For the past several years, a group of mostly conservative thinkers has advocated patriotic-sounding Property Tax Independence Act, In a bid to make themselves sound like the Founding Fathers, they call their bills HB 76 and SB 76. Their logo also is surrounded by 13 stars. I guess that's in honor of the 13 original states or something. Basically, their plan is to phase out property taxes over two years and then play their fifes and drums and recite the Pledge of Allegiance.
No question about it, property taxes are unpopular. They are particularly unfair to seniors on fixed incomes.
But SB76 and HB76 are just tax shifting proposals. According to The Wharton School economist Robert Inman, the property tax is probably the fairest of all the taxes imposed by local government. His basic argument is that all taxes are bad. But as we all know, they are a necessary evil. He explored which taxes do the least harm. Believe it or not, it's the property tax.
According to Inman, the fairest way for a City to tax is by moving from a mobile to an immobile tax base. Commuter taxes, wage taxes and gross receipts taxes just drive business and jobs away. Lowering the wage tax will result in more job, more income and encourage people to live where they work by investing in real estate. He would increase real estate taxes, but homeowners who live in their homes would be afforded a partial exemption.
All of this was in a 2009 Task Force recommendation that was never implemented.
