Canards, Red Herrings, Bogeyman

Spending must be addressed first.

This is the single biggest error in understanding the Property Tax issue. There are two problems. One is out of control spending. The other is the inherent inequity of the Property Tax. Therefore, this is not an either or situation. Spending will remain an issue whether or not the Property Tax fairness issue is addressed. Controls on spending ought not to be confused with addressing the inherent inequities in the Property Tax.

The fact is eliminating the Property Tax will actually force legislators to deal with the spending issues. Here is why: They will not be able to raise other taxes to the degree and with the regularity and impunity they are used to doing. Without the Property Tax to absorb their uncontrolled spending, they will have to pay for those increases through raising taxes or just not spend so much. The former will not occur because that will mean they will then face the wrath of voter and be held directly accountable at the ballot box.

People’s taxes will have to be raised if the Property Tax is eliminated.

If fairness is the issue—fairness as in everyone paying their fair share by removing the disproportionate burden presently born by the people least able to afford it—then, yes, taxes will be going up. But not for everyone, only for those who are paying less than their fair share today. The issue is a fairly distributed and applied system of taxation. The Property Tax fails that test. Are we interested in fairness or not?

The Property Tax is a stable and predictable revenue stream, it must be retained.

The implication is that schools and local government cannot survive with the vagaries of other means of taxation. But the Income Tax and Sales Tax automatically adjust and increase revenues with the growth of the economy. The Property Tax must be raised every year to keep up with budget increases.

One question this raises is how does the state get by? When was the last time there were layoffs or a decrease in the size of state government? The fact is the size of government has grown beyond any private sector. This year’s budget battle finally put legislator’s feet to the fire. Why? Because they knew they finally needed to raise taxes in order to meet the budget. If out of control growth, retirement and union benefits had been restrained, taxes would not need to be increased.

The fact is fiscal discipline would likely be forced upon governing bodies at all levels if the Property Tax were no longer available to absorb runaway spending. Politicians are loathe to increase taxes. Restraint will be the order of the day because N.J. has run out of one-time fixes and gimmicks; the day of reckoning (brought about by both parties over the past 15 years) has come. But if the Property Tax is not eliminated, runaway spending will continue as it continues to be the means Trenton uses to absorb its fiscal profligacy.

You cannot eliminate the Property Tax. It just cannot be done.

And why not? It is only the idea that it cannot be done that prevents anyone from even considering how to do it. This is a defeatist’s mindset. People who assert such have given up before even trying. Furthermore, this point of view also says we are willing to live with a regressive and arbitrary system of taxation. Its inherent inequities and oppression of those least able to withstand it are not priorities for our society. Fairness must be balanced with how much inequity we are willing to inflict on fellow citizens.

The other reason why others declare the Property Tax cannot be eliminated is they need to hold on to this revenue cash cow. That is, they just do not want to give up a politically safe way of raising taxes.

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