single red scarf from their hand and pull out three red scarfs from their ear…we have to be smart enough to realize they just totally raised our taxes while claiming to lower them.  Higher revenue does not just happen, we are just taxed more from different sources. 

Hey elected officials…how about you just honestly cut some services lets get real about this.  Personally I could live without granite floors in the new schools and public office buildings.  Just saying…we can have tile and be just as pleasing to look at.  And I could do with just 3 actual lights on each pole on 10th street…instead of 8 lights on each pole telling me there is a green light.  That was a waste of cash and I see it every time I drive downtown now.

Just thinkin' February 21, 2012 at 3:06pm

The Arena funding tax is separately noted on my restaurant receipts as the occupation tax. We are tracking how much money the occupation tax is generating and how it is spent. Could we do the same for infrastructure projects? If the City adopts a special sales tax to pay for major infrastructure projects, we could note the tax amount on the receipts, separately track how much money is generated and how it is spent.

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