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11/21/2008
A new line on your property tax bills
In one of the time-honored traditions of the holiday season, we’ll all be getting our tax bills sometime in the weeks between Thanksgiving and Christmas. Can’t wait…
Look for a new line on those tax bills – the “First Dollar Credit” – one more creative way Wisconsin’s complex tax dance will play out – and advertised as “more progressive” to boot. Can’t beat that, especially in Wisconsin.
The Wisconsin Taxpayers Alliance, in a fact-filled study in 2003, attempts to explain the multiple factors that have led to – and make – Wisconsin a high tax state. It’s a fascinating read if you have nothing else to do for a couple hours in front of a warm fire some evening. (Well, I suppose you have to be a policy wonk to call it fascinating – but it surely is interesting.)
One of the several explanations advanced for high taxes in Wisconsin is an ‘increased reliance on state taxes to fund local services.” I call it “3rd Party Pay.” As the WISTAX report says (p. 32):
If citizens perceive local taxes to be too high, they will protest to state and local government officials. The gap between state taxing and local spending allows public officials to place at least part of the blame on each other. Local officials can claim that state aids have not kept up with the costs of dual-funded programs, thus placing a larger burden on property taxpayers. State officials can deflect the blame for high taxes to local governments, maintaining that, despite a large portion of state tax dollars being returned to local governments, local taxes are high because local governments are spending more. Over and over again, we taxpayers have called on the state (why not in your own backyard instead of in Madison?) to reduce property taxes, hence the School Levy Tax Credit, the Lottery and Gaming Credit and now brand new and created by Governor Doyle specially for his 2007-09 budget, the First Dollar Credit. Very complex stuff, and causing county Treasurer’s throughout the state to pull their hair out, having to figure out how to do this huge calculation in the first place, waiting for critical numbers from the state and having to fit one more line on your tax bill. What a mess.
The whole purpose of this brand new First Dollar Credit business is to chip away at progressivity. As described by the Wisconsin Council on Children and Families (WCCF),
In some respects [the First Dollar Credit] is similar to the existing school levy credit, but [it] uses a more equitable formula for distributing the tax relief. When the state allocates funds for the School Levy Credit – currently $593 million per year –each person’s share is in proportion to the value of their property. As a result, the owner of a $600,000 home gets a credit that is four times as large as the credit for a $150,000 home in the same community. …. [But] for the new First Dollar Credit each homeowner would receive the same amount – about $48. The [Republican] Assembly budget … result[s in] an increased commitment to property tax relief in the next biennium that helps the more affluent, but doesn’t do anything to make the credit more progressive. [Added emphases are mine.] Well, you decide what “more equitable” is and you decide the bias of the WCCF. So the School Levy Credit is about $600 million and this brand new First Dollar Credit, is comparatively small potatoes, coming in at $75 million in the final budget. The point is it’s one more critical change in the way we do business in Wisconsin. Less property tax relief based on the value of your property, and more based on everybody-deserves-the-same.
Jo Egelhoff, FoxPolitics.net
COMMENTS
To your last question, *doesn't* everybody deserve the same?
You're talking about the haves and have mores here and expecting the have mores to
pay the same as the haves.
Like Thomas Frank says, it does no good to tell the Republicans, "For God's sake, just please stop."
But I'll make the attempt anyway. This isn't even tortured logic which the Republicans have
become expert at in taxes and, well, real torture as well. It's just plain wrong.
As with the failure of Social Security to be based on income over $107,000 (or whatever) lack
of attention to means to pay-- means testing -- skews the argument upward instead of to a
level and equitable levy.
Also turnabout is fair play. It was not long ago that you and they were saying that personal
responsibility dictated that one should not own a property or mortgage which was out of their
means. Following that line, if a person has a property worth 4 times another he should be
able to take on the levy of the value.
Lon Ponschock (Fri Nov 21 13:19:34 2008)
Yes, the politics of greed and envy prevail. I do not want that which those better off have, I want but what I have earned. Once we admit to the philosophy of taking from one to enhance the well being of another, where does it end, except that when we are all equal, we will all be equally poor?
As to earnings of those making over $107K (BTW, my earnings are considerably less) remember that their BENEFITS are capped, so why should not their payments be likewise capped?
Here is a novel idea. Instead of using the force of government to pick each others pockets, why not do with what WE earn? And instead of transferring the cost of LOCAL government to state and federal tax payers, why not tax LOCAL residents for all those "essential" services. (Some are and some are not.) It is always easier to spend the other guys' money than our own. We should have learned a lesson from the school funding formula for new schools. Doubtless, if the locals had paid the bill, far more modest accomodations would have resulted.
And another benefit of the above: Far fewer dollars would be spent lobbying, and the bureaucratic overburden of the higher levels of government would be reduced, so that ultimately we would all, on average, be far better off.
"Progressivism" leads to corruption.
Ken Van Dorem (Mon Nov 24 19:20:38 2008)
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