Wednesday, February 22, 2006

Tax Levy Limits. Good? Bad?

You have a headache. Take aspirin for the pain and it goes away - for a while. What if the headache comes from a tumor?

Taxes are the symptoms of budgets, not the cause of them. Taxes are how we pay for the government services we expect.

What if the spending levels are not in agreement with the services for which we pay? Do we just take it on the chin year after year?

What if education spending is near the top of the nation but student performance is near the bottom third in the nation?
What if our taxes are among the highest in the nation but our infrastructure, roads, bridges, are sub par?

I suppose one can make a case for saying "No more taxes, We've had enough".

Let's institute tax levy caps.

Tax burdens will be lowered for the property owners. That's a good thing, right?

But government needs to produce services and, unlike a company which must compete or sink, it will always be there and go to the people for money, in one way or another.

When the property tax revenue is limited (Prop 13, Prop 2 1/2) governments will find other sources - increased user fees, more taxes on other things, higher sales taxes, bonding with associated debt, or else services will deteriorate.

Both Massachusetts and California are at their pre-legislation levels in spending, only the revenue sources are different. Tax payers, the people, must take the money from a different pocket, that's all.

One also needs to ask if property owners, as a group, are generally more affluent than those who don't own property. Intuition suggests that this is indeed true.

If so, then lowering the tax burden as a whole for the property owners will move the burden to non-property owners. This shift is not in the overall best interest of the state and is likely to be counterproductive.

The only fair measure would be to place realistic limits on SPENDING, both at the state and local levels. Limits are not created in a vacuum, and to be truly effective they should not be arbitrary and fixed, but respond to and reflect the economic realities of the times.

Any limit must be indexed to some agreed upon benchmark and be subject to periodic adjustment both in terms of the benchmark and the indexed amount.

Nothing else makes much sense and, in the long run, could merely postpone the best treatment until the patient actually dies.

Maybe It's Just Me.