May 22, 2007

ABC's Nightline Gives a Free Pass to Property Tax Repeal Advocate

Florida House Speaker Marco Rubio's tax plan-- which would cut property taxes dramatically and offset some of the revenue loss with a higher sales tax-- has been (correctly) criticized as a tax shift that will hit the poor hardest. But little attention has been paid to Rubio's stance on the property tax as a revenue-raising device, which is essentially that he hates it:
Should we tax the American dream? We don't tax food or medicine in Florida. Why would we tax home ownership? But we do.
The comparison is a bit silly on its face. Like our homes, food and medicine are what most people would consider "essentials"-- things we can't live without. And more and more starts now are exempting both of these purchases from their sales tax. But food and medicine are just part of each state's sales tax base. If you exempt them, you've still got plenty of consumption left to tax. (Although states exempting them have to increase the rate on everything else to keep themselves whole.) But repealing the real property tax, even if it's only done for homeowners, would basically eliminate an entire tax base. Given the zeal with which Florida lawmakers have moved to completely exempt other types of property (like intangible stocks and bonds) in recent years, it's clear that what Rubio proposes is simply wiping a tax off the face of the map.

So when I saw that ABC's Nightline was doing a story on the emerging Florida property tax mess, I was heartened. Hey Nightline, you're gonna ask Rubio to explain why repealing the nation's oldest major tax is a good thing, right? Let's hear the hard questions:

CHRIS BURY (ABC NEWS): In your heart of hearts, would you like to do away with the property tax altogether?
REPRESENTATIVE MARCO RUBIO (REPUBLICAN): I think the property tax is a horrible way to tax people.
And the interview sorta stops right there. Not the most incisive questioning.
So here's what Nightline should have asked Rubio:
1) Isn't a well-administered property tax based on a pretty decent measure of ability to pay-- the value of your home?
2) And to the extent the property tax falls short of this goal (as it arguably does when home values are skyrocketing in a temporary way), aren't there approaches, like a circuit breaker credit or assessment cap, that are demonstrably better ways of fixing this problem than outright repeal?
"Reform, not repeal" is a tired refrain. But that's because it's a pretty sensible tune to be humming. You simply can't argue with a straight face that the property tax cannot be reformed and must simply be junked-- there's just no legitimate argument to make on this point.
Which makes it a shame that Nightline didn't ask just that one hard question.


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