Eliminate property taxes in Indiana

August 2, 2007

Anonymous The Goshen News Thu Aug 02, 2007, 08:52 AM EDT

Editor:

On July 30 you printed a letter to the editor by a Mr. David A. Shepard who attempted to make a case for eliminating our property taxes and replacing them with graduated income taxes. Among several excellent points made by Mr. Shepard was the statement that, “If property tax exists it can raise again.” I personally believe that Mr. Shepard has hit the nail squarely on the head.

Among all the proposals that have been offered to date to provide us with “meaningful property tax relief,” nearly all of them amount to nothing more than Band-Aid therapy. One such proposal tossed around over the last few weeks, as reported in The Goshen News, proposes to cut property taxes by as much as 30 percent through a combination of tax adjustments and credits.

Great. What this means is that our property taxes will be back to where they were before we suffered this most recent, painful increase. With sales and income taxes somewhat higher, the property tax will simply have a new base from which to rise in the years ahead. This is completely unacceptable.

I believe there is another good justification for eliminating property taxes. For one thing, property taxes are based on the ultimate value of a property if it were to be sold and not on an individual’s ability to pay the tax.

A widow or a single mother with children might be sitting on a property that has become quite valuable but have limited income. The value of a farmer’s land near an expanding urban area can soar but his income from farming can be quite modest. What is he supposed to do?

The fairest tax is a graduated income tax. The size of a person’s annual income can be easily and readily measured and is probably the most accurate way to assess his or her ability to pay tax.

Most ironically, on the same page with Mr. Shepard’s letter, there was also a column by Morton Marcus titled “Property Tax Needed.” There have been times in the past when I have disagreed with Mr. Marcus and that is most certainly the case again this time.

Among many of the points espoused by Mr. Marcus was the statement that “Unsubsidized property taxes help constrain urban sprawl.” I wonder if Mr. Marcus has any concrete, verifiable evidence to support this theory. I personally suspect that the exact opposite may be the case. Urban sprawl causes land values near large cities to soar and farmers or other landowners hurt by the tax are encouraged to sell, usually to a housing developer. Furthermore, exorbitant property taxes encourage homeowners to move farther out into the distant suburbs or “exurbs” in search of communities with lower (for a while) property taxes.

The best course of action, in my opinion, would be an amendment to the Indiana State Constitution that would remove the right of the state and local governments to collect property taxes. Lawmakers would then have no choice but to find alternate and fairer ways to raise money and, if necessary, make some cuts where appropriate. Just such an amendment has been presented to the Indiana Legislature. The time has clearly come for bold action. We need real action and not more Band-Aids.

Fred M. Cain,

4830 S. 500 West

Topeka

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