So Scott Metzger thinks adding new taxes makes things "equitable"? - Granite Grok

So Scott Metzger thinks adding new taxes makes things “equitable”?

Bull goringAll that does is make it nigh onto impossible for the average person to figure out who is goring their wallets.  It doesn’t solve the problem:

Year after year I am saddened to see my town continually divided over the ability or inability of its citizens to afford an increase in our property taxes.

At every town meeting, a group of residents approaches the microphone to explain how they are living on a fixed income and will be forced to move from the town they’ve lived in all their lives if taxes increase. Another group approaches the mic and talks about how we cannot afford not to increase the school budget or town budget to pay for vital building expansions or services. And both groups are right. What’s wrong is the way we are asked to share the burden.

I believe Hampshire citizens know at a gut level that a property tax is not an equitable way to tax people…

..A property tax does not know if you’ve lost your job or have been forced to take a pay cut. Your property value is simply a snapshot in time that values one asset you own while ignoring your overall financial health. And yet, as proven by the politicians we continue to elect, it seems a majority of citizens show no interest in changing this outdated and unfair method of taxation. So instead we continue to argue with our neighbors about what is a “need” and what is a “want” when it comes to paying for our schools and town services. It’s truly heartbreaking.

This part is true, but Metzger’s solution is just plain muddleheaded.  I have to admit, it’s a doozy in that he believes that sliding scale car registration fees will solve this problem:

If towns were freed to set their own vehicle registration tax rates, they could shift a portion of the property-based tax burden to the vehicle registration tax. And I would argue that the vehicle a citizen drives is a far more accurate portrayal of their overall income and financial well-being than the house they own.

Vehicles are typically going to be purchased or traded/sold every three to five years – far more often than homes. When a new vehicle is purchased, the purchaser makes a conscious choice as to how much to spend based upon their ability to pay and their “wants” versus their “needs.”

I actually keep mine FAR longer than 3-5 years; my Saab is now 13 years old and partially done for the following reason – lower registration fees as it gets older (I’ve now hit the minimum).  I actively work to minimize what I pay to Govt. So, how is THAT going to play here?

If someone chooses to buy a $60,000 BMW instead of a reliable used car for $15,000, then I would argue that speaks a great deal toward whether one can “afford” a 35-cent increase in the property tax rate or not. Those who live modestly, or simply within their means, would not be dramatically impacted by the new vehicle tax. Those families with several luxury cars in the garage would pay considerably more in taxes. If the luxury car owner reaches a point where they cannot afford the taxes on that luxury vehicle, the choice is simple – sell the vehicle and buy something cheaper. No need to leave town, sell a house in a depressed market or any of the other draconian choices that are now required when your house is the sole measure of your wealth.

Yeah, I think the Law of Unintended Consequences would gore his butt quite nicely here.  Keep your house – can’t afford a car?

This is what I left for a comment:

The problem that the author is his analogy with a car; it assumes that people don’t behave in the same way when they buy a house. As we saw in the Great Recession, too many people believed they were richer than they were and over bought – “a conscious choice as to how much to spend based upon their ability to pay and their “wants” versus their “needs.”‘

So the analogy falls apart. The root cause is that the municipality / School Board / County is overspending what their populations can afford and thus, having to raise the taxes in the first place.

“Cost-shifting” as the author is talking about, eventually is a “sucker’s bet”. In the end, all spending at all levels of Govt end up in our wallets and demands “X” amount of money from it. The mechanism by which we get hoovered (property tax, income tax, sales tax, Bus. Enterprise Tax, Profits tax, misc fees) is irrelevant – the aggregate cost of all that is the proper number to discuss because THAT’S what has to be paid. You can scream all you want about high property taxes but when you look at Government as a whole, that “X” ain’t gonna change until you start screaming at them to stop the spending.

Which is, of course, the appropriate solution that the author laments. Property taxes is not the root cause.

I liked this one, too:

Mr. Metzger believes, “(New) Hampshire citizens know at a gut level that a property tax is not an equitable way to tax people.” But somehow, he seems to believe we will accept the notion that a car tax IS an equitable way to spread the cost of schools.

If equity is the objective, how about “if towns were freed to set their own” head tax? Then, at least a family of 4, with 2 kids in school, would be paying twice as much as a retired couple without kids. That would create at least some link between costs and benefits. Maybe THAT would have more of a “gut level” appeal.

Of course that idea wouldn’t appeal to heads of large families. Similarly, Metzger’s idea wouldn’t appeal to owners of high end cars. The question is, who’s ox is going to be gored?

Every tax creates winners and losers.

(H/T: Concord Monitor)

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