Say Anything

The Bismarck Tribune has a lengthy article up today with reactions to North Dakota’s debate over property taxes from people who aren’t from North Dakotans. There’s really nothing new revealed by the article, and it wouldn’t even be worth the time to read it except that those who are opposed to Measure 2 on the June ballot (which would abolish property taxes in the state) resort to some really silly arguments against it.

We’ve heard opponents such as the Chamber of Commerce claim that Measure 2 supporters want to fire all the police officers and let all the prisoners out of jail, but not even that claim is as silly Augsberg College professor Ed Lotterman’s arguments.

While he admits that property taxes aren’t good because they aren’t based on a citizen’s ability to pay, something that hurts elderly citizens disproportionately, Lotterman claims that abolishing property taxes doesn’t really help businesses:

Lotterman is wary of other arguments made by Measure 2 proponents.

“The idea that property taxes are a real disincentive to businesses getting started, I’m skeptical of that,” he said.

If abolishing property taxes doesn’t help businesses, then why are selective property tax abatements used as an economic development tool in the state? Why do we have TIF districts and Renaissance Zones where property taxes are abated for certain people/businesses? Why are special economic deals handed out by the government to selected, politically well-connected businesses always inclusive of some sort of a property tax abatement?

Here’s a clue: Because it helps businesses. All Measure 2 supporters are saying is that the same special deals the government hands out selectively in the name of crony capitalism be given to every citizen and business in the state.

By the way, Lotterman also thinks that North Dakota shouldn’t abolish property taxes because that might make other states want to do it:

Another factor that could be lost in the discussion is the law of unintended consequences, Lotterman said. Widely used by economists, the rule generally states that the purposeful actions of people always have unanticipated or unintentional effects.

“People … structure their everyday decisions on the existing tax structures,” Lotterman said. “Suddenly, everyone adjusts.”

Lotterman said he could see other states following in North Dakota’s footsteps if Measure 2 were to pass.

“If North Dakota does this, I think people in dozens of other states would say ‘We need to do the same thing,’” Lotterman said. “The nation’s eyes would really be focused on North Dakota.”

Yeah, heaven forbid that citizens in other states might get it into their mind to eliminate a complex, highly regressive tax that is an affront to property rights. Whatever would we do?

You do have to chuckle at the idea that property taxes would create too much uncertainty in the state’s economy. It’s an argument Tax Commissioner Cory Fong has been bandying about lately as well, but it doesn’t make any sense.

Abolishing the property tax for all citizens, and all businesses, would be too chaotic but the government handing out special property tax favors and creating special zones that have different property tax policy from the rest of the state isn’t chaotic?

This lays bare what the real argument against Measure 2 is, coming as it is from the coalition of unions, big government lobbyists and crony capitalists that is opposing it. It’s not that Measure 2 is bad policy. It’s that property tax exemptions have been used to benefit an enormous network of special interests, and they don’t want everyone to have what they’re getting.