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The Governor Giveth, and the Governor Taketh AwayPosted Wednesday, March 19, 2008, at 11:47 AM
Property tax relief in Indiana has become more about "robbing Peter to pay Paul" in many ways, depending on your personal situation.
Today, Governor Mitch Daniels is expected to sign a property tax reform bill, which will provide tax relief and supposedly permanently guard against future property tax increases. At the same time, he is offsetting these lost revenues to the State with an increase in sales taxes from 6% to 7% as of April 1st. No, that's not an April Fools Day joke. As you'll recall, it wasn't so long ago that we saw a one percent increase from 5% to 6%. In fact, that change became effective on December 1, 2002. (Personally, I found the date of this last change as an interesting attempt to collect higher revenue during the 2002 Christmas season, while also coming about a month AFTER the November elections of that year, but I digress.) To see how we stack up to other states (at least as of January 1, 2007), The Federation of Tax Administrators, a non-profit corporation, provides the following sales tax comparison chart http://www.taxadmin.org/FTA/rate/sales.h... On the plus-side of these tax changes, elderly Hoosiers should benefit from lower property taxes on their homes, while they won't see higher sales taxes on necessities, such as food and prescription medicine, as both are exempt from Indiana's sales tax. I refuse to say it will benefit the often-quoted "those on a fixed income" because I believe EVERYONE is on a fixed income, but you know what I mean nonetheless. Some also argue that an increase in sales tax is a more "fair" way to tax since it taxes consumption, as opposed to property tax increases where assessments are often outdated, incorrect, and/or very difficult to gauge the "fairness" from one to another. Some even argue that property taxes are socially counter-productive and lead to less pride in the community since taxes go up as a person takes better care, maintains, and improves a property. The bill has passed rather quickly, so it's gone from "just talk" to actual law in a short amount of time. Many Hoosiers have been in disbelief all along the short path, too, thinking it would never happen. Well, it is, but I wonder if the haste of this bill's enactment has been actually counter-productive -- at least in the short-term. Many businesses could have had "beat the tax" sales to clear out slow-moving inventory, but they didn't get much of a chance to do so. If the bill was passed with a later effective date, this could have bolstered sales within Indiana, even though it may have been short-lived. As the national economy is worsening, many belts are also tightening, so it seems people really need some reason to buy now rather than later. Comments Showing comments in chronological order [Show most recent comments first] |
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The rich are also going to be paying a higher sales tax, and they consume more, way more, than those of lesser means. obviously non-property owners are going to be affected more, but you can't make everyone happy with any change in tax code. personally, i'd rather see a sales tax than a property tax any day. the idea that you have to keep paying for something that you already own is ludicrous
I agree with you, corbinsa. Though I believe a sales, or consumption tax, should be high enough to eliminate property tax altogether! I have personal friends who have been forced to sell their life-long homes because their fixed incomes could not afford the property tax increase levied upon them. Sure, they made great profits on their homes-but they didn't want to move away from their life-long friends, neighbors and families.
Maybe its time for a tea party.
the real answer is that the government should be small enough to eliminate property tax altogether
Whoaa there, not from greene county- nowhere in my post did I write that I wanted "the poor who can't afford homes" help me pay for my property, so your post, as well as your logic, is flawed. Furthermore, I did not use the word "hate", or state any other emotional reaction to the fact that their property tax increased to a point where it became to costly for them to stay in their life-long homes. I simply gave you a real-life example of our out-of-control property tax problem.
Though I do believe I understand the point you are trying make, however, I suggest you consider that "the poor" would benefit from lower property taxation indirectly through lower monthly rent. Landlords often pass on property tax increases to their tenants.
not from Greene Co., property taxes do not pay for property. I pay for my property, and have to pay the state and local government for the right to keep property that I own? how is that fair? I want everyone to pay their fair share of government expenses, and I want the government to be small enough that they don't need us to pay umpteen taxes to support it.
Dear "not from Greene Co.", I have a rental unit, and I raised the rent because my property taxes went up.
Not all "the poor" stay poor, I'm living proof of that.
