First state that may abolish property taxes!!!

[cyppok]

Amendment would abolish ND property taxes, order Legislature to figure out new revenue plan :: The Republic

BISMARCK, N.D. — Backers of a constitutional amendment to abolish North Dakota property taxes believe they have enough petition signatures to put the idea on the ballot, even though the number they thought they needed has risen.

The proposed amendment's supporters delivered almost 1,000 petitions, bearing what they said were more than 27,800 names, to Secretary of State Al Jaeger's office Friday.

If this happens it would be very cool, the first state to compete on not having property taxes. This adds a very interesting dynamic, if it happens.

"It's a new idea. It's something a lot of people hadn't even considered until we put it in front of them," said Charlene Nelson, of Casselton, who is chairwoman of the initiative campaign.

Jaeger has until April 29 to review the documents and determine whether there are enough names to qualify for the ballot. If the signature goal is met, the amendment would go to a statewide vote in June 2012.

They are close I hope they make it, and its put on the ballot would be first direct democracy legislature to bypass local power.

Property taxes on a person's home means he or she never owns it, even after its mortgage is paid, Nelson said. The annual property tax bill is due regardless of a person's income, while taxes on income and sales depend on the amount of money a person has to spend, she said.

The proposed property tax ban "goes to the core of the lot of the problems that people in this state are facing. Economics, low-paying jobs, seeing their young children move out to other states," Nelson said. "The public debate, I think, is going to be the most healthy thing that comes out of this."

If this happens its a really good story and hopefully will reverberate against other states for a long time to come.

[Roosveltrepub]

once again a bill cutting taxes with no replacement revenue or spending cuts. I think it's damn stupid to cut taxes w/o committing to cut spending or replace the revenue. The starve the beast mantra has been proven to be a strawman over the last 31 years since it was first heard. Cutting taxes w/o cutting spending is just bad governance unless it's over the short term fort specific reasons

[cyppok]

If you take the ability to tax, spending goes down or beuracracy implodes... Revenue implies you produce value and not subtract it via taxes, all taxation is value destructive because the price has to compensate for the share taken by the parasitic party...

You also ignore something very simple if you reduce a tax say sales tax and increase other tax to compensate you eliminate a full layer of beuracracy that deals with that tax. Ergo the property tax assessors and other layers that have to be paid can be eliminated and the other taxes increased to compensate ergo either sales or income as is said in the story (IF you read it)...

[Roosveltrepub]

If you take the ability to tax, spending goes down or beuracracy implodes... Revenue implies you produce value and not subtract it via taxes, all taxation is value destructive because the price has to compensate for the share taken by the parasitic party...

You also ignore something very simple if you reduce a tax say sales tax and increase other tax to compensate you eliminate a full layer of beuracracy that deals with that tax. Ergo the property tax assessors and other layers that have to be paid can be eliminated and the other taxes increased to compensate ergo either sales or income as is said in the story (IF you read it)...

Yeah, when did cutting taxes cut spending exactly? Like I said if they were replacing the revenue or cutting the spending I would think it fine but as it is presented it's fantasy thinking since it does neither. For 30 years we heard the starve the beast mantrra here and it's been proven false. We have massive deficits at the ferderal level in large part because no adults have been in charge and the kids in both parties had the credit cards.

[Double Edge]

What happens to school districts that get funding from property taxes ?

What happens to the upkeep of various areas ?

Those property taxes were going into something, feeding into budgets. Find it very odd that they voted on a self-imposed budget cut, unless of course there is something planned to take its place.

[cyppok]

not yet they will vote to amend the constitution of the state to ban property taxes...

They could double their sales tax to make up the difference btw.

The other thing I did not mention is the base tax on the population will fall and it will be more consumption oriented instead of a simple "your here" we tax you type of situation. If it is income and sales based it would be more oriented towards those whom can afford it rather than simply forcing all to pay it affordability be damned. You are also assuming that if the fixed burden falls ergo property taxes, people will not spend those taxes or use them in some other way which would boost the other taxes due to participation in the economy.

