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May 22, 2003 The property tax system in America has been set up to primarily support local services to the local population. These include services such as ambulance, sheriff, often educational offerings, and even such elements as mosquito abatement. People pay for the services at the local level through property tax. Property tax is one of the three pillars of taxation, which also include sales and income tax. Some states have all three, others have two of the three. Property tax has been called one of the most stable and fair forms of funding necessary services. That may be changing. An interesting phenomenon has been occurring in the arena of property tax in the past few years that is threatening to throw the property tax system out of balance. Why should that bother you? It should really bother you because the bottom line is that you will end up paying more in taxes; hence, less is available for you to spend on other more enjoyable pursuits, such as eating. What is occurring to cause you to have to pay more in tax dollars is a shift in the tax burden to individual homeowners. This shift is due in large part to the exemptions that various industries have been gaining. One of the most prevalent across the nation is the intangible exemption. This allows an industry to exempt part of their property and not pay tax on it. Industry has pushed this exemption through various legislatures across the nation over the course of the past few years, as well as various other exemptions that favor their status. In addition to the intangible exemption in general, the definition of intangibles has also expanded. There are various other exemptions that industry gets that the average citizen does not (pollution control, exemptions for agreeing to build a plant in one state instead of another, etc.). The final result is that the individual homeowner ends up carrying a bigger and bigger load of property tax each year. Big companies are able to hire very crafty lawyers and to also employ lobbyists to get the programs they want put in place. When it comes to the property tax dollar, the average citizen is the one who gets burned. For instance in one Northwestern state a large company lost a lawsuit on a property tax valuation case, so they had a lawyer write up a bill to change the situation. The lawyer wrote it up, testified on it to the state’s legislature, and was able to push the bill through. The governor signed the bill and voila!, the company is in position to pay far less in taxes. And this handy bill not only affects the particular company in question, it also benefits literally hundreds of other companies, all at the expense of the individual homeowner. This scenario is played out annually in various forms in various states. Every year the corporations seem to get bolder and more innovative in their maneuvers to avoid paying taxes. This taxing situation will continue to digress until enough homeowners get fed up with the process and seek to bring some legislative heat of their own. Certainly a media blitz is a necessity, but the main thrust should be directed pointedly at the state legislature. The point of attack for the industry has been at the legislative level, and that is where homeowners need to strike back. State legislators need to be bombarded with the views of the average homeowner. Until homeowners have a strong advocate base in the legislature (state legislature, that is, national doesn’t apply as much here) they will continue to be taken advantage of. Most people are simply unaware of what is going on, but the more their taxes increase, the more likely they are to start looking for a way to get into the action. Individual homeowners outnumber the corporations by a large count and that is where the effort should be made since legislators are elected by numbers, and kept in office or removed by numbers. Numbers count, the people have them, and should use this advantage to their advantage. When they do, things will start turning around in the property tax realm. For a start, get rid of all the myriad of exemptions that corporations are now receiving to skirt paying their share of the property tax load. No more virtually free services such as police protection, roads, etc., for these corporate pigs at the trough. ------------ About the author: Dwayne Hines currently has 12 books selling in major bookstores and writes for major magazines such as Physical and FitnessRX. Email Dwayne Hines: dhines@3dinet.com Comment on this column in the forum. ------------ |
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