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This note was originally a response to Pacalady on the thread of "Possible move to Idaho." However, as soon as my venting was done, I realized I had probably move the note to a new thread, so as not to hijack!
The subject is one that always brings out the emotion in the Idahoan: taxes.
Let's see if what I jotted down late at night resonates with you or even me when my mind has more clarity...I am genuinely interested in this topic, so I would appreciate more serious responses rather than conspiratorial rants (although good jokes are always welcome!).
State Income Tax. As Pacalady suggested in an earlier comment, I also feel that for now, we Idahoans have a smaller tax burden than in other states. But...I think that for Idahoans, the income tax will become a bigger issue going forward. Why? Our median income remains at very modest levels. As a result our taxes have been modest. However, you'll note that our tax brackets are severely progressive. As our state inhabitants increase their income going forward and increase demands on social services, you'll start to see our standing as a low-tax state fall in the state rankings. Combined with the fact that we groceries, I guarantee you, tax reform movements will become the order of the day. To retain the feeling we have of lower taxes, we will need lawmakers who recognize the need to make the tax brackets flexible to our growing state and income. If not, taxes will get steadily worse.
Here are some other random thoughts on our fiscal state of affairs... Property tax. Our rates are quite terrible. However, we receive a very generous homeowner's exemption to counter the high mill rates. While the net effect is neutral for homeowners, it is punitive to businesses which provide jobs. Why not lower the rates and wean ourselves off of tax relief via exemption?
Property tax assessments. A sore spot locally. Those in the city with middle class homes have assessments that are very close to real time estimates of their properties. At the same time, those off the grid, with large holdings, or in very posh homes, have assessments--on average--that make less sense in terms of the market. I hate the idea that we have built in imprecise information as a matter of standard operating protocol.
If a property is worth $1m, the gosh darn it assess it at that value. We do exactly that for $200K houses. Where adjustments need to then be focused is in the amount of that assessed value to be taxed. I am more amenable to the actual taxable assessment to be different. Why should it be any different? The market value for land, high end, or rural homes is often not so clear. The guiding standards should be that taxes collected should be fair, flexible to different types of property, and defensible in terms of the burden each property presents to city & county administration for which taxes are raised.
So while the present system had problems, I would not be in favor of using property taxes as a proxy for income taxes. If we go in that direction, I predict we'll head towards Prop 13 type movements. In lieu of using housing for de facto income taxes, I would rather we assess an inheritance tax at time of passing on the property. This means that the senior citizen living in the home in their golden years would not be worried over losing their home, but that at the time of inheritance, heirs pony up accrued taxes for the property.
Income tax. It is time to widen the brackets and raise the low end end bracket. This would help all families not only for the present but for the future, as it will reduce incentives to migrate once income rises.
Sales & Income Tax. I would rather see consumption taxes than simple sales taxes or higher income taxes. This would shift a larger chunk of the tax burden to those who have a larger consumption footprint, while providing added relief to young families and those with lower incomes. The current tax on groceries is as regressive as one can get. Terrible.
Other taxes. Finally, I would like to see a summer tax premium go into effect. Throngs of tourists place a great "tax" on my community and on the welfare residents obtain from the summer months. A premium of 1% can be added on to fuel, hot food, retail, lodging, bars, etc. Revenues from the summer tax can be ear-marked to fund local schools, social services, protecting our lake, beautifying tourist access points, and maintaining our public spaces. A good chunk of the burden of those taxes would be paid by out-of-area tourists who should be encouraged to spend heavily as a way of protecting our beautiful corner of the world. Summer businesses should not only recognize the stress these people place on our infrastructure and the crowding out of our summer well-being, but should line up behind a modest tax that can serve as a fairly inelastic mechanism with which to lower taxes in other areas or fund other projects to keep SP healthy and fiscally sound.
And if you are worried about tax reform growing government, this need not be the case. Funds can be earmarked, i.e. dedicated. Rates can be set to be tax neutral. As the unfairly-maligned Alexander Hamilton recognized after the Revolutionary War, improving the fiscal logic of the country is not only the best way to preserve the integrity of the union, but the best way to preserve individual liberty. By ignoring tax reform and the realities of governance, we only empower those who will usurp our tax codes for their own private betterment--with the public ultimately shouldering the burden, a burden on which they exercised little to no voice.
Have you seen this?
SR.com: Governor calls for Idaho gas tax hike (http://www.spokesmanreview.com/breaking/story.asp?ID=18071 - broken link)
Governor calls for Idaho gas tax hike
Betsy Z. Russell
Staff writer
December 4, 2008
BOISE - Gov. Butch Otter informed legislators today that Idaho needs to raise its gas tax, increase car and truck registration fees, tax rental cars and more to fund pressing transportation maintenance needs around the state.
