Don't Mess With Taxes

The Tax Justice Digest, the blog from Citizens for Tax Justice, tells us that Poorly Reasoned and Poorly Targeted Property Tax Reductions are Gaining Steam.

Specifically cited in that blog are property tax proposals, affecting both personal property and real estate, in Georgia, Oklahoma and Arizona.

The problem with all these, argues Tax Justice Digest, is that "we've learned on the federal level that tax cuts simply don't pay for themselves."

Then there's the inevitable cuts in public services -- a fear voiced in Tax cap would harm schoolkids -- as states and counties have to make up for lost revenue.

But those factors don't appear to be persuading legislators or cash-strapped property owners.

Other states where property taxes are getting renewed attention include:

• New York -- Reining in runaway taxes 
• Michigan -- Rising taxes, falling values vex homeowners 
• Indiana -- Assembly passes property tax relief

I share these residents' dismay at high property tax bills. Texas tweaked its assessment and valuation system last year, and the hubby and I saw some reduction in our annual bill.

But I suspect our tax relief will be short-lived, especially since local home values haven't taken as big a hit here in the Austin area as have properties in other parts of the country. Our next assessment, even with the lower rate, is likely to get our real estate tax bill back to where it was in 2006.

In the immediate aftermath of a big property tax bill, homeowners have some options. MarketWatch's Marshall Loeb, for example, offers three steps, first published in Kiplinger's magazine, to getting your property assessment and subsequent taxes reduced.

Looking for other revenue sources: Unfortunately, the alternatives to property taxes aren't pretty either. And they're not limited to the United States.

Thickening My Wallet, a Toronto-based blogger, notes in this blog entry that his large Canadian city, like all jurisdictions, has very little revenue generating power outside of property taxes, user fees and development charges. And each has its own pros and lots of cons.

My fellow financial blogger also does a nice job of summing up the problem:

"But my one gripe about the debate on this issue is that politicians of all political stripes are selling us a dream that, over the long term, is not sustainable - pay low taxes but get lots of services. I wish the debate was framed with some degree of reasonability and a semblance of setting out realistic options that we can prioritize. Right now, I get the sense that our elected politicians think we are too stupid to prioritize if given clear choices or there just isn't the collective political courage to meet this issue head-on in a constructive manner."

Sounds like Thickening My Wallet lives right down your or my street instead of north of the border.