Tuesday, September 22, 2009

The Right Tax

Today's Providence Journal carried a story about a Barrington couple who "say that town officials knowingly withheld public records in violation of the state Access to Public Records Act" and have lodged a complaint with the state attorney general. People must have easy access to public records particularly if they directly effect the person making the request. We wish them well.

Sadly, even if they are vindicated they will achieve little more than a moral victory. Their complaint deals with the accuracy of house appraisals which determine one's tax bill, the assumption being that a fair appraisal will produce a fair tax, a right tax.

But is the right tax the one resulting from an accurate assessment? Traditional thinking says yes and people often appeal their assessments when they think they're too high after revaluation.

Now imagine Barrington resident, Mr. David B., sitting before the assessment review board having been shocked that his new tax bill is 42% higher than the prior year while the tax levy increased just 3.96%.

He felt that his property value increase of 30% was far too much. The board listened patiently and agree to a reduction in value of $35,000 bringing the increase to only 15%. David, happy with the board's decision, left satisfied.

In the afterglow of his victory David didn't realize that his new tax bill, while less than before, is still 25% higher than the year before. So, is David now paying the right tax? My concept of fairness says that David, and every other Barrington resident, should be paying 3.96% more to fund the 3.96% tax levy increase. That is the right tax but no existing owners will receive it because of the revaluation itself, which is fair only to new owners who choose the price of the house they buy and are correctly taxed on that market assessment, at that time.

It's wrong for everyone else.

Read more at the Righttax website link to the right.