Don't tax my money. Yours, however ...
By HOWARD TROXLER
Published July 1, 2007
One of the first things I learned in Tallahassee was a rhyme about tax politics:
Don't tax you, don't tax me,
Tax the fellow behind that tree.
It's always been that way. It's that way right now, in our debate over property taxes and who should pay them.
Really, there are two separate questions. We keep mixing them up.
The first question is simply how much government should tax, period. Most folks lately agree that local taxes have risen too much.
The second question is who should pay less and who should pay more. This is where it starts getting harder.
Our state Constitution gives a break to homeowners. They don't have to pay taxes on the first $25,000 of their home's value. And that value can't go up more than 3 percent a year.
On top of that, next Jan. 29, we'll vote on whether to give homeowners an even bigger tax exemption.
But homeowners aren't the only ones with a break.
There are hundreds of business categories and services that are exempt from the state's 6 percent sales tax, thanks to our Legislature.
And as my colleague Sydney Freedberg has documented in several articles, corporations in Florida are taxed indifferently and haphazardly, if at all.
For every one of these tax breaks, there is a strong defender. I've spent lots of time over the years listening to folks explain why they deserve to pay less in taxes than somebody else.
Consider the three main kinds of taxes: on income, on possessions and on consumption.
Each person who is affected the most by one of these thinks we should switch to one of the others.
Income? I love to get lectured by folks on why corporations shouldn't pay income taxes. ("You nitwit!" this argument goes. "Corporations just pass income taxes on to their customers!" To which I reply: "So what?")
Investors think they shouldn't pay taxes on their income, either -- after all, they are the engine of the economy and creators of jobs. They complain they are being "punished" for their investing. (How come nobody ever says that taxing W-2 wages "punishes" workers for working?)
As for the tax on property, it was deeply unpopular even before the recent crisis. I have heard from many property tax haters who say the obvious solution is a tax based on income, or on consumption.
Lots of folks who don't want to tax income or property say it makes more sense to tax consumption instead, as with Florida's sales tax, or Europe's value-added tax,
Well, naturally! The more income or wealth you have, the less of it percentage-wise you spend on taxable consumption.
If I were king of Florida, I would solve our first problem by limiting tax collections and capping the annual increase, to protect citizens from the government -- as our Legislature just voted to do.
Then I would create a universal tax system that fairly captured a tiny bit of all income, and all property, and all consumption, with a generous exemption on the low end.
Then I would be run out of the state by an angry mob.
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I'm gonna go celebrate Independence Day. The celebration I have in mind will take about a week. See you back here, and back on TroxBlog, the week after next.