Property Tax Fairness And Generational Warfare
This post visits a touchy subject but it is important in the days before the legislature begins revising property tax policy that it be discussed.
LaVar Christensen has a blog which he recently used to advocate for freezing property taxes for the elderly. The current circuit breaker program which helps the poor, both old and young, is important and should be expanded to help even more people. Any efforts to help the less fortunate with their property tax burden should be focused on this existing tool. A blanket property tax freeze that benefits all elderly taxpayers, even the most wealthy, is just plain dumb. We shouldn’t be transferring the burden of taxation from those best able to pay to the rest of us who are often struggling just to get by. I left a comment on Mr. Christensen’s blog yesterday that never made it through his moderation process. I decided to publish it here with a couple spelling and grammatical corrections:
Mr. Christensen,
I’m a father of three young children in a very average home in an average neighborhood in Davis County. My wife and I still owe on our house and often struggle to make ends meet every bit as much as many of the elderly voters you claim you sympathize with.
I pay my property taxes with the knowledge that my local government is spending that money as efficiently as possible (usually far more efficiently than the state uses my income tax and sales tax dollars). I hate paying taxes but I understand why they are necessary.
Your proposal to “freeze” property taxes for the elderly represents a plan to place even more of the tax burden on Utah’s young families that are struggling to make it. You would penalize young families while favoring people who in most cases have decent retirements and rapidly appreciating homes that are already paid off. In short most elderly have already experienced the most expensive part of their lives and have had many more decades than the typical younger family to build up their own wealth. How is it fair for them to get a tax break at our expense?
It is understandable that from your perspective as a politician you’d want pander to the elderly who tend to be reliable voters but that doesn’t change the fact that your policy suggestion would make supporting my family even more difficult than it already is.
We don’t need politicians who are pandering to reliable voters. We need people like those who originally wrote the “uniform and equitable” language into the state constitution. They clearly seemed to understand the importance of a just and fair tax code better than you do.
Mr. Christensen isn’t in our legislature any longer and I don’t know that any politicians currently in office actually pay attention to anything he has to say on this issue but I think it is important that dumb ideas be confronted no matter what their source.
I hope to have more on property tax issues over the next couple weeks.
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Correct me if I’m wrong, but the proposal to “freeze” taxes for the elderly would only hurt their children when the parents die. When the children try to settle their parents estate, they will have to pay all of those taxes?
I’d call that the property tax thaw.
Not a good idea.
Comment by Tyler Farrer — December 27, 2007 @ 1:20 pm
You should also point out that primary residences ALREADY get a 45% exemption while businesses and secondary residences do not.
Christensen is Utah’s version of Mike Huckabee: very conservative on social issues and moderate at best on fiscal issues. To cover up his fiscal moderation, Christensen plays up to elderly home owners.
Comment by Anon — December 27, 2007 @ 1:22 pm
Not sure why you said your comment was not placed on his site. Looks to be there. Try a little patience during the holidays my friend.
Cheers.
Comment by Darin — December 27, 2007 @ 4:27 pm
Jeremy,
Thank you for your comment. I am sorry that you falsely assumed that my views are directed at “reliable voters” as some sort of “political pandering”. Perhaps you were just expressing a healthy concern about politics, which I share. You may not have read my other posts – “A Call to Good Citizens Everywhere” (which explains the website’s goal and objective to provide a forum wherein we can identify and discuss the principles that should guide and control government action) and “Keeping a Lid on It” (the constant need to control the size and scope of our government).
You have raised a very important principle that must be considered to make any property tax relief fair and comprehensive. You rightly point out that singling out the elderly to protect them against ever increasing tax assessments at a stage in life when their fixed income levels cannot sustain it could result in a tax shift to other taxpayers. This only occurs if government insists on maintaining its current level of spending and, thus, refuses to accept any reduction in revenue. I assure you that my only motivation is a sincere desire to meet a real need in a fair, balanced and equitable way. The point that you raise is part of those considerations.
