Dec
7
Tax Solutions, Please
Filed Under COIT, Income Tax, Northwest Indiana, property tax crisis, tax revolt
I’ve been reading various blogs trying to get a handle on Indiana’s current tax problem.
Buzzcut at Blue County in a Red State always has an opinion on the tax issue and the root causes and recently asks if state subsidizes are to blame for the seemingly unstoppable tax increases.
Doug at Masson’s Blog suggests that most of the pain has been caused by the state balancing its budget by sending unfunded mandates to the county and local levels.
Of the 24% average increase in property taxes, only 6% is attributable to local government spending. The remaining 18% was caused by a shift in the tax burden from state to local (the state balanced its budget on the backs of local government) and from business to residential property.
Now that we know the root causes — or at least have some theories to discuss — how should we fix Indiana’s tax crisis?
My suggestion — do what seems easy on paper — root out waste and corruption. In real life, I know this will be difficult. But, it is the first step toward getting our government spending under control.
Second suggestion — don’t pass a Lake County income tax.
Resisting the urge to create a new Lake County income tax is important since the state is trying to force the new tax burden on Lake County under the threat of budget cuts.
If we cave in and pass an income tax, the easy state solution to all of Lake County’s difficulties will be to force the county to continually raise the income tax. Sooner or later, we’ll end up with a 5% Lake County income tax when state money is tight or the legislators downstate need to balance the state budget.
If the state can force us to raise a new tax once, they will force us to increase the percentage taxed in the future.
Ideas one and two are the simple parts: cut out waste / corruption and cut back on spending.
Now comes the hard part.
Once we’ve cut back and resisted the urge to raise new taxes, how do we best tackle our governments’ insatiable hunger for tax money without sacrificing essential services and without bankrupting the common citizen who is already overburdened with property taxes and other financial obligations?
Let the debate begin.
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2 Responses to “Tax Solutions, Please”
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There is often an assumption that our tax burden is going up because government is being wasteful or spending money on stupid stuff. My suspicion, perhaps on an equally questionable foundation, is that the rich are getting richer as their tax burden gets lighter.
But, let’s leave those both aside for a moment. What happens when we get to a point where the legitimate functions of government cost more than the ability of taxpayers to pay for those functions? Do we start closing roads? Stop maintaining drainage ditches? Stop providing police protection? Fire protect? Sewage? Water? Courts?
And, how will we know when we’ve gotten to the point where we know we honestly can’t afford some of these essentials? (As opposed to just engaging in a satisfying amount of grousing about our tax burden as we spend ever more on our cell phones, cigarettes, and cable subscriptions?)
Hi Doug,
Thanks for the response. I’m sure in other parts of the state talk of high taxes is just grousing about the tax burden.
In Lake County there are legitimate concerns about wasteful spending designed to pay back friends and supporters of those in positions of political power.
After years of stories about people ending up in federal court after pocketing some of the millions of taxpayers’ dollars flowing through their offices, there is a ground swell of support for cutting back or maybe focusing on different priorities.
Stories of wasted money — ghost payrolling, stolen money, contracts going to the connected at inflated prices — are too common in this area. In East Chicago, $24 million went to the sidewalks for votes scandal.
The tax pain in Lake County is high. Last summer, 13000 houses were listed for tax sale in Lake County. Link in original post. And we have a cap in our county!
That’s a significant number of people who were and are threatened to lose their properties, even in a county with close to a half-million people.
Adding an additional income tax in Lake County will just be another burden that reduces the amount of disposable income in the pockets of people living in Lake County.