FB Doodlings – “Scott Metzger: Some of property-tax burden should be shifted to vehicle registrations” – Part 1

Calvin Coolidge on taxesYeah, sure thing.  Once again, a lack of thought about a taxing system as a whole versus just wanting a myriad of taxes to replace NH’s property tax system.  Sadly, Scott Metzger fails to understand the driver(s) for this and is simply stated by a famous phrase by a former NH Governor. Emphasis mine, reformatted:

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.

He’s wrong.  If decisions are to be made locally, the only way to pay for things locally is the property tax system.  It is local (mostly – yes, there is a County portion and because some Liberal Judge decided that the word “Cherish” has $$ signs embedded in its definition, a State component.  And let’s be blunt – there is no “asking”.  There is only demanding and taking for if you don’t pay, your real property will be taken from you.  There is no “asking” about how to share and the end result of “sharing” is whose ox is going to get gored.

He continues to moan on and dither. And then he comes up with what he believes is a MAHVALOUS idea of how to make things better – no, not an income tax (Thank God!) but a proxy for one.  Or putting it another way, take the real estate property tax and make it writ small.

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as proven by the politicians we continue to elect, it seems a majority of citizens show no interest in changing this outdated and unfair method of taxation.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.

No, arguing about needs vs wants is a VERY healthy thing to be doing.  Not everyone agrees but Metzler

In thinking about all this conflict, it occurred to me that if we as a state are going to continue to stubbornly cling to the notion of taxing a citizen’s property to raise funds, there is a fairer way to do so – the town portion of the vehicle registration tax.

Ayup, instead of a huge snapshot, make it a smaller one.  After all, who buys an expensive car but a small house?  Or a cheap car but an expensive house…or something like that.  Yep, off the rails again.

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.”

Argue all you want but this is a very flawed argument – all it is doing is changing out a concrete cellar for four tires.  And he’s also wrong about the car – I’ve held my cars for two to three times that long (the Saab is now 15 years old) and I can tell you that doing so doesn’t reflect on my ability to pay for anything.  What it does say is that I’m a cheap bast@@@ who hates paying, period.  I also bought a house much less than what I could afford – so as to pay less property taxes.

What is so wrong with deciding and living cheaper than I have to?  In reading Metzgar’s prose and listening to the Democrats that want Concord to drive an income or sales tax to supplement a property tax, all I can say is that if we are going to pay locally, we need to raise locally as well.

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.

Who could argue that a property tax on vehicles is less fair than a property tax on someone’s home?

(Scott Metzger lives in Hopkinton.)

Me, that’s who.  Actually, it isn’t that a property tax on vehicles isn’t LESS fair that’s the problem.  No where does he say “and get rid of the property tax”, or “cap the property tax”.  Instead, just call him Mr. NJ Guy, because we can objectively see what happens when you add / raise a tax (for NJ, an income tax) to “lessen” the property tax.  In that case, they’ve ended up with an expensive income tax and property taxes still went up.  And he wants a similar thing here???

He also doesn’t mention the consequences directly although he alludes to it: “Those who live modestly, or simply within their means, would not be dramatically impacted by the new vehicle tax.”  Think about that for just a little bit and add this in “If you want less of something, tax it more”.  We saw what happened to the marinas up and down the New England coast when the Democrats in DC decided to “soak the rich” by taxing the bilge water out of “luxury” boats – that marketplace disappeared almost overnight.  Sales of boats went down, maintenance sales plummeted because owners became former owners in heartbeat.  Who suffered?  Not the boat owners – they moved their money to other things.

Who suffered were the marina owners and their staffs.  They’re gone, mostly, now, with beachside McMansions and condos taking over.  Just like the gun tax in Seattle, the massive tax revenues that were expected simply disappeared into the ether.  Progressive Politicians wanted revenge on the rich and take their money – they got neither.  But did those same folks ever apologize to those they actually hurt?  Not a chance….they just moved on to the next targets to be seen to “be doing something”.

You know, like Jeb Bradley – destroyed the electric market here in NH, wrecked healthcare here in NH, and now is looking to kill off private paid leave insurance by “Governmentalizing” it.

All the effects of the Law of Unintended Consequences.  So, Mr. Metzger, what happens to your plan when everyone sees the high level of taxation you’d place on cars and realize that it’s not worth it?  Why would anyone want to pay an equal price in taxes as they did just to buy the car in the first place (parodying your $0.35 property tax rate rise)?  After all, when those on fixed incomes cars die, they have to get a new one – and still get socked with your car tax.  How’s that equitable, eh?

My response at the piece was this:

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.

But folks like this never listen to the truism of “Lower taxes is the result of lower spending”.  Sir, there IS a difference between wants and needs – you simply wish to first blur the difference and then ignore it.

(H/T: Concord Monitor)