Keeping track of all the tax-cut ideas

The news this morning is that a vote has been postponed on the "Taxpayers' Bill of Rights" (TABOR) in the state Taxation and Budget Reform Commission. The "bill of rights" included another kind of tax cap. It would limit the increase of a local government's revenue, from year to year, to the rate of population growth, plus inflation, plus 1 percentage point on top of that. The idea also requires voter approval for new taxes and fees. The idea was strongly criticized in the Times' lead editorial this morning.

But by this point, it's hard to keep track of all the different tax ideas that have been passed and that are still being proposed. So here are the major items:

* EXISTING ANNUAL CAP. Last year, the Legislature ordered a one-time rollback of property taxes and created a new year-to-year cap on how fast  local government revenue can rise. That's the law on the books now. The cap is tied to the growth of per capita personal income in Florida. The "bill of rights" cap would be more severe.

* BIGGER, MORE 'PORTABLE' HOMESTEAD. On January 29 the voters passed Amendment 1, which creates a bigger Homestead Exemption for homeowners, allows them to carry their existing tax break to a new home, puts a 10 percent annual cap on the tax valuation of non-homestead properties, and gives business a tax break on the first $25,000 worth of tangible property.

* SCHOOL TAX 'SWAP' PROPOSED: The tax reform commission, which meets every 20 years and can put things directly on the ballot, has tentatively proposed for this November's ballot a major change in school property taxes. Most school property taxes would be abolished, and replaced by a 1-cent increase in the state sales tax, and other sources of money as the Legislature chose. The commission's decision to put this on the ballot is not yet final.

So, those are two big things that have happened, and one thing that might happen. Meanwhile, there are two other big ideas floating around out there, one of them being the "bill of rights" discussion that has been delayed for today.

The other one is simply to cap all property taxes at 1.35% of a property's value. Here's a link to a group supporting this idea, and which is trying to get it on the Florida ballot via citizen petition. This would be a pretty big cut in current taxes. This also is the approach favored by the tax protesters who were just in Tallahassee, and who got a warm reception from House Speaker Marco Rubio, with their meeting in the House chamber pictured above. [Times photo | Alex Leary]

Comments

[Bland]

Howard,

Regarding the proposed “Taxpayers’ Bill of Rights” that the Times Editorial Staff came out against in today’s edition, where was the Times indignation from 2000 through 2005 when personal incomes rose 38% and the county’s tax revenue increased 121%?

For those of us who have lived in this community since the fifties, this paper’s Editorial Staff never saw a tax it did not love to support. And stadiums too, I might add.

If by chance, the Bill of Rights proposal does go to the ballot, I am sure it will pass. Our county and city councils exhibited lack of budgetary control will be the main reason the voters will pass the legislation.

While the Times Editorial Staff believe that expanded “democratic” approval of tax increases will make local government unmanageable, I would argue that doing without increased revenue will adjust the indulgent government spending of the recent past.

Heck, it might even prevent a billion dollar boondoggle of a stadium/redevelopment project that is not wanted by the majority of the city residents.

[Buzzard]

Well said, Bland.

[Rich]

1.35% does nothing to solve the tax inequities in this state. I like the commission's proposal as a start. They need to do away with the service industry loopholes though. I don't see that happening with the retail and service lobby in place. Ideally we would go to a sales tax and do away with property taxes all together. Don't tax neccessities (i.e. food, clothing, medecine, shelter) up to a certain amount. That way the state is capped by the amount of sales tax collected. In good times they should be required to set aside a certain amount to use when recession hits. Just like their responsible citizens have to do.

A greater share of taxes would be paid by tourists and no one would have a complaint about the inequities as we would all pay the same rate. Actually the savers would be rewarded by paying less tax than those who consume more. Something that actually needs to be encouraged in todays society.

[Bland]

Rich,

Unfortunately, the State Senate would not support the sales tax proposal to do away with homestead property taxes last year.

We can only hope in the future this will occur. Times came out against that proposal as well.

[Rich]

Yeah I know Bland. I was pretty disappointed when that happened. I was hoping the commission would consider something similar but the retail and service lobby had a prescence there too.

It would solve all of the inequities in the current system, kick start home sales and cap government spending as a percentage of sales.

I'm tired of these lobby groups making the laws. Maybe we should just admit that they are the ones in charge. Stop pretending we have elected representatves working for the people.

[Bland]

Rich,

Never give up the good fight.

The sales tax proposal would have been beautiful.

Some day maybe the train will fall off the tracks and the legislature will start over again.

We can only hope and encourage one another.

STOP DIVERTING ATTENTION AWAY FROM YOUR LIES AND FAILURES, AND FIX INSURANCE LIKE YOU PROMISED “THE PEOPLE”!

[Howard Troxler]

Bland, thanks for the kickoff comment.

I agree. The central problem that led to the current "crisis" is that local government took full advantage of the ridiculous spike in property values. As a result local gov't tax collections grew far faster than any other index, such as personal income, CPI, anything.

We now have two levels of protection to keep VALUATIONS from spiking or growing as fast -- the 3% Save Our Homes cap and the 10% a year cap on non-homestead property just passed under Amendment 1.

In addition, we have a cap on total tax collections by a local gov't under last year's legislation, tied to rise in per capita personal income.

So there's MORE protection than there was before, in terms of valuation spikes and overall revenue collection. The two aspects work in concert to produce an indirect "tax cap" for each person.

1.35% is simple but I do not believe it addresses the inequity of Save Our Homes... eliminating all prop tax for sales tax is simple as well, but the sales tax structure is pretty screwed up too.

Make you a deal: have a sales tax on ALL economic transactions in Fla, except for food, medicine and housing. Use it to replace ALL property taxes, so that the entire load is born by consumption. Even then we probably could knock down the sales-tax rate.

Me, as I've said in past columns, if I were king, I would have universal, low and fair taxation on all three aspects -- assets, income and consumption. But then I would be run out of the state on a rail.

[Rich]

Trox,

Couldn't agree more. Tax consumption. Unfortunately we live in a consumer based society and the last thing they want to discourage is consumption. Bush told us to go shopping if we wanted to save the U.S. after 9/11. How is that for sacrifice? I bet the older generations felt cheated by all they had to sacrifice when they went to war knowing all they really had to do was go shopping.

Funny thing is there is one thing that this country needs to desperately do and that is to save. Taxing consumption would encourage us to do that. To bad the retail/services lobbies make all the rules in Tally.

I wouldn't tax income. That doesn't make sense to have someone pay for the priviledge to work. It's kind of a disincentive to work knowing it takes 4 months just to pay the federal government for the right to work let alone having to pay the state for the same "priviledge".

Don't tax real estate up to the median home price in any county. After that pay a one time sales tax at time of purchase. Don't tax clothing up to a certain dollar amount and don't tax food or medecine.

If only our government weren't bought and paid for by special interests. Fair and equitable taxation is not rocket science.

[Kay]

Thanks Rich. I have been very much against swapping property tax for a sales tax in the past. My mind is changing so long as it is done (as you suggest) with the inclusion of clothing as non-taxable. That is my big gripe because clothing is a necessity.