Tomorrow’s Election

Despite the fact that tomorrow’s election is a primary, it will essentially decide who will be the next Mayor of Philadelphia.  If polls are to be believed, it will be taken by Michael Nutter.  Despite the fact that I can’t vote in primaries, there is a ballot measure in regards to taxation that I will need to show up and vote against.

It’s basically about the Township of Middletown passing a 1% Earned Income Tax to help pay for schools, and offset property taxes.  As it is, I already pay this tax to Plymouth Township, where I work.  If it were to pass, it would just meant my money is going to the schools in my neighborhood rather than the schools where I work.  I still plan to vote no, however, on the principle that I prefer property taxes in income taxes.  I’ve never understood the objection to property taxes, personally.

10 thoughts on “Tomorrow’s Election”

  1. I used to have a 1% earned income tax where I live. Half of it went to the school district, the other half went to the township. Then we had a referendum 2 years ago to raise the income tax to 1.5% with the extra half going to open space. It failed to pass. We voted on it again last year, and even though I voted no, it passed.

    So now we’ll have a referendum from the school district to raise the income tax again to offset the property taxes. The school district says that my property taxes will be reduced by $400 in the first year and they won’t say how much it’ll be reduced in the second year and beyond. So I’m voting NO. My family just isn’t going to come out on top of that one. The school district is going to have to do a better job of forecasting how much my property taxes are going to be reduced before I agree to raising my income tax.

  2. How the hell do you tax people for open space? Isn’t open space supposed to be, I don’t know, just open? Does that cost money?

  3. I think the problem with property taxes is that it can put a property owner into the poor house by no fault of his/her own. Sales and income taxes are determined by the amount of money you spend or earn, respectively. There are different things you can do to reduce your tax burden or at least still effectively survive. You can spend carefully, or, if one is in dire straits, use food stamps.

    Property taxes are different because they values are determined by both the market and the state (okay, I admit I’ve heard rumors that properties are sometimes assessed for more than they are worth — I don’t know if it is true, though). If a lot of rich people start moving into an area, land prices will increase and so will taxes. However, the income of the original owner probably won’t increase, so he won’t be able to cover the increased taxes. In that system, the amount due could theoretically exceed a persons net income or worth.

    Understandably, the answer might be to sell the land for a profit and move. But I believe that property, once paid for, belongs to that person until their deaths. They shouldn’t have to repay for the privilege of owning it.

    So, I guess I believe that sales and income taxes represent people’s duty to society while property taxes are tools of the devil.

  4. I don’t want to give the impression that I’m a fan of property taxes, just that if given the choice between one vs. the other, I’ll take property taxes.

  5. The open space tax is a couple of things. First, it pays people who have large homesteads or farms to not sell their land to developers. Second, it buys up property away from developers. Third, it sets up parks and stuff. Many people think that the tax is going to eventually go away which is why they vote for it. “Well, once they’ve bought up all the open space, then it’ll stop…”

    No, the tax NEVER goes away. Land management costs money, and I predict that in 20 years or less, the township will sell off the land to developers.

    I repeat: If you like open space, move to North Dakota.

  6. I really, really don’t like property taxes. If the land’s yours, then you shouldn’t have to pay for the privilege of keeping it. Income taxes are less bad, but I’d prefer sales taxes. Tax what you actually spend; it doesn’t require all sorts of financial disclosure to figure out what you owe. And, it biases incentives (or, lack-of-disincentives) toward saving over consumption. (Income taxes bias away from savings–assuming dividends/capital gains are taxed as income)

    But something about paying taxes in order to keep your stuff just rubs me the wrong way. Of course, it’s probably hardest, politically, to raise property taxes, so that’s a vote in their favor.

  7. I don’t want to give the impression that I’m a fan of property taxes, just that if given the choice between one vs. the other, I’ll take property taxes.

    That’s great as long as you are working and have some control over your income.

    What about after you retire and your income is pretty much fixed? Would you rather they tax your property, the value of which can fluctuate wildly with no bearing on your ability to pay, or on your income which is predictable?

    I’ve known people who have been forced out of houses that they’ve lived in for 40 years and had paid off for 20 of them just because they couldn’t afford to pay the increased taxes. A friend of mine in the DC area had had a house custom built for his family before the boom. He had to sell it and move because during the housing boom, the property taxes become unbearable on it. Sure, he made a huge profit, but they had to buy a replacement house at the inflated market prices as well which offset most of the profits that they made. They ended up with a smaller house, not custom built with a longer commute so that they could afford the payments.

    Basically, in practice, property taxes mean that we really DON’T own our property. The government does and if we refuse or cannot afford to pay for the privilege of owning said property, they will evict us.

    Property taxes are immoral. Having to continually pay for the privilege of owning something that you already paid for under threat of violence and eviction is not taxation…it is a protection racket.

  8. There are a number of school districts that have some sort of system where retirees have a fixed level of property taxes. And if they shift it to earned income tax, the retirees don’t pay any taxes – retirement income is not earned income and often not subject to local taxes. So the retirees continue to be the beneficiary of public services and not put anything in. Sure, when I retire I might think differently, but now, while I’m still able bodied, I’m slightly bitter of The “Greatest Generation” and the baby boomers getting cushy retirements at my expense. The shift from property taxes to EI tax is another example of that.

  9. So the retirees continue to be the beneficiary of public services and not put anything in.

    I have no problem with taxation per se and I agree that everyone should pay their fair share for necessary services. My big gripe is with ongoing taxation for something that has been bought and paid for. If the government can arbitrarily come and take my “belongings” because I don’t pay them for the privilege of “owning” such belongings, I don’t really own them and they aren’t my belongings. I’m simply renting their use from the government. That is the antithesis of the concept of “personal property” and smacks of collectivism.

    I personally don’t like income taxes either. Income taxes…especially highly progressive ones like we tend to have…punish success. Consumption taxes are not perfect, but they are at least controllable to a point without discouraging productivity. If I don’t like the amount of taxes I am paying, all I have to do is tighten my budget and consume less. They also ensure that everyone pays their fair share. I don’t have to have an “income” per se to be paying taxes if you are taxing what I buy rather than what I earn.

  10. I suppose property taxes would be more acceptable if it could be guaranteed that it wouldn’t rise beyond a certain percentage of a person’s income.

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