If it's a bad idea to use property taxes to pay for road repair, what else is there? How about the never-used wheelage tax? It is a more proportional and fair tax than basing it on property values. It's not a bad idea.
posted by MN Politics Guru @ 18:28
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3 Comments:
Is it more fair? According to the NPR report I heard, the tax would be very regressive. For example, say you have person A living in an apartment (assessed at $50,000 for property tax purposes) with 1 car and person B living in a $200,000 house with 1 car. Each would pay $10 (for example) in a wheelage tax, but the net tax on the apartment dweller would be much higher. Property taxes would be reduced pro-rata, so that the apartment dweller would get roughly $2 in property tax reductions and the home owner would get $8.
First, I'm not saying the tax is good because it is progressive; it's not. However, think of another situation: an apartment dweller with no car and a suburban dweller with three. Why should the car-less apartment dweller pay a lot for maintenance?
Also, keep in mind that apartment buildings are taxed at a higher rate than single-family dwellings. The property taxes paid on a $200,000 homestead aren't four times the property taxes paid on a $50,000 apartment, so it wouldn't be an 80/20 split in tax relief as in your example.
The tax itself is not a bad idea, but as I understand the statutory authority, taxes raised from the wheelage assessment have to be refunded on the property tax side. The wheelage tax is inherently regressive ($10 for a Lexus or a '63 Dodge Dart). Making matters worse, the property tax refund is also regressive. In general, this plan simply shifts the cost of building roads to the working poor.
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