Lets say the average property tax is $2500 and if they are eliminated (first frozen I think) at least some of it lets say half $1250 will be spent in the economy, if sales and income taxes are put through the transactions it would make up some shortfall.
Say you buy a countertop for 1250 that gets taxed and the person who sells the countertop uses the profit say 625 to buy something else and someone else buys another thing for 312.5 in the end the shift in tax burden would let people expand the economy without worrying about base burdens and may be beneficial.

It would expand disposable income greatly even for renters since the dynamics would change. Why not privatize the schools and let people vote with their dollars? Noone voted yet, it seems like a grassroots initiative by the people in the state.

[Roosveltrepub]

not yet they will vote to amend the constitution of the state to ban property taxes...

They could double their sales tax to make up the difference btw.

The other thing I did not mention is the base tax on the population will fall and it will be more consumption oriented instead of a simple "your here" we tax you type of situation. If it is income and sales based it would be more oriented towards those whom can afford it rather than simply forcing all to pay it affordability be damned. You are also assuming that if the fixed burden falls ergo property taxes, people will not spend those taxes or use them in some other way which would boost the other taxes due to participation in the economy.

Lets say the average property tax is $2500 and if they are eliminated (first frozen I think) at least some of it lets say half $1250 will be spent in the economy, if sales and income taxes are put through the transactions it would make up some shortfall.
Say you buy a countertop for 1250 that gets taxed and the person who sells the countertop uses the profit say 625 to buy something else and someone else buys another thing for 312.5 in the end the shift in tax burden would let people expand the economy without worrying about base burdens and may be beneficial.

It would expand disposable income greatly even for renters since the dynamics would change. Why not privatize the schools and let people vote with their dollars? Noone voted yet, it seems like a grassroots initiative by the people in the state.

ND pays about the lowest per capita federal income taxes . I rreally don't see where an income tax on people either not claiming income or not making money will be much help. People arent leaving the state because of property taxes they are leaving because their is a dearth of oppurtunity. There were more people living in ND in 1930 than this year.

[dalem]

ND pays about the lowest per capita federal income taxes . I rreally don't see where an income tax on people either not claiming income or not making money will be much help. People arent leaving the state because of property taxes they are leaving because their is a dearth of oppurtunity. There were more people living in ND in 1930 than this year.

The theoretical replacement outlined for you is a consumption based tax, i.e. a sales tax. Not an income tax.

-dale

[Julie]

The fundamental idea behind the property tax is antiquated. In the 1800s, when there was no income tax and it was considered none of the government’s business how much money anybody made, the property tax served as a proxy for one’s income. This made a lot of sense then, because it was logical to assume that the citizen farming 80 acres had a higher income than one farming 40 acres.

But today, the homes of most Americans are not their source of income, but only where they live. Why, then, take more money from someone with a 3, 500-square-foot house than one with a 1,200-square-foot house?

Taxes should take into consideration the individual’s ability to pay. Today, one’s ability to pay depends far more on one’s income than on the size of one’s home.

I read where an 80 year old man had to sell his home because his waterfront property taxes had reached $5,000.00. He was a retired vet on a fixed income.

[bonehead]

The fundamental idea behind the property tax is antiquated. In the 1800s, when there was no income tax and it was considered none of the government’s business how much money anybody made, the property tax served as a proxy for one’s income. This made a lot of sense then, because it was logical to assume that the citizen farming 80 acres had a higher income than one farming 40 acres.

But today, the homes of most Americans are not their source of income, but only where they live. Why, then, take more money from someone with a 3, 500-square-foot house than one with a 1,200-square-foot house?

Taxes should take into consideration the individual’s ability to pay. Today, one’s ability to pay depends far more on one’s income than on the size of one’s home.

I read where an 80 year old man had to sell his home because his waterfront property taxes had reached $5,000.00. He was a retired vet on a fixed income.

