August 26, 2006

USA Today Gets it Half Right on Property Taxes

Yet another major-newspaper multi-state survey of property tax woes in yesterday's USA Today. But refreshingly, Dennis Cauchon has a pretty perceptive take on the real impact of the wave of anti-property tax legislation in the states this year:
States are raising other taxes, especially the sales tax, and spending budget surpluses to replace lost property tax revenue. That makes the trend more of a tax shift than a net tax cut.
But it's not all good. Cauchon doesn't really weigh in on the (equally important) question of whether the property tax cuts (and offsetting hikes in other taxes) we're seeing around the nation are a good thing, and allows a typically misleading statement of the problem from ephemeral Idaho Governor Jim Risch to go unchallenged. Here's the quote:
Seniors on fixed incomes, however, are especially angry about property taxes because big increases could force some to give up their homes. "It hits a vulnerable part of our population, namely the elderly," Risch says.
In a nutshell, Risch is doing what leaders everywhere from South Dakota to Florida are doing this year: correctly diagnosing a problem and coming up with a solution that's got previous little to do with solving that problem. It would have been nice to see at least one critical perspective on whether there's a better way of achieving tax breaks for fixed-income seniors. (Hint: there is.)

Risch's claim doesn't withstand the least bit of scrutiny: he wants to protect the elderly, so he's going to... repeal the school property tax for all homeowners, businesses, utilities and vacation-home owners. No matter how rich, no matter where they live, no matter how old (or young). For Caddyshack fans, the Risch approach mirrors Bill Murray's method of dealing with gophers on an exclusive golf course: dynamite the place.


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