The Property Tax Revolt Grows in an Unexpected Place | Fox & Hounds Daily.
In less than a fortnight, the much celebrated/often maligned (depending on one's viewpoint) Proposition 13 will mark its 33rd anniversary. Ironically, a couple of days ago, the first-year Democratic governor of New York engineered a deal to establish one of Proposition 13's key protections for taxpayers in the Empire State. Governor Andrew Cuomo cut a deal with the legislature to cap most yearly property tax increases at 2-percent.
The New York proposal is not an exact replica of California's iconic property tax reform measure. But the yearly cap acknowledges one of the important features of Proposition 13's tax shield - stop limitless property tax increases on defenseless taxpayers. Especially, since property taxes often measures value of property and profits on paper only but do not measure the taxpayer's ability to pay.
In an echo to the Proposition 13 tax revolt, it was reported that some seniors on fixed incomes were in jeopardy of being taxed out of their homes under the current New York property tax system.
It is not just seniors, however, who feel the pain when crushing property taxes are levied. The whole economy suffers.
Governor Cuomo made no secret about his concerns that taxes are hindering his state's economic growth. He offered an austere budget a couple of months ago that avoided tax increases. As the New York Times reported, the proposed property tax cap is aimed at reversing the economic decline in many parts of the state.
It's not that property tax burdens on New York taxpayers are a new phenomenon. New York is a heavily taxed state and has been for some time. I remember over twenty-five years ago traveling to New York with Howard Jarvis to discuss property tax reform with some prominent New Yorkers. Unfortunately, they did not have the initiative process to seek property tax relief when the people were ignored by a recalcitrant legislature.
Apparently, the problem became severe enough and the pressure mounted on the legislators by their constituents became strong enough that the legislators agreed to negotiate a relief plan with the governor.
Cuomo called the tax deal a "game changer" that would "change the trajectory of this state."
He wants to spur growth and entrepreneurial activity by cutting the tax burden.
Perhaps the New York governor's message can arrive across the country in time to honor the granddaddy of property tax revolts on its anniversary in the Golden State.
And perhaps wise people should go visit Fairhope, Alabama, where policy is very different -- even in the middle of one of the lowest-property-tax states in America, with schools whose reputation California's are fast approaching.
We ought to be revolting against sales taxes, and wage taxes, and taxes on buildings, NOT against taxes which are largely on land value.
Land value is created by the presence, activity, growth and investment of the community, and when we collect most of that value back for the sustenance of the infrastructure, we are financing our public spending justly and logically. When we use taxes on sales, wages or buildings to finance that spending, we only depress the economy and reward land speculators, who contribute nothing.
Think again before you praise Proposition 13. It is destructive. Through wise tax policy, we can create a much better situation for ordinary people. Wise tax policy is to tax land value.
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