Money For the Cities
Yesterday Rob posted on Governor Hoeven's plan to cut property taxes. He plans on reimbursing counties and they will cut the taxes they collect.
As many of you know the state does not receive much of it's revenue from property taxes. In fact looking at the GF property tax statements on my desk the state only gets six tenths of one percent of the total tax bill. That money goes for specific programs.
North Dakota get most of their tax funds from individuals in two ways: the sales tax and the income tax. All citizens no matter where they live are subject to those taxes.
Governor Hoeven's plan for some reason is going to use state tax revenue to rebate local taxes. There's no justification for that. The state should rebate it's own tax payers.
The Governor's program gets even worse than that. It's a transfer of money from the rural state tax payers to the big city tax payers.
First of all farmers pay a huge amount of taxes on their farm land in comparison to what they can make with it. But farmland only gets a five percent rebate rather than the ten percent individuals get.
Secondly since the city property taxes are much higher than rural taxes the city people will get the lions share of the rebate. In order to illustrate I'm going to use a real life example of two people I know.
The rural person makes more money than the city person. He lives in the country as he is content with the basic services. His house is valued lower than the city person, but if his house was in the city it would be quite a bit more valuable. Since he makes more money he pays higher state income and sales taxes. His local property taxes which provide adequate services are half of the city persons.
In the event the governor's plan passes both the city person and the country person will receive a 10% rebate on their local taxes.. However the city person will get twice the rebate since their local tax bill is twice as high. So even though the country person pays more in state taxes the state rebate will go more to the city person. I can't imagine how anyone could come up with an income transfer plan like that.
City residents are responsible for their high taxes. They are the ones that elected the leaders that got their taxes that high. It doesn't make sense for rural residents to subsidize them for their decisions.
Believe it or not the Governor's plan gets worse. If you itemize your federal income taxes you can deduct your local property taxes but you can't deduct state sales taxes. The Governor's plan will actually result in some people paying more federal income taxes. Does it make sense to transfer money to the federal government? That's crazy!
The third problem I see with the Governors plan is that there is no guarantee the localities won't just increase their spending. Recently housing values have gone way up. Localities have chosen to keep their tax rates high and spend the windfall rather than being responsible and holding spending to the general inflation rate. We have no reason to think that local tax payers will see a savings.
The fourth problem with this is that it's not enough. North Dakota has become a high-tax state. North Dakotans do not demand the services that high tax state do. We need to keep our tradition of a frugal state government. I pay a lot more in state income taxes than I do in federal income taxes. Plus our family pays a large sales tax. I'm sure I'm not the only one who's family finances are being stressed by state and local governments.
The state should be refunding $300,000,000 rather than the Governor's paltry $116,000,000 plan. I would propose doing that in as a sales tax refund so that all North Dakotans can benefit from our hard work. That has the added advantage in not creating a federal tax liability like the Governor's plan.
As many of you know the state does not receive much of it's revenue from property taxes. In fact looking at the GF property tax statements on my desk the state only gets six tenths of one percent of the total tax bill. That money goes for specific programs.
North Dakota get most of their tax funds from individuals in two ways: the sales tax and the income tax. All citizens no matter where they live are subject to those taxes.
Governor Hoeven's plan for some reason is going to use state tax revenue to rebate local taxes. There's no justification for that. The state should rebate it's own tax payers.
The Governor's program gets even worse than that. It's a transfer of money from the rural state tax payers to the big city tax payers.
First of all farmers pay a huge amount of taxes on their farm land in comparison to what they can make with it. But farmland only gets a five percent rebate rather than the ten percent individuals get.
Secondly since the city property taxes are much higher than rural taxes the city people will get the lions share of the rebate. In order to illustrate I'm going to use a real life example of two people I know.
The rural person makes more money than the city person. He lives in the country as he is content with the basic services. His house is valued lower than the city person, but if his house was in the city it would be quite a bit more valuable. Since he makes more money he pays higher state income and sales taxes. His local property taxes which provide adequate services are half of the city persons.
In the event the governor's plan passes both the city person and the country person will receive a 10% rebate on their local taxes.. However the city person will get twice the rebate since their local tax bill is twice as high. So even though the country person pays more in state taxes the state rebate will go more to the city person. I can't imagine how anyone could come up with an income transfer plan like that.
City residents are responsible for their high taxes. They are the ones that elected the leaders that got their taxes that high. It doesn't make sense for rural residents to subsidize them for their decisions.
Believe it or not the Governor's plan gets worse. If you itemize your federal income taxes you can deduct your local property taxes but you can't deduct state sales taxes. The Governor's plan will actually result in some people paying more federal income taxes. Does it make sense to transfer money to the federal government? That's crazy!
The third problem I see with the Governors plan is that there is no guarantee the localities won't just increase their spending. Recently housing values have gone way up. Localities have chosen to keep their tax rates high and spend the windfall rather than being responsible and holding spending to the general inflation rate. We have no reason to think that local tax payers will see a savings.
The fourth problem with this is that it's not enough. North Dakota has become a high-tax state. North Dakotans do not demand the services that high tax state do. We need to keep our tradition of a frugal state government. I pay a lot more in state income taxes than I do in federal income taxes. Plus our family pays a large sales tax. I'm sure I'm not the only one who's family finances are being stressed by state and local governments.
The state should be refunding $300,000,000 rather than the Governor's paltry $116,000,000 plan. I would propose doing that in as a sales tax refund so that all North Dakotans can benefit from our hard work. That has the added advantage in not creating a federal tax liability like the Governor's plan.
Graeme
likwidshoe
Bullwinkle
robert108
CatMow
keith_glory2
Move_Zig
watashiwa
Rodney Graves
