State Democratic Tax Plan Is A Farce
Posted by Jeff Pruitt - 3/8/08 @ 1:43 pm - Filed Under Featured, Local Politics
The JG brings us word of the alternative tax plan being sought by Democrats in the state house. I must say it is the worst piece of legislation imaginable. I have said before that they have waited entirely too long to propose solutions and Governor Daniels has only grown stronger because of it. But this latest proposal is flat out ridiculous and likely won’t get one iota of support from the citizenry.
Watching the state Democrats on this issue just makes my stomach turn. Is the leadership this out-of-touch? Not only are they about 5 months late in coming up with a plan, but their plan is so poor that it will only make them look worse. So where does the legislation go wrong? Well it fails to address the top two issues related to property tax growth for starters.
Here are a few components that are missing from the proposal that have passed in both the Democratic-led House and Republican-controlled Senate earlier this session:
• No protection for any class of property taxpayer other than homeowners.
• No referendums on capital projects or other spending controls on local government.
• No reform of the assessment system.
• No elimination of property tax levies.
Instead, the Democratic plan would focus on homeowner relief only by using the same technique lawmakers have in the past to temporarily help, increasing a state homestead credit.
No referendum process? I thought we had finally gotten past this - the people will never stand for removing referendums. The best way to control government expenditures is to give the people a say outside the election process. Describing elections as referendums is disingenious. For one, the damage is already done by the time the next election rolls around. And two, it assumes that voters know how every candidate might vote on every issue - it’s unrealistic. It’s our tax dollars and we deserve the right to control how it’s spent. This isn’t new ground we’re breaking here. Nearly every state in the country has a referendum process.
The idea of expanding the homestead credit to grant temporary relief is a non-starter. We’ll be right back in the same position a year from now but facing even larger tax increases. Just sit down and do your damn job - come up with a meaningful long-term compromise.
“The reality is our nation is headed dead-long into a recession,” Goodin said, noting that Republicans have endorsed a plan they can’t pay for.”
“If there is going to be an economic slowdown I’m more concerned about the pocketbooks of Hoosier taxpayers than I am concerned about state government’s pocketbook,” Daniels said Thursday
I’m certainly no supply-sider but nearly every economist will tell you that putting more money back into the hands of the citizenry will help mitigate recession effects. This is the type of government-first thinking that has given Democrats a bad name in this state. Daniels is simply chewing these clowns up and spitting them out. And now for the absolute worst part of the plan:
Democrats did agree to a 1 percent cap the governor wants in the Indiana Constitution, which would limit a homeowners’ tax bill to 1 percent of their home’s assessed value.
But they exempt existing debt and school general fund levies, meaning about half of a person’s property tax bill would not be protected by that cap.
Proposing a property tax reform package that exempts the largest and fasting growing portion of our property tax bills? This is flat out stupid - there’s simply no other word for it. What has happened here is clear - state Democrats have screwed around for months without coming up with any legitimate solution. Now at the last hour, and with the governor’s popularity rising, they are trying to cobble something together but they simply don’t have enough time. I suppose if they throw enough crap something is bound to stick but my guess is it will only end up sticking to them.
Is there anybody out there willing to try and defend this garbage?
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14 Responses to “State Democratic Tax Plan Is A Farce”
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Anyone who tries to defend the Indiana Democrats and their proposal would be wasting their time typing…
The Indiana Democrats are disgracing themselves on this issue and it is going to cost them otes in November.
Mike Sylvester
How many and who will benefit under the Governor’s proposal? Based on the Ft Wayne Journal Gazette’s analysis I would say not many. Rather most of us will end up paying more in overall taxes. And to boot we will not be able to deduct on our federal return because they moved part of those taxes to a sales tax.
* No protection for any class of property taxpayer other than homeowners.
– The last I knew only homeowners pay property tax.
* No reform of the assessment system.
– Didn’t they just changed the method of assessing property as a result of a court order?
– What needs to be investigated is whether all property is being properly recorded and taxed. Are some property owners double dipping on the homestead exemption because it is in a different county?
