Tax Shift – Not Reduction

More evidence that taxes are being shifted under recent property tax proposals, not reduced. (H/t Taking Down Words). The Fort Wayne Journal Gazette takes a look at winners and losers under the new property tax proposal:

Shifting tax burden
Examples of how the proposed property tax reform plan would affect owners of homes in Wayne Township annually. The examples assume homeowners will begin paying a 7 percent sales tax plus an additional local income tax of one-half of 1 percent:

HOME VALUE: $40,000
Family income…$35,000
Property tax savings… -$122
Higher sales tax…+$203
Higher income tax…+$175
Total tax
increase
…+$256

HOME VALUE: $80,000
Family income…$50,000
Property tax savings…-$266
Higher sales tax…+$240
Higher income tax…+$250
Total tax
increase
…+$224

HOME VALUE: $100,000
Family income…$50,000
Property tax savings…-$374
Higher sales tax…+$240
Higher income tax…+$250
Total tax
increase
…+$116

HOME VALUE: $200,000
Family income…$100,000
Property tax savings…-$1,656
Higher sales tax…+$380
Higher income tax…+$500
Total tax
savings
…-$776

HOME VALUE: $500,000
Family income…$250,000
Property tax savings…-$5,871
Higher sales tax…+$600
Higher income tax…+$1,250
Total tax
savings
…-$4,021
Source: Indiana Senate Caucus staff

Ahhh. Sweet relief! The table comes with an accompanying editorial by the Journal Gazette:

In many counties, based on preliminary analyses, “middle-class and lower-class homeowners lose, and higher-class homeowners win,” said Matt Greller, executive director of the Indiana Association of Cities and Towns.

Invoking a property tax “crisis” that was largely of their own making (see Monday’s editorial), legislative leaders are pushing plans that would crimp the ability of local governments to provide services that citizens want.