Tax Realty Consultant

An oft-repeated, dubious claim holds that while a frog thrown into an already-boiling pot will realize his predicament and attempt to save himself injury, one placed in an initially cool pot will allow himself to be slowly cooked.

Of course, if this was really a truism about frog behavior, few of us would have any real interest in or exposure to this scenario. As an illustration of human nature, however, the implications are many. Indiana property taxes come to mind.

There has been an understandable uproar about the tax bills being received by Hoosier property owners. It is quite a shock for taxpayers to see one, big, fat number representing their portion of just one method the state has for raising money each year.

Property taxes, like all taxes, are money taken from individuals and corporate entities to pay for the government activities mandated or allowed by legislation. However, there is one big difference between property taxes and other forms of taxes. Property tax bills are incredibly more honest, and the uproar over the bills is the sound of truth hurting.

Few, if any, of the proposed fixes to the property tax ”crisis” make any effort to eliminate the cause of high property tax bills — government spending. The situation landlords find themselves in illustrates this problem. In order to dampen past property-tax uproars, vote-conscience politicians have put into place mufflers, such as tax-lowering exemptions for owner-occupied properties. However, as the actual amount of property-tax revenue needed has stayed constant or increased, the money saved by some property owners has resulted in an increased burden on others.

Most recommended remedies narrowly focus on additional shuffling of the methods of raising the same amount of taxes. Though the specific numbers differ among plans, the most common strategy requires moving from a formula based upon property value to increased taxes on sales and/or incomes.

There are real concerns with these other methods. As one example, the sales tax is a regressive tax. An increase in this tax would disproportionately burden the poor because it would cut into a greater percentage of their total income and wealth when purchasing. Anyone’s whose livelihood is dependent upon sales, particularly for big-ticket items, will also be potentially harmed with a sales tax increase.

The income tax is the marvel that has allowed many of us to experience that mathematical perversion that occurs when we get a raise or work some overtime and receive a smaller paycheck as a reward for our effort. The harder and more you work, the more you pay for the privilege.

In truth, property taxes are about as good and fair a method as any for raising revenue for government to spend. Property taxes are arguably perfectly progressive, that is, the greater property wealth an individual has, the more they pay in these taxes. In fact, property taxes are the only taxes that take an individual’s actual wealth, which may be a better indicator of one’s financial situation than income or consumption, into consideration.

There is also a significant link between where your property is located and both where and how this money is spent. A large portion of Indiana property tax revenue is spent on public education, public education regulated primarily by the state and received in local school districts in which resources and attendance are determined by location. One wonders how many of the same people who believe their property taxes are too high also believe more should be spent on public education.

One of the most basic functions we expect of government is to protect our property. Though taxpayer opinions differ over needs for particular parks, libraries, welfare programs, high-dollar consultants to conduct expensive studies, stretches of road, economic-development schemes and more, only the most radical of us have no expectation of police showing up when we have been robbed or the fire department showing up to save our homes from destruction. Further, the more property, the more protection is required.

There is one major drawback to the property tax system in Indiana. The current method of assessment is unjustifiably costly and inefficient. However, streamlining that process can be addressed without scrapping the whole system.

There is something inherently more honest and informative about taxpayers receiving one whopping bill every year that angers them about how much money they are handing over to the state. If only all taxes were paid that way.

It is too easy to shell out those smaller amounts of money that appear only as a number on a paycheck stub. Money we never got our own hands on in the first place. Sales tax works the same way. We get used to just rounding up the cost of purchases.

http://www.news-tribune.net/opinion/local_story_344123122.html

Realty Tax Consultant

Ace Employment Job Services Agency
Key Largo Bill Bid Bidding Directory

www.realtytaxconsultant.com