Indiana's Spending Spree

The Tribune had an article today about increasing sales or income tax to replace property taxes. According to the Legislative Services Agency, to bring in the same amount of revenue without property taxes, sales tax would need to more than double – from 6 to 13 percent.

The other option would be to increase individual income taxes from 3.4 to 9 percent.

As the Tribune pointed out neither of these options would be very popular. Taxes never are.

Whether these numbers are accurate or not, I don't know. The fact of that matter is however, that Hoosiers will pay out the same amount no matter what form of tax, or combination of taxes it may be. I still advocate totally eliminating property taxes, but I am an even bigger advocate of cutting spending and increasing government efficiency.

Perhaps the reported percentage increases to replace property taxes will wake people up the ridiculous spending spree our government is on.

It's got to stop.

Daniels cautious about total elimination

Following from the South Bend Tribune:

Daniels open to killing property taxes?On Lakeville stop, governor says it's worth weighing

LAKEVILLE -- Gov. Mitch Daniels stopped short of saying he would seek to eliminate property taxes in Indiana here Tuesday, but suggested the issue is one that requires examination."We ought to look and see," Daniels said in response to a question. "We certainly need to head in that direction and go as far as we can."One way to start, according to Daniels, would be for counties to adopt local option income taxes that could be used to reduce property taxes dollar for dollar... more.

TAX CHURCHES!!!!

On Sunday, the IndyStar had a story entitled “$2.7 billion in property untaxed in Marion County. One idea gaining traction nationwide is a fee for public services in lieu of property taxes.”

Here it comes. It’s time to tax churches and non-profits. Twenty years ago such a suggestion would have been unthinkable; now it’s being thrown out as a viable option.

This is one of the major reasons why property taxes should be eliminated completely, to protect churches from government taxation. To think something as un-constitutional as this is even being considered is amazing. But no sooner did the story come out than many bloggers started clamoring in agreement, as if tax-exempts are the cause for the current property tax crisis in Indiana.

This country has NEVER allowed the taxation of churches, not for any reason or any cause. Ten years ago non-profits were tax exempt in Indiana and it was not a problem with anyone. Now, in 2007, we have a tax crisis, and of course it is the non-profits that are the problem!

Well friends, I’m here to say that that is not the problem at all. As Polis Politics so adequately pointed out, uncontrolled spending and government waste is why we are where we are today.

Eliminating Property Taxes: What will it take?

While support for the idea of eliminating property taxes seems to be on the rise, there is a difference in opinion about what it will take. Indiana property taxes bring in nearly $6 billion, and somehow, that figure will need to be replaced.

Eric Miller of Advance America has a plan to completely eliminate property taxes which would raise the state income tax from 3.4% to 4.4% and the sales tax from 6% to 8%.

However, many disagree with his figures, most notably some Senate Republicans.

Senator Luke Kenley has been on a commission studying property taxes for several years and also sponsored the bill this past session allowing Local Option Income Taxes (LOIT) to help relieve the property owner and set the "circuit breaker law" allowing only 2% of assessed value of private property to be taxed. Senator Kenley disagrees with Miller's numbers stating that either the income tax would need to rise to 8.4 percent, or the sales tax would need to rise to 12 percent.

This difference may be the fact that Miller's plan takes into account what he calls a "state spending cap" saving the state $1.543 billion, whereas Kenley probably does not include this in his calculations.

What seems to be the major difference in their calculations is that Miller's plan includes savings from spending cuts and Kenley's does not. Unfortunately, the Senate Republicans have not been overly enthusiastic about tightening the belt in the State budget and have approved funds for a number of new special programs which are paid on the backs of Indiana tax payers.

That needs to change.

So Now we know Why...

Over on HoosierAccess, a great post entitled "So Now we know Why..." was published by Brian Sikma. Go read it.

Many people ask me, "So what are you going to replace property taxes with?" I tell them three possible things:

1. Sales tax.
2. Income tax.
3. Spending cuts.

We CAN be more efficient and we MUST be. It's sad, but here in South Bend over 50% of our students drop out before graduating from our expensive High Schools. Sometimes I think the one room school houses 150 years ago heated by wood burning stoves produced better educations and definitely better citizens than many of our multi-million dollar palace High Schools today.

Just a thought... Americans need to realize that money isn't the solvent for every (or even most) problems.

Property Tax Elimination Advantages

There are several ideas that I want to eventually develop on this blog highlighting the advantages of totally eliminating the Property Tax system and replacing it with spending cuts, sales tax and income tax. Here are a few of them:

• How much money is saved by not having all the paperwork, assessors, appraisal appeals, tax sales and everything that is associated with having to collect property taxes.
  
• Out of state residents will contribute to the local governments through sales tax.
• Every working and spending individual will contribute rather than just property owners.
• The American Dream to own your own home will actually be a reality.
• You could leave a piece of land for a decade and come back and it will still be yours.
• You will no longer have to pay “rent” to the government.

Why?

“Why did our legislators do nothing to avert the present property tax system, when they knew it was coming?” That is a question that I’ve had and I am sure many others have had as well.
Well, I’m finding out that some politicians did try, but they received no support from the leadership.

Last night, I spoke with a lady from South Bend. She has not received her tax bill yet, but her house re-assessment went up $30,000. But she couldn’t even sell her house if she wanted to, let alone for +$30,000 because there are curently three vacant houses on her block!

This past session what is called the circuit breaker law was passed not allowing local governments to tax property more than a certain percentage of what the property is worth. So, what do our local governments do? Assess the property values much higher than their market value actually is, circumventing the circuit breaker law.

Every day, I am more convinced that totally eliminating the Property Tax is the only real way to deal with this highly arbitrary tax system