An overlooked but vital aspect of the property tax problem is that there are two principles of fairness regarding property taxes that are mutually exclusive.
#1 A person who buys a $1 million dollar home should pay a fair tax on a million dollar home.
#2 The taxes people pay should reflect the budget needs of their town; e.g. if a town eliminates tax increases, property owners should not expect tax increases.
These basic principles can not co-exist because of REVALUATIONS.
Existing owners' property taxes can reflect the tax levy (Principle #2) but only when there is no revaluation. Buyers of properties of (usually) increasing value however, are taxed too little on assessed values thus ignoring Principle #1.
To correct this inequity for new owners, we revalue every three years. As a result, existing owners will pay taxes unrelated to tax levies.
In fact a town could even declare a moratorium on tax increases yet over 50% of existing property owners would pay higher taxes due to revaluation, violating Principle #2.
The typical reaction to high taxes is to look for spending cuts but as I've explained, the results would disappoint the majority of tax payers . This does not bode well for peace, harmony and enthusiastic citizen participation and cooperation.
1 comment:
You need a louder voice and I have found your answer. An alliance between R.I.G.H.T. and the (stay in your chair) Tea Party. Can you picture that? I can and I have a big smile on my face.
Rich
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