Monday, August 03, 2009

Letting property tax holiday expire on schedule is NOT "raising taxes"

One of the biggest priorities (in fact, it was number one on their list of priorities) that Republicans in the legislature have pushed even with a deficit that dwarfs the Grand Canyon is the permanent repeal of the state equalization property tax.

The tax, designed to help school districts in parts of the state where there is less of a property tax base to begin with (like here in Navajo County, for example) affects all homeowners to a small degree but is mainly a tax on wealthy corporations and landowners.

Three years ago, Republicans in the legislature negotiated with then-Governor Napolitano a three year suspension of the tax. It remained on the books but was not assessed. The 'tax holiday' is now over and the equalization tax is due to come back this year.

Not surprisingly some businesses with highly paid lobbyists are complaining about this and calling it a 'tax increase.'

Which charge is complete and utter nonsense.

It is NOT a tax increase at all, even if it comes back in full force. It is a temporary tax reduction (a 'gift' from the state) ending on schedule. Three years ago this was agreed to by all parties, and if nothing is done it will revert to exactly the same rate schedule as it was being computed at then, and which it would still be if there had been no agreement on a temporary (there's that word again) suspension of the tax.

Suppose that the local grocery store where you live puts an item on sale. They advertise the sale, and tell you that it will end next Friday. So suppose that it ends as scheduled on Friday (just as they said it would) and the price reverts to what it was before the sale. Would you then be justified in storming in on Saturday and complaining to the store manager that they 'raised their prices?' OF COURSE NOT!! And if you did make that complaint they would laugh in your face (well, maybe they would be polite to you because they do want your business but you can be sure that when they met together in the back room to go over paperwork at the end of the day they'd have a good laugh at your expense.)

How is this any different? Three years ago all of us homeowers, but mainly these wealthy corporations benefitted from a temporary tax cut. What part of 'temporary' don't they understand? I understand it as a homeowner and will probably, if the tax goes by the wayside, see it reflected in my tax bill next year. But had the deal not been struck three years ago then everyone would have paid the same bill they paid then all along. So I have no right to complain.

That's the last time we should ever negotiate a 'temporary' suspension of a tax. Instead of being grateful for what they got, the wealthy corporations now think that this is their birthright, and their lobbyists have insisted on it (and the GOP legislature has complied in every version of the budget bill so far) regardless of the fiscal situation that the state is in. The tax will cover $250 million of the state's more than $3 billion deficit, so clearly allowing it to come back isn't the whole answer but it would take a nice slice out of the deficit.

And if you think they have grown used to this cut and think it is owed them, just think how ugly things will get when the Bush tax cuts expire on schedule in 2011. You ain't seen nothing yet.

1 comment:

Anonymous said...

Your rong.

when something is on sale the grocer desides when the sale is over. After that you dont have to buy it. Nobody is pointing a gun at you to make you buy it.

But you do have to pay your property tax or the goverment will take your land away.