As a general proposition, “uniform and equal” property taxes work well. However, there must always be sufficient flexibility to handle individual applications on a case by case basis and not through a “one size fits all” because it doesn’t. A fair and balanced tax break for the elderly could be uniform and equal because everyone will, in their own time, reap that same benefit. Please do not mistake my proposal as a blanket “freeze” on current tax rates. Principled discussion, dialogue and debate involves exploring a wide range of options. For example, a deferral rather than an outright abatement may be the way to go. I sited the current “greenbelt taxes” that give relief to agriculture property (even what isn’t really agricultural anymore) as precedent for how a limited residential “greenbelt” deferral could work. The back and forth discussions that we are able to have through this blog exchange are what happens in Legislative Committees. That is where elected representatives go back and forth and beat up on ideas and Bills until they arrive at a point that adequately takes into account competing views and priorities.
I believe there are inefficiencies in government and that it should not continually grow each year without close scrutiny and periodic reductions where circumstances will allow. Over the past ten years in Utah, our state budget has nearly doubled from approximately $6 billion per year to nearly $12 billion as projected for 2008. (This includes a heavy dependence on receipt of Federal funds, which further adds to the taxpayer’s overall tax burden). Utah state government growth was among the fastest of all states in the 1990s. At the local level (and I agree that the government closest to us is best understood and managed), each city, county, school district, etc has its own corresponding accountability to the taxpayers. In every case, every penny that government takes is a hard earned penny that required toil by citizens. As you so nobly acknowledged, we support reasonable taxation for the good of all. However, we have a right and a duty to speak up and do all we can to make sure tax levels and methods are strictly necessary and equitable. Regarding property taxes, that discussion will continue in the coming Legislative session.
Thank you for adding to an open exchange regarding the principles that should guide this and all similar debates about public policy, taxation and government spending.
Comment by LaVar Christensen — December 27, 2007 @ 4:32 pm
Not sure why you dont want people to know your comment “is” posted and did make it on LaVar’s site. Please update your post to reflect this.
Comment by Darin — December 27, 2007 @ 4:53 pm
LaVar’s response can be seen here http://citizensforprincipledgovernment.com/?p=27
was taken down off this site
Comment by Darin — December 27, 2007 @ 4:55 pm
Darin,
I’m not sure what you wanted done in the last two comments…would you like me to remove them?
I’ve already linked to Mr. Christensen’s original blog post…are you requesting that I link again to inform readers that he has commented here on my blog and on his?
Comment by Jeremy Manning — December 27, 2007 @ 5:01 pm
Sorry Jeremy. Things were a bit dicey with the comments on here. most were not showing up.
Cheers.
Comment by Darin — December 27, 2007 @ 5:04 pm
In Jeremy’s defense, having read the post, it is quite easy to interpret it as political pandering.
Especially in your mockery of those who keep a “bail of hay, or a horse” on their land. Jeremy’s criticism has led to an exchange in the comments here than your original post offers to the debate.
Many would make the same assumption Jeremy did if they were to read only your post, and not what Jeremy has written here. I did.
Thanks Jeremy.
Comment by jasonthe — December 27, 2007 @ 8:45 pm
LaVar, I disagree with this,
Even if overall spending is reduced to the point where younger property owners don’t have to see an increase in their property taxes, you still have a relative increase in taxes since they won’t be seeing the tax cut (at least not now, I assume they would when they get older).
Thus Jeremy is right, this plan would divert taxes from elderly individuals who can easily afford to pay their property taxes, to younger people, raising families, with lower incomes.
The ability to pay has nothing to do with age, and everything to do with income and dependents. Why would we want to give a tax cut to someone who can easily pay the tax by pushing the burden on to someone who can’t.
If you’re overall goal is to reduce government size and budget, giving a cut to all property tax payers, or, better yet, expanding the relief to low income property owners would still achieve your goal, without unjustifiably burdening the younger and middle aged taxpayers who are working to raise their families.
Comment by craig41 — December 27, 2007 @ 11:28 pm
A couple of thoughts:
(1) I think that there are better forms of tax than the property tax. I would prefer to gradually abolish it entirely in favor of generating revenues from other sources (consumption taxes).
(2) I can see LaVar’s point in a way, because the elderly are on a fixed income. In principle, though, I don’t agree with it. The way to solve the overall problem is not to favor the elderly, (although I went against the principle by voting for freezing their water bills when I was on a city council). It is, rather, to get rid of inflation, and the most sure way to do that is to return to the Gold Standard. (How’s that for coming out of left field!)
Comment by Frank Staheli — December 29, 2007 @ 4:30 pm