“What will be revealed in January is whether we have the political will, the political courage to make the choices that are needed,” Otter said in a speech he planned to deliver to the Associated Taxpayers of Idaho today, but because the governor is suffering from bronchitis, his chief of staff, Jason Kreizenbeck, delivered his prepared remarks for him.
Key details still are missing – including how much Otter will propose in gas tax hikes – but here are the main points of the transportation plan he unveiled today, to an audience that included much of the Legislature:
• He has ordered the Idaho Transportation Department to immediately cut its administrative expenses by 6 percent. The department, because it receives no state general funds, wasn’t subject to the recent holdbacks on the state budget. The governor also wants a group of business leaders to advise the department on efficiency, and is looking for savings pursuant to a legislative audit that’s soon to be completed.
• Both Idaho’s gas tax, which has stood at 25 cents per gallon since 1996, and vehicle registration fees would be raised, with the increases phased in over a five-year period. Said Otter, in his prepared speech, “We’re trying to accomplish 2008 goals with 1996 dollars.” The registration fees alone would raise about $15 million the first year, and would continue to charge differing fees based on the age of the vehicle, like current registration fees. Otter also wants a tax on rental cars, “other internal steps” to shift money to road and bridge construction, and a task force to study Idaho’s truck registration fee system. Truck registration fees also would be raised in the coming year; the task force would recommend additional steps for future years to improve equity. “The bottom line is generating significant and reasonable ongoing revenue,” the governor said in his speech.
• The governor wants sales tax revenues from the sales of automobiles, tires, auto parts and related items tracked, as a possible first step toward tapping into some of those funds for transportation. Idaho currently devotes none of its general fund money, which comes largely from sales and income taxes, to transportation, relying instead on fuel taxes, registration fees and federal funds.
Initial reaction to the governor’s transportation proposals from legislators was mixed, but mostly positive.
“I’ve said all along that we need to focus at least on maintenance, so that we don’t fall farther behind,” said House Speaker Lawerence Denney. He joked, “With the volatility in the gas prices right now, if you didn’t report on it nobody’d notice that we’d raised it 10 cents a gallon.” But, he said, “With the down economy it’s going to be a tough sell.” He praised the governor for looking to user fees for funding.
Senate President Pro-Tem Bob Geddes said, “I think the governor showed some tempering from what his position was last year. … I think the governor is ready to come up with a package that works for not only the Department of Transportation, but for the people that have to pay for it.” However, he said, “I don’t think the crisis was created because we have 6 percent too much administration. I think we could run a little leaner in administration.”
Senate Education Chairman John Goedde, R-Coeur d’Alene, said, “My ears went up when he said he was going to start tracking sales tax revenue from motor vehicle-related sales, because anything that could get deferred from general fund revenue to transportation would have a definite impact on education. I see education as the catalyst that, when our economy turns, will springboard us into the limelight. We have to have workers that are ready to take the jobs that are already there.”
Senate Transportation Chairman John McGee, R-Caldwell, said, “I think it’s a good first step. The governor has now outlined what I think is a well-balanced approach to solving the problem. I like the part about accountability. If we’re going to ask for more money, then we have to make sure it’s spent right.”
House Assistant Minority Leader George Sayler, D-Coeur d’Alene, said the governor’s proposals are “kind of a consolidation of what’s been talked about the last year or two. I do agree that we need to increase the fuel tax – it was a mistake at the time probably not to adjust it” for inflation when it last was raised in 1996. Sayler said the accountability piece is important to gain legislative approval, but most of all, “We need to be adequately funded.” Fixing the transportation system, he said, “should help us get out of the hole a little sooner.”
Hi MistyRiver...are you the same one who introduced me to this forum? You don't have to admit it publicly!!!
So, Idaho wants to be like every other state? Higher taxes every which way you turn? Stronger government education, better roads, more funding for programs?
Simply the code, maybe. Flatter, fairer? Ok. Don't become like everyone else.
I think property taxes are an insult to private property rights...try not paying them and see if you own your property. Income, pretty much the same thing...we prohibit creditors from creating debtors' prisons but yet the government can toss you in prison for not paying a 'voluntary' tax.