Nonetheless, based upon data from Indiana's local government website, for every property tax dollar collected:
schools get $.54
libraries get $.03
city/towns gets $.16
township gets $.03
county gets $.19
special unit gets $.05
tax increment replacement $ .002
and state gets $.0008
And I gotta tell ya, I haven't received a single check to help me pay for my property.
But seriously, we have a problem when honest, hardworking folks have to sell out just because they can no longer afford $200.00 a month in property tax.
Not from Greene Co., I just remembered who you are...we met one night. You are no doubt an intelligent, decent human being. Namaste!
And I do appreciate your position on property taxation. Unfortunately, for many, I suggest, property taxes are simply too high.
It's not a tax reduction or a shift, it's an increase!
The property taxe reduction won't be fully-implemented until 2010 -- and you'll only see about one-third reduction on average, according to Mitch himself.
HOWEVER, the sales tax increase is almost immediate - effective April 1st in fact!
Raven, that's exactly what I'm afraid will happen.
I have two friends, Paul & Peggy, who have been life long artists by profession. Early in life, just after Paul returned from fighting in the European theatre in WW2, they bought a modest home on the north side of Indy in the 106th & Keystone Ave. area. They worked hard planting trees, flowers, and shrubs creating a little oasis for themselves and the children they raised there...one door frame in their little nest had the growth progressions of their children notched into the wood. Well, Indy grew and their little bungalow found itself in the midst of higher and higher priced real estate. Well, of course, their property taxes increased along with the value of their property. Then sadly, after the last increase was levied upon them, they had to decide to sell because they simply didn't have enough income to buy groceries & medicine, pay utilities and upkeep, and pay property taxes too...
I stand firm in my belief-property taxes are too high.
Raven is correct, this highly touted Property Tax Relief is nothing more than a bait-and-switch. By the year 2010, we will be paying more in taxes collectively than before this relief was bestowed upon us.
The devil is in the details, and we don't yet know the details of this new law. I suspect we will find there are special carve-outs for the well to do.
The people again spoke loud and clear that we wanted property taxes completely repealed, yet this Governor is delivering higher taxes in disguise. We wanted more responsible government spending, yet this Governor and his strong arming of the legislators has produced no plan for reducing spending. Daniels places the blame on local governments, yet our local officials can only work within the framework dictated by the State.
Come this November, it is time to send Daniels packing and elect an Independent candidate for Governor. One who lives among us and understands the financial constraints we all deal with every day.
Please visit www.bonneyforgov.com
And dear not from Greene Co.,
I do empathize with not only all humanity, but with all life forms, great or small...so I try to do what is right and good. Live simply so that others may simply live. Keep waste and refuse to a minimum. And at every possible opportunity, I am generous to the less fortunate. I really haven't amassed much wealth at all do to my generous nature. What little I do have, came not as a gift, but as a result of my own honest work. I do share. Yet I could do much better as I consider the distribution of the world's wealth, that over half the human beings on this planet go to sleep hungry every night. In the words of Kate Bush "Life is sad, and so is love."
And though I am naturally generous, my survival instinct seems to drive my "need" to store some nuts for the winter of my life.
If there are any nuts left after I'm gone, then it goes to charity.
Sure, we must help the less fortunate, yet folks should not have to move out of their homes because of ever escalating property taxation.
Respectfully yours,
Hopeanddust
B ball fan, I love your posts. Anyone who appreciates the lessons and contributions of the ancient Romans and Greeks, as well as the music of Dylan as much as you, means to me I have to give you, and your opinions, serious consideration. Not to mention you're a damn good writer.
Thanks for the interaction. I enjoy it.
B ball fan, was your dad the guy who sold the thousands of acres of the Goosepond property to the State of Indiana twice? Now, that guy made some money selling the easement first then the property second. I'm in awe!
B ball fan, I never said I thought the government would make a dramatic change, just that it would be nice...
for a nice graph of public debt as percentage of GDP over the last 220 years, check this out http://en.wikipedia.org/wiki/Image:US_Pu...