Will Another Tax Lawsuit Cure Heavy Tax Burdens?

The news that a tax lawsuit has been filed challenging Indiana's new system of assessing property taxes -- the result of widespread unrest over huge increases in taxes because of a decision in a previous lawsuit challenging Indiana's old system of assessing property taxes -- makes me wonder if the powers that be will ever find a solution to the problem if they can't find a way to cut back on spending.

Patrick Guinane reports on the Indiana tax lawsuit for the Northwest Indiana Times:

Like a 1993 legal challenge that emanated from St. John, the lawsuit filed Thursday challenges whether state property taxes are administrated fairly and uniformly, as required by the Indiana Constitution. But while the St. John lawsuit, ultimately decided by the state Supreme Court in 1998, focused on assessment procedures, the current challenge also alleges that property taxes support an unfair framework for financing government, particularly schools.

State government provides millions to local schools through a system that provides greater assistance to districts with large number of students from low-income families and those with special needs. The lawsuit contends this practice forces homeowners in areas that receive less state assistance to shoulder a "disproportionate share" of the cost of local government.

The lawsuit also argues it is unconstitutional to force property owners in one taxing district, such as a city or school corporation, to pay a higher tax rate than those in another district. And the suit contends some classes of property, including office towers, abated commercial and industrial tracts and casino riverboats, receive unfair breaks that shift burden to other taxpayers, including homeowners.

The simple fix would be to try to find more efficient ways of running the government and to cut back on spending to lessen the burden on Indiana taxpayers who are on the edge of revolt -- a recent unscientific online poll in the Northwest Indiana Times showed that 91% of respondents were ready to call for a Boston Tea Party in response to ever increasing property tax bills.

Instead of solutions, Northwest Indiana taxpayers face another new tax -- a local income tax bill that will start pulling money from paychecks sometime in the near future.

What Indiana taxpayers need is a reexamination of the way their government operates -- rather than fixes that just shift tax burdens without reducing the overall tax bill. Let's start looking for GUEA-style wasteful spending that benefits a few connected politicos, then move onward to the larger structural improvements -- maybe consolidating government units for more efficiency and rethinking the township governance system -- before we "cure" the problem with a 13.6 percent sales tax and a huge local withholding tax from our paychecks.

Indiana taxes government reform consolidation