– Taxes also went up when the inventory tax was eliminated benefiting businesses. How much in tax abatements are given to businesses that result in taxpayers having to pay more in taxes?
* No elimination of property tax levies.
– How do they expect to eliminate property taxes? Increase local and/or state income tax? Increase sales tax? All that it does is shift the taxes from one form to another. Shouldn’t property owners pay taxes that support city services, police, fire and other operations based on the value of their property? Diverting property taxes to a sales tax would not be equitable.
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Regardless of the outcome we will still be paying the taxes. The question is who and how they will pay. If the state provides the funding for the school portion of the property taxes we still will be paying it with an increase in sales taxes.
How is the 1% cap going to help taxpayers? If one is already at or near the 1% rate with the portion that is almost 50% that they are considering to have funded by the state. That will then give local government more room to increase taxes.
Referendums? How far will we go with that? I don’t want to have a referendum on everything that the city council, county council or other local govt decides to do. What will be the criteria? How much more will it cost the taxpayers to conduct the referendums? It won’t just be the cost of voting on a referendum but also the cost the local govt will incur to support the necessity.
Gary,
Businesses pay property taxes as well as homeowners and landlords
Removing the referendums is the biggest problem I have with this. Last I knew the referendum cutoff was 7 Million and I think that’s reasonable. Any expenditures above that should be voted on by the people. I think the majority of taxpayers support the extra cost associated with referendums given the extra control they receive.
And exempting school spending from the cap when it makes up the majority of my property tax bill makes no sense - it’s tantamount to removing the cap altogether.
Reports from the state level seem to be favorable to the Democrats plan.
Hoosiers want relief- and that DOES NOT happen under Daniels’ plan. It simply shifts the tax burden.
This issue is going to take a lot longer than a short session year to resolve.
Kevin,
Which reports are these? Can you provide a link? I have an extremely hard time believing this.
I think it’s arguable whether or not Daniels’ plan provides relief - obviously to some people it does although I would agree that it’s the wrong demographic.
But referendums certainly do provide relief - there’s almost no debating that. Heck, that’s why government fears them.
Sorry Jeff, but the behavior of the Democratic House is so preposterous it’s going to make me a card carrying Republican, a donor to Mitch’s re-election campaign and to ANY Republican, including Matt Kelty, who challenges a Democratic legislator in the fall.
Jeff, the feedback came during a conversation I had this past weekend- so there is no link.
Referendums CAN provide relief. But they can also prevent needed projects. At best, it is a coin flip.
Schools will be hardest hit with a referendum measure. There are already a large number of taxpayers who say “I don’t have kids in schools…why should my tax dollars be going to them in the first place”. A referendum system will only make it worse.
Gary
Businesses pay far more in property tax then homeowners. In fact businesses pay property tax based on their real estate AND they pay taxes on the personal property used in their business.
Kevin
This fiasco is going to cost Democrats votes in November. The Indiana Democratic Party looks completely unprepared for this topic and it shows with their proposals that they have unveiled nea the end of the session.
Also realize that I am not in favor of all of Mitch Daniel’s tax plan either. There are parts that make good and and other parts that make no sense.
My biggest problem with the Republican plan is their stupid idea to cap proerpty taxes at three different percentages. We should cap all property at 1%.
The best thing about the Republican plan is the referendums…
Mike Sylvester
Jeff,
Businesses do not pay taxes. They pass those taxes to the consumer.
Landlords don’t pay taxes. They pass those taxes to their renters.
What’s the difference between a remonstrance and a referendum? Other than a remonstrance only allows property owners to sign the remonstrance. What is the difference?
Their plan?
Shift child-welfare from local to state.
Shift juvenile incarceration from local to state.
Shift police and fire pension from local to state.
Shift school operations from local to state.
Shift school pension from local to state.
Shift pre-school special education from local to state.
Shift school operations from local to state.
Do you think we still won’t be paying for it? If you do you are sadly mistaken. In fact, as I stated previously most of us will be paying more as a result of taxes being shifted to sales and local income taxes. AND reduced federal tax deductions. Why should most of us end up paying $200 more while others pay $4000 less? What is the higher sales tax going to do to the economy in Indiana?
