Loading ...INDIANA, MEET REAL PROPERTY TAX REFORM
With strong majorities in both chambers Indiana lawmakers gave Hoosiers what they have been asking for months, property tax reform. The House voted 82-17 and the Senate 41-6 to cap assessments, cut taxes and assume levies, among other things. The two chambers by similar margins voted to put the tax caps in the Indiana Constitution. A number of lawmakers said while they liked the idea, just all of them acknowledged that it may be necessary to make adjustments in the legislation as time goes by.
However what I thought was most interesting is that a number of officials showed how flexible they were; not by voting for a bill they had problems with, but by patting themselves on the back while poking others in the eye.
March 14th, 2008 at 4:36 pm
“The tax increase is actually a reduction, because the increase was not as large as projected. So, your 60% increase is actually a 30% decrease”
Frank O’Bannon, 2003
“The tax increase is actually a reduction, because the increase was not as large as projected. So, your 60% increase is actually a 30% decrease”
Mitch Daniels, 2008
Bet me! If you don’t believe it, Look at your property tax replacement credit or, auto excise tax replacement credits on either statement…
Their way of saying: “Yes, we’re raping you. But, not with the full length.”
March 14th, 2008 at 5:06 pm
It is not repeal. I don’t consider this a win.
March 14th, 2008 at 5:19 pm
Thanks to Melyssa, Abdul and many, many who worked hard in different roles. It would be nice if we’re now better-off than when the bills arrived in July.
March 14th, 2008 at 6:28 pm
850 million in additional homestead deductions times an average tax rate of 2 to 3 percent is only 17 to 25 million in tax dollars state wide. That’s not alot of dollars for an entire state full of homeowners. Seems to me the legislature is trying to get credit for a big deduction, while offering a small one.
Anybody have a different take on this?
March 14th, 2008 at 6:32 pm
And what about School Building Costs? They are excluded from the tax caps, if I understand the bill correctly. With a 20 million dollar limit for referendums, there is NO protection from unlimited dollars going to building, hence no protection for HALF of our property tax bills.
In other words, there are no caps.
March 14th, 2008 at 6:34 pm
YES,
Thank you Melyssa, Abdul and don’t forget John Cochran who has worked behind the scenes for Mayor Ballard on these issues. All of you need to be commended.
Thumbs down to all the negative people over at Accidental Mayor who complain and are negative about anything positive.
Get a life Bartie’s
flipper
March 14th, 2008 at 6:45 pm
Oh Abbie, I am glad you consider this a victory. In the end, Hoosiers will all be losers. Just wait till next major budget session. Or better yet, wait till the 2012 property tax assessments. You will see just how Mississipian Indiana is. The funny part is that the law makers just shifted monies for a few years by using different colored nuts in their shell game. No fundamental government reform to improve Indiana government was passed to ensure long term budget savings. Case in point, the are too many assessors, trustees, fire and school districts and not enough consolidated government. Meridian madness seems to have subsided for now. But the Meridian St. home owners get to keep their tax dollars for now of course till 2012. I for one will vote against any incumbent until serious goverment reform is made.
March 14th, 2008 at 7:32 pm
Does the homestead credit go away ?
March 14th, 2008 at 8:32 pm
Yes! the homestead credit goes away, I think in 2010
March 14th, 2008 at 8:44 pm
Abdul,
You left out an obvious choice on your “Who is at blame for Jon Elrod’s loss?” poll — Gary Welsh.
I was excited about Elrod’s candidacy at first, but as the race wore on, Welsh started throwing up borderline racist and anti-religious rants. Since Welsh hosted a reception for Elrod in his condo, I felt that Elrod was running his “dirty” campaign through Welsh, and that turned me off.
March 15th, 2008 at 2:49 am
I too was for Elrod until I learned he was listening to people who told him to stay away from the activists and blacks. He won’t make a good representative for us if we don’t have access to him.
He had no minorities in his campaign literature or commericals.
March 16th, 2008 at 12:11 am
The following is an example of REAL property tax reform.
