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A tax on the land, or at the register?

By Howard Troxler, Times Columnist
Published February 28, 2008

Hey, if you're a property owner, how'd you like to pay a lot less in school taxes - way less than half of what you're paying now?

Wait. Here's the flip side of that same question:

No matter who you are, how'd you like to pay a higher state sales tax?

That's the latest tradeoff being proposed for Florida.

This is a different idea from Amendment 1, which the voters passed in January for a higher homestead tax break.

Instead, this "tax swap" is one of the ideas being kicked around by a group called the Taxation and Budget Reform Commission, which meets every 20 years to recommend changes to our tax system.

Here's the proposed deal: Every school board in Florida charges its own, local property tax - but also has to charge more property tax at the command of the state. This state-ordered tax is called the "required local effort."

It is calculated differently by county. But in our counties around here, it is close to two-thirds of the total school tax.

The idea being considered by the commission is to get rid of this "required local effort" altogether. That is a big pot of money - about $7.9-billion this year alone.

The Legislature would make up that difference for schools, mostly in two ways:

-By closing loopholes in the state sales tax, which is now 6 cents on the dollar. (Each county can add a local sales tax too, so the total already is often 7 cents.)

-By increasing the sales tax by up to 1 cent on the dollar.

Neither one of those methods would work by itself. As a practical matter, the most the Legislature could raise by closing loopholes is about $4-billion. And jacking up the sales tax by 1 percent would raise $3.9-billion.

So - do you think this is a good idea?

For sure, it would take a big old whack out of our property taxes, for homeowners and nonhomeowners alike.

It would end a certain amount of hypocrisy. The state would be living up to its responsibility with a true "state" tax for schools, instead of hiding behind the "required local effort."

And for those folks who think the best tax is a tax on consumption, hey, this is ideal. Don't forget, too, that part of the sales tax is paid by visitors to Florida.

On the downside, the disadvantages of a sales tax are well known. Even though we don't tax the necessities of life (food, medicine, rent), the sales tax is still regressive.

The richer you are, the less you spend on taxable items as a proportion of income. The very things that we choose to tax or not tax favor the wealthy.

Last, and I am trying to think of a polite way to say this, I don't trust the Legislature to hold the schools harmless.

If it were me, I'd eliminate the required local effort, but extend the sales tax to professional services in Florida, most of which now are untaxed. That way we could leave the sales tax rate the same, or even cut it.

But even with the Tax and Budget Reform Commission, which supposedly exists to rise above politics, that idea is too controversial. A committee of the commission voted against a services tax this week.

So as usual, we'll go with what is easy. Property taxes are unpopular. Services taxes are unpopular. Better to sock the guy at the cash register than for homeowners or professionals to be taxed. Do you disagree? Speak up.

[Last modified February 28, 2008, 00:10:27]