We be better off going with a graduated income tax based on income. At least the low and middle income families will have a better chance of surviving especially in today’s economy.
Gary,
Of course we’re going to pay for it - nobody is disputing that. The problem is the Democratic party has removed the one part of the plan, referendums, that actually have a chance at controlling future spending.
Recent polling shows 69% of the public supports referendums. Kevin says it can prevent “needed projects”. Who decides what “needed” is? I submit that taxpayers get to decide that and they are in the best position to do so.
We all know what we can afford and what we’re willing to support. And guess what? If the public doesn’t want to build the next Harrison Square-like project then it shouldn’t be built - period. That’s what the Democratic party should stand for - people power.
And I’m with you 100% on the graduated income tax and/or real property tax circuit breakers; I’ve been posting about them for months now. But did we hear any of that from the state Democrats? No, we didn’t hear a damn thing until this ridiculous proposal which doesn’t directly address any of the concerns you describe.
It does absolutely nothing but remove specific platforms that should be embraced - referendums and govt reform.
You and Kevin are arguing the wrong point - namely you’re arguing against Daniels’ plan. Fine, it’s not the best and I will concede that point. But the Democratic plan is even worse and I would bet my life that polled next to one another it would be defeated in a landslide. We needed our own plan and one that the people would support. The Democratic party has made tremendous progress in Indiana and now the Indianapolis Democrats are going to piss it all away.
That makes me irate and should irritate other Democrats just as much…
This is to all the taxpayers of Indiana, all who have had enough of all the lunacy. I would like to suggest an idea, that I have really not seen in our history, as a solution to the sense of hopelessness, in Americans at every level but the top. The only ideas to date, are to somehow change the system itself, to sue the system , to attempt to elect individuals and then throw them into snakepit, alone and unarmed, maybe to protest with placards and sit-ins, and then somehow think any of these might work. They all involve the need to include those in charge as part of the picture and decision making,them always having the final say, or really, the only say. Apathy, fear of the system itself, ignorance of the system, these all encouraged by the system, make the individual today truly feel as though there is no answer, they are powerless, why bother…The new approach? Use the laws, rules, regulations, and rights of the people, apply them individually, but by all to the fullest extent each has a right to , an extent the system itself was never engineered over the years to handle. Because of the bully tactics of the past decades, rights have been morphed by the bullies’ sense of invulnerability, they never think appeals will be a factor again, as so many individually have been made an example of, who would dare try to question them. Hence, no real ability to serve the questioning by the public, by silencing with power,there is no need for a process to listen really. Instead of common sense, civility and decency keeping dissent at bay, the chosen path has been for too long to use the system to crush any questioning…Taxation without representation, the work done by all to support the chosen few, King George, all seem like we are living the sequel today? Why did they fight to form this country? How did the first go-round end? What if every American, were to exercise their right to appeal every tax applied to them, at every level, and take it to the fullest extent? If even just applied at the county level to real estate taxes, as in our state, or in other states at the most local extent, with the 1000/1 ratio of taxpayer/government worker, systemic gridlock would be total, immediate, and not fixable without a complete understanding that as the chosen few, they could not do as they pleased any longer. In our state, the laws are extremely specific about our right to question taxation, with numerous levels of appeal, before reaching court.The same at the federal level, but for many, too hard to travel to the federal offices.( Imagine the surprise when 200 million extensions would come in next April 16th at the IRS, as an easy one on the federal end, done at home…Might need to order more letter openers?