Tax

Indy has been in turmoil lately over their property tax reassessments. Most people don't pay much attention to such things until they get a tax bill with a big increase, which is pretty much what happened in Indy. And down here everybody's nervous, because our bills haven't been sent yet. It's almost certain that the property taxes here will go up for almost everybody, and people are hoping they don't double like the poor residents in the Indianapolis area.

Mitch ordered a review of the assessments in Indy, plus a couple of other counties. It could partially be a political decision to dampen down the level of anger, but he says there seems to be some evidence that commercial property was undervalued, shifting a bigger burden to homeowners.

The larger problem of taxation goes to all levels of government and all types of taxes. Government exists to perpetuate itself, and bureaucrats are driven by a desire for personal power rather than the public good. Politicians argue about how high the tax rates should be on "rich" folks, but are strangely silent on the question of whether they're spending the tax money wisely.

The proponents of the "Fair Tax" plan, which would eliminate federal income taxes and replace them with a national sales tax, have some decent ideas. But they're fighting an impossible battle against the very system used by our politicians to keep them in office. It's not going to happen.

I think the best solution is a very simple one. It would probably require a constitutional amendment at the Federal Level to be enforceable, but here's the idea: The law of the land should simply say, "No citizen or for-profit organization may be exempted or relieved of any tax levied by federal, state, or local government entities."

Ever seen the Federal Tax Code? Know why it's contained in such a gigantic volume? Because it's loaded with exemptions, rebates, credits, and other considerations given to specific individuals and businesses. Not by name, because that would be gauche. But with a description of the person or entity being exempted worded in such a way as to remove all uncertainty about who's getting the special exemption.

Why do they exempt certain corporations and individuals from taxes? Because those individuals and corporations help insure the congressperson who inserted the exemption in the tax code is re-elected. Not a bad deal for a businessperson, really - all he has to do is contribute $100,000 to the campaign, and he'll get a $200,000 tax break. It's corrupt. And it's a way of life for our legislators.

It happens at the state and local levels too. Honda is building a new plant nearby in Greensburg. The governor and other state and local politicians get to crow about their great success in attracting this big Japanese automaker to Indiana. What do you think they offered to help incent Honda to locate in Greensburg? Tax exemptions, of course. Ever heard the term "Tax Abatement"? It's a simple device used to favor certain businesses. Honda's probably getting free infrastructure (roads, power, water & sewer, etc.) from the state as an added bonus.

Imagine what would happen if the law were written as I suggested? Nobody - no congressman, governor, mayor, city councilman, could hand out any tax favors to anybody. Honda would have to choose their sites based simply on the best place overall for them, not on how much of a tax break they're getting. I think it would force legislators to be more responsible in their tax policies, and maybe even rethink their wasteful spending habits.

Unfortunately, this idea likely has no better chance of passing than the "Fair Tax". For the same reasons.