Frankly, the only fair tax is a flat sales or consumption tax, maybe with exemptions for edible food products only. It's nameless, completely voluntary, and requires the government to trim up when the economy is down, just like all of us. Michigan "needed" to raise taxes recently, almost identical to those you're discussing, and we've been experiencing an economy on the level of post-Katrina Mississippi and Louisiana and we still have a massive budget deficit.
I don't need an excellent education system...my kids will be home-schooled. I don't need awesome roads...I drive hardy vehicles and take it slow, plus, don't need the tourists. Dirt roads work just fine in all conditions. I'm becoming more and more self-reliant - - - don't need the programs. I'm attracted to Idaho because of the opportunities for self-reliant, rugged living.
Going mainstream will only attract people who don't share those values. I suggest the opposite direction...eliminating most taxes altogether, consolidating to a single tax, so people can know the true taxes they pay and have a choice. Maybe I'm missing the point...it wouldn't be the first time.
Last edited by martialcanine45; 12-05-2008 at 01:30 PM..
^^
Perhaps you can anoint yourself a Baron or a Duke and enjoy the benefits of aristocratic life in the Middle Ages because if Idaho followed your advice, we would be turning the clock back about 1000 years. Why settle for a hardy vehicle when you can ride your horse to town, your lordship. And home schooling? Who needs books and social skills anyway?
Hmmm. That sounds pretty bass awkwards even for me....
No tax is every fully repealed. It should take a 90% majority to pass any tax increase. That way only the truly popular taxes will be passed. (chuckles)
^^
And home schooling? Who needs books and social skills anyway?
Hmmm. That sounds pretty bass awkwards even for me....
My daughter is homeschooled and she has excellent social skills and is getting a far more rigorous education than the local school could provide; in fact, she's getting a better education than most public schools anywhere could provide.
As for books...what about them? We have plenty and between Amazon and Abe, more are always on their way and when we're done, we donate them to the local library.
^^
Perhaps you can anoint yourself a Baron or a Duke and enjoy the benefits of aristocratic life in the Middle Ages because if Idaho followed your advice, we would be turning the clock back about 1000 years. Why settle for a hardy vehicle when you can ride your horse to town, your lordship. And home schooling? Who needs books and social skills anyway?
Hmmm. That sounds pretty bass awkwards even for me....
You want public schools? Pay for your kids to go; they can get their social skills in an undisciplined atmosphere with kids whose behavior is abhorrent being taught God knows what. You need pristine, pretty roads? Pay for them.
But why is it that I should have to pay for things I don't need but you WANT? You're so eager for them and the higher taxes, voluntarily send in a check to the treasury. Do it, today. I challenge you.
My siblings and I grew up dirt poor, but are all relatively successful, involved in church and community, and well-adjusted (whatever that means). We got out and did things we enjoyed, socialized with people who had the same interests, and didn't spend our lives in front of an XBOX or PS3. Before you knock home-schooling, you should double check performance test scores and college GPA studies.
I support consumption/sales taxes, because someone like me who is self-sufficient and doesn't use many of the services will only be paying for the necessities.
But this exposes a problem with modern society, we want this or that without having to pay for it ourselves. Would you ever go to your neighbor's house and demand $1,000 for your kids education? Probably not, but you'd extort it through taxes that always seem to need to go higher and higher and higher?
For what? So, we don't fall behind "the times", get unsocialized, become dumb, or miss out on a pristinely-smooth road trip to McD's?!? Sounds like we're already there my friend.
How many public schools are out there around this country that you WOULDN'T let your kids set foot in? When's the last time that public education actually did it's job and did it well? Let me guess, they need more money.
How many problems have trillions and trillions and trillions of tax dollars ever fixed? How many economic crises has the government not prevented in the last decade alone? How is the war on poverty going for you?
I am middle class, work hard, but enjoy a very comfortable life...not of material comforts but things a public school, government agency, social network, and tax increase can't provide, like close-knit family, fulfillment and contentment arising out of self-sufficiency, helping family and neighbors out...the rewards are endless.
You keep depending on the government for your needs....they are the real Barons and Dukes holding you and everyone else back from fulfilling our real potential, confiscating our personal wealth in return for nothing.
My daughter is homeschooled and she has excellent social skills and is getting a far more rigorous education than the local school could provide; in fact, she's getting a better education than most public schools anywhere could provide.
As for books...what about them? We have plenty and between Amazon and Abe, more are always on their way and when we're done, we donate them to the local library.
It's the typical statist view of the world. Nothing can be done right unless it is taxes and regulated by government bureaucrats. You are almost considered a fundamentalist cultist whacko if you home school children in California. I read more in a week now than I did my entire tenure in California public schools.
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Don't raise taxes Idaho
