Property taxA property tax is primarily levied on immovable property like land and buildings, as well as on tangible personal property that is movable, like vehicles and equipment. Property taxes are the single largest source of state and local revenue in the U.S. and help fund schools, roads, police, and other services. reform in Florida is set to face the voters next January. The legislature recently passed a two-part measure that first includes immediate relief and then puts on the ballot a significant taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. reform measure for next January. From Florida Today:
Now that the politicians have spoken, Florida’s property tax debate is headed for a seven-month public campaign that could pit businesses, teachers and firefighters against state legislators and tax critics.
The Florida Legislature passed one reform Thursday that takes effect now: providing an average 7 percent tax cut to this year’s bills of all property owners and a cap on the growth of local governments.
But the biggest potential payoff for resident homeowners will be decided Jan. 29, when voters statewide will be asked to send Save Our Homes on a path to oblivion and replace it with a more generous “super” homestead exemption.
Florