Looks like Tracy Warner, of the Fort Wayne Journal Gazette, couldn’t stay away from blogging entirely. He is authoring a blog called Indiana Tax Facts. (h/t Indiana Law Blog). One entry he has up is called Replacing property taxes.
There has been a lot of talk about taking away the property tax and replacing it with something else. That sounds like a pretty good idea, but becomes less so when you start doing the math. Apparently Sen. Ford has developed a program to do just that in order to analyze what would be necessary to replace the $5.65 billion in property taxes produced in 2006.
Using Ford’s calculator, Indiana would have to raise its sales tax to a nation-leading 8 percent plus dearly double income taxes from the current 3.4 percent to 6.4 percent – an increase of 88 percent – plus, for good measure, raise the corporate adjusted gross tax from the current 8.5 percent to 9.5 percent.
And those increases don’t replace local income taxes, which stand at 1 percent tax in Allen and some other counties.
For someone making $50,000 a year, the increase in the income tax alone would be $1,500. For someone making $75,000 a year, the increase would be $2,250. How many people with similar incomes would end up paying less than they do in property taxes?
The money is coming from somewhere. Folks ought to figure out whether they’ll do worse or better under a new system. If they’ll be doing worse, they’ll want to figure out whether their generosity is warranted.
[tags]Indiana property taxes[/tags]
Property tax properly applied under current law is one of the fairest taxes. It’s an easy target largely because it’s a lump-sum, twice-a-year payment. Ask a person what their Indiana income tax payment was last year.
Senator Ford should get credit for actually being a legislator who’s pointing out the difficulty of the issue. (Well, him and the person in his office who came up with the Excel worksheet.)
The entire “abolish property taxes” movement is just a lot of hot air unless it moves on to focus should be on the replacement revenue / where the cuts will come from. Most folks, unless they’re Mike Kole, should look at themselves in the mirror if they want to know why their taxes went up. We’ve all asked for more from government with the expectation of it being free. It doesn’t work like that, and legislators who are hopping on the bandwagon without asking the hard questions are frauds.
And while the increase in property taxes truly puts some people in a bad spot, it’s been entertaining watching the local media collect the stories of those affected. My personal favorite was this gem from the Franklin Daily-Journal:
My heart bled for that last guy, let me tell you. I mean, the first two people have their problems, but the last guy….
Based on this story my taxes would almost double what I pay in property taxes. Not exactly fair and will likely result in an exodus of residents from this state.
My property tax went up 26% while the assessed value went up 23%.