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Idaho's Weekly Journal of Local & National Commentary  Week 2714

 

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by Free Market Duck

Should Idaho abolish property taxes and implement a flat sales tax?

"Simplify, simplify, simplify...which means keep it simple, stupid."

Boise, ID Let's pretend for a moment that you want to tax everybody in Idaho, for example, for a public education system that you claim costs a billion dollars a year.  Just suppose.  What is the best way to collect the money:  through a labyrinth of voluminous property tax assessments and rules on residential and commercial property, or through a simple flat sales tax rate?

   Let's look at the pros and cons of each, from the taxpayers' -- not the state's -- point of view, shall we?

   Current Property Tax Method

Pros:  None.  We all hate property taxes.

Cons:

1.  Must hire tons of tax assessors and bureaucrats to determine, send out, and collect taxes on property.  High overhead.  Complicated.  Unfair.

2.  Property values rise during monetary inflation, thus taxing old folks on fixed incomes out of their paid-off homes.  Unfair.

3.  Commercial property taxes passed on as either higher prices for consumers or unemployment if companies can't pay.  Companies don't pay taxes; consumers pay the taxes.

4.  Judgment call on assessment of property.  Impossible to implement fairly or equally, which soon becomes a constitutional issue.

 Flat Sales Tax Method  (Assumption:  NO taxes on food and NO taxes on Internet sales.  Otherwise, no sales tax exemptions.)

Pros:

1.  Pay as you go.  The more you consume, the more you pay.  Control over your own taxes.

2.  Old folks can NEVER be taxed out of their homes.

3.  No hidden consumer tax passed on as commercial property tax expenses.

4.  Easy to determine.  Simple math, no judgment calls.

5.  Sales tax jumps to 10-15%.  That's good because now consumers can see what it really costs for government expenditures.  This helps taxpayers re-think govt spending so they can now work on chopping govt expenditures and thus chop their flat sales tax rate.

Cons:  None.  Well, Senator Hal Bunderson (R-Meridian) might cry in his soup since he's Chairman of the Senate Tax Committee.  Actually, he should rejoice.

Conclusions:  Idahonians should forget about trying to rearrange Idaho's current property tax which is a Huge Labyrinth of Nonsensical Absurdities.  Simplify, simplify, simplify.  Repeal ALL Idaho property taxes:  residential AND commercial (which you pay anyway through higher prices, dummy).  Calculate what you need for schools and other ridiculous state expenditures, and create a flat sales tax to cover the approximate costs.

   Old folks?  Hey, time to party down, grandma and grandpa.  Now you can't ever get taxed out of your own house.

   Next, do the same thing with the even more stupid and complicated state income tax, both individual and corporate.  (Remember, like sales taxes, corporations don't pay corporate taxes.  You do, since they just pass it along with all their other expenses.)  Dump ALL income taxes and wrap that lost revenue into a flat sales tax, too.  Will the flat sales tax go higher?  Yes but at least you will finally see exactly what govt expenditures really cost and then you can work on lowering govt expenditures and thus your flat sales tax rate. 

   Once again, if we have to tax ourselves to death, we might as well choose the least stupid method of taxation -- especially if it helps us finally "see the light" and put a stop to this tax-and-spend madness.  Later we can work on a 100% gold standard so the tax madness can't ever happen again. -- FM Duck

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