REPLACING PROPERTY TAXES WITH SALES TAXES
PROPERTY TAXATION MUST BE REPEALED
CURRENT
6% sales tax on goods = approximately 6 billion per year
no sales taxes are collected on foodstuffs, prescription medications, or prescription
medical devices or supplies, or prescription hearing, vision, or dental devices. This
would remain the same under the following dissertation.
I will present two anecdotal experiences on sales taxes applied to services as well as goods. However, I think that these are very realistic presentations of the current economy.
1. If you engage an electronic technician to repair your TV or Stereo or other home electronic devices the total charges might be as follows. QUALIFICATION: I operated an electronic service business for many years and the total charges for the repairs in most cases were as follows. The total repair charge was in most cases broken down to 63% service call and labor –round to 60% - and 37% for parts(goods taxable at 6%) – rounded to 40 %. Now let us apply this to the current income that is generated by taxing goods only and apply the increase of income which would be provided by taxing services as well at the current rate of 6%
The 40% is equal to approximately 6,000,000,000 per year.
The proposed 60% would be equal to 9,000,000,000. per year.
Well I guess that would cover the loss of property taxes ( 8.2 billion per year) and then some. And this doesn’t include the tax income from professional services which I do not have income information for but which I suspect would be equal to or greater than the 3-1/4 % income tax.
In my opinion, with the added income from professional services, the overall sales tax could be reduced to 3% or maybe even 2% and still provide the needed revenue to finance our bloated local and state government. And really help the lower income families in our state.
2. Let us try another non-anecdotal service payment from just the last year. The clothes dryer wouldn’t heat, so my son and I checked out the obvious things like the circuit breaker and the heating coils – both ok. So I called a recommended repair service. Their service technician determined that a sensor had failed and an upgrade “kit” was required to solve the problem. This diagnosis proved to be true and the charge for the repair was $125.00 plus $1.80 for sales tax on parts(goods). Now this breaks down to $95.00 for service call and labor and $30.00 for parts(goods) Now let us apply this to the current income generated by goods only @ the current 6% sales tax and apply the gain in tax that would be generated by a sales tax on services at 6%. The services would be approx. 80% and the parts(good) would be 20%.
20% collected would be = to approx. 6,000,000,000
80% collected would be = to approx 24,000,000,000.
I would guess that this kind of revenue would “super finance” state and local government.
Now let us cut the sales tax rate to 3%.
The income on goods would be approx. $3,000,000,000.
The income on services would be given these two examples somewhere between
$12,000,000,000 and $9,000,000,000.
More than enough to finance state and local government. This doesn’t include the tax income from personal services such as attorney’s fees, CPA fees, and consulting and lobbying fees. I think that the income from these fees would allow the lowering of the sales tax to probably 2% and still fund state and local government before we reorganize it and cut out the “pork”, “fluff”, “patronage”, and payoffs.
I also think that we should apply a “pilot” (payment in lieu of tax) to businesses and non-profits and churches which would be much less than the current property and inventory taxes. Again, PRESCRIPTION MEDICINE, FOODSTUFS, MEDICAL SUPPLIES, MEDICAL TESTS, HEARING DENTAL AND PSYCHOLOGICAL SERVICES should be exempted from sales taxes.
This formula would be a boon to lower income earners and senior citizens and a huge attraction for groups wishing to attract new business to Indiana. Just think - More businesses, more employees, and more tax payers. The state would flourish and be a leader in innovation for all other states. And all this before we reduce the bloat in government.
March 16th, 2008 at 5:24 pm
Property tax reform is not complete without local government consolidation and government cost cuts.
They totally ignored Kernan Shepard reforms and instead choose to do a tax shell game which stated goal was to break even or increases government tax revenue instead of attacking the bloated cost structure and introducing efficiencies, accountability and transparency.
March 16th, 2008 at 5:26 pm
Lawmakers Thought Process:
Car has terrible noise coming from engine.
The lawmakers solution is to buy a louder stereo.