…) These local appeals can all be done by the person themselves, with no legal representation, filing one paper,form 130,this intitiates the process, filing 20000+_ at the same instance, per county, stops the insanity. This all done within 45 days of the next reassessment, coming next year… 20000 appeals to listen to,less than half of the taxpayers in this county, (not Marion) at 30 minutes per meeting, 80/week …Think about it…This just the first salvo, each agency has a phone line, a help window, mailboxes,all take payments(dollar bills making us all feel proud of showing how much we contribute to the cause, a check is so impersonal),and if asked,they have to send any information asked for, the opportunities could be endless…They have exacting job descriptions for each and every job in government, we all make sure they do all in those descriptions, for each and every one of us, whenever we want, to whatever extent we feel we need to ask and be informed, as they are of course, PUBLIC SERVANTS, and we the public immediatley feel like we need to be served in a manner we have been deprived of for so long. Just this idea, making the light of day, at a high enough level, explained in terms that each person would see the true ease and purity of the solution. Just letting those in charge know the possibility exists, might be all that is needed, but the process has to be in place, to let them know it can be done. If there is any real down side to my reasoning, any real reason this would not work, I would appreciate your views. We all do understand the need of taxes, we like roads, we like police, we like to know an ambulance will be there when needed…We are, truly, reasonable people, if you let us be, and become reasonable in kind…It is all the excess we have had enough of, we want our lives back, the corporate pigs and politicians have had their fill, when is it our turn? How about now?…There are kids here, who upon graduating high school, have never set foot outside our county, because of their parents do nothing but work 2 shifts, to just survive. Medical problems present that should only be seen in third world countries, in the young and old alike, but never in families of the politicians, they all have benefits….When we were kids, even the poorer families had fun in their lives, look out into the real world, and see at what income level the thought of fun ever enters into the picture any more…School shootings, suicides, perverts, rapists, murderers, think the stress of the day to day might have anything to do with it? Any possibility that as the fourth or fifth generation of single parent families now live, that the values we learned from just having parents around, have been diluted in each subsequent generation to where there is no real memory in most of what those values were? Mom or dad always working, all kids know is from TV, peers in the same boat, we need to get back to where it was , the place we remember, but the children of today think of as a funny black and white old movie….By starting with one paper per person, it could easily be over…It is time for the few to listen to the many…As on the playground, the bully relies on intimidation of the individual. But as I am sure you remember, when all have finally been beaten up, the light bulb moment appears in one individual’s mind, and the individuals then become one…My lightbulb lit last month…Time to take back the playground, eh? Pipe dream? Too simplistic? The simplicity I think is the key to success….Got to keep the lunies on the path…Perhaps our war cry? (As an aside,the abridged version, should you be interested,a permanent,easily implemented fix to all is to tie all funding for all government, salaries ,budgets etc., to an averaged per job/industry income index,like the DOW ,taken from tax data from the citizens, per occupation, business, and industry. Specific to the geographic region they govern, city data for city index,county, state, federal the same, spending and salaries adjusted yearly up or down to be in line with that average…Those in government do well when their policies work in there given region, they take a huge hit and pay cuts as we do, at the exact same rate of those who live with their decisions do. Taxes would then be in line with what the people are experiencing in their lives, same with the suffering, they would be accountable for their actions in the same way we experience it all, with the checkbook…Work harder, make it betterand get a raise,or sit and do nothing and take a pay cut or get a pink slip, the incentive would finally be there to fix it all…This for another time….They view their jobs,pay, and benefits somehow as an entitlement,let them know as we do, EXACTLY as we do, what we are living.) Just one person’s ideas, but maybe it could be the right start…
Jim,
I appreciate you taking the time to write that comment but in the future please paragraph your writing as it makes it extraordinarily hard to read when you don’t…
Jeff,
“Recent polling shows 69% of the public supports referendums. Kevin says it can prevent “needed projects”. Who decides what “needed” is? I submit that taxpayers get to decide that and they are in the best position to do so.”
Do you REALLY think that a taxpayer who lives near Dupont road (but in FWCS district) is going to support a referendum to build a new school on the Southeast side of Fort Wayne?
I am thinking the answer is no.
While I understand why you like the idea of referendums, I think that in pratical application they fail to protect those that need the most help.
One of the rules of Government is “there is a popular thing to do, and the right thing to do, and they are rarely the same thing.”
[...] to call this a compromise - it’s almost exactly what the governor wanted and nothing like the ridiculous plan put forward by state Democrats a week ago. Just so we all remember let’s recap the Democratic [...]