Johnathan at J5MC says we should in a post about a Fargo hospital becoming a non-profit to avoid paying property taxes.

While this is certianly not a happy day for the city treasurer, there could be a silver lining: The withdrawl of the city’s second-largest taxpayer might inspire Dennis Walaker [Fargo’s Mayor] to renew his call for the state to legalize local income taxes, and wean our cities and counties off of the static, and sometimes bankrupting, burden of the property tax.

To me, this sounds like a terrible idea.  I agree that property taxes are bad, but another layer of income taxes added to the already confusing and burdensome state and federal income taxes - with all the compliance issues that come with an income tax (more forms, more deductions, more regulations to follow, more tax enforcement needed to catch cheaters, etc.) - would be even worse.

Which makes me wonder why places like Fargo don’t use a power they already have to abolish property taxes.  Namely, the sales tax.  Taxing consumption is better than taxing productivity anyway, and this would not only resolve the property tax issue but also simplify the tax code by consolidating revenue streams.  Local retailers and such are already collecting a sales tax anyway, all you’d have to do is adjust it to increase revenue to replace the property taxes.

It’d kill several birds with one stone.  Taxes would be simpler, easier to collect and less burdensome to citizens.  But maybe that makes too much sense.