Until very recently people have been using their homes as income and all was good until the market crashed.buying and holding a home for the long haul rarely if ever is a money loser. Even today its a safe assumption that one with a 5 million dollar home can afford to pay more than someone living in a single wide. If a millionaire gave up his mansion and moved into a mobile home to lower his tax bill, that would be rare indeed.

That being said retired and especially vets should have some insulation from rising property taxes.

[JAD_333]

I've never thought about this question. Glad it came up.

The main sources of revenue for Virginia counties and municipalities are real estate taxes and a tax on annual gross business receipts and personal property owned by businesses. They get some revenue sharing from the state.

By far most of their budget goes to public schools. If real estate taxes were made unconstitutional here, I wonder where the money would come from.

The state would have to pick up the shortfall somehow. That probably means raising the rate on income and sale taxes.

Might be a good thing. People around here sometimes lose their homes because of unpaid real estate taxes.

The thing in ND is, lots of people own farms, and lately the value of farmland has jumped--doubled and tripled in some regions due to rising commodity prices. All of sudden farmers are facing steeper tax bills. If they're retired or don't farm their land, they stand a good chance of losing it. Something to think about.

[Gun Grape]

This will be a killer for local governments if the State laws are like Floridas.

Property taxes go to the local government within the county and city. Its the funds that the county uses to provide services. Roads, Fire, Police,EMS, jails and all the way down to operating the local garbage dumps are funded solely through property taxes. Except schools which receive a percentage of the state lottery funds that equal 6% of their total funding. The other 94% come from property taxes.

If the local governments wish to institute a tax, (sales /gas/bed) that tax must be voted on by the local residents, the tax can only be used for a specific purpose (no "General operating fund" stuff) and can only be for a set period of time.

The other source of income for local governments are business and permit fees. These can be voted on by the ,in our case , County and City Board of Commissioners. Start piling on "Impact Fees" to building permits and you price new businesses and people wanting to build a home/do home improvements out of the market.

It sounds great, No property tax means that the county will save tax dollars since they can get rid of the Property Appraisers office. Saving money already.

But those property taxes also fund things like the Planning Dept. Here the planing dept writes and submits the County Comprehensive plan. Without that, you don't get State or Federal funding. So there goes replacement fire trucks, or the new fire truck for the rural volunteer fire dept , ambulances, bridgework, updated 911 systems and a whole slew of stuff that people normally don't think about.

I hope the voters research what the real cost of this Amendment will be.

ND property taxes may go to the State and be handed out statewide. But if it is the primary source of local funds, they could easily end up screwing themselves.

[Gun Grape]

The thing in ND is, lots of people own farms, and lately the value of farmland has jumped-doubled and tripled in some regions due to rising commodity prices. All of sudden farmers are facing steeper tax bills. If they're retired or don't farm their land, they stand a good chance of losing it. Something to think about.

Florida helped to keep that fmrom that by Amendment. No matter how high the property values jump, Property taxes can go up a maximum of 3% or the percentage of the annual increase in the CPI-U whichever is lower.

We also have "Homestead exemptions" for people that have owned property that they reside on to keep taxes from going through the roof. Also exemptions for Senior Citizens and disabled homeowners.

[JAD_333]

Florida helped to keep that fmrom that by Amendment. No matter how high the property values jump, Property taxes can go up a maximum of 3% or the percentage of the annual increase in the CPI-U whichever is lower.

We also have "Homestead exemptions" for people that have owned property that they reside on to keep taxes from going through the roof. Also exemptions for Senior Citizens and disabled homeowners.

I think we have something like that here. I wonder if the max increase rule carry over when a property changes ownership.

[Gun Grape]

I think we have something like that here. I wonder if the max increase rule carry over when a property changes ownership.

Here the Max increase rule applies but It would be off the new assessed value.

Which means that you can have 2 identical properties side by side and one, because the owner has lived there for a long time (only takes 3 yrs for the Homestead exempt to take effect though), will be paying 5X more property taxes. The long term owner being taxed on maybe $100K, and the guy that bought during the boom paying taxes on 1.3 mil.

Yes property prices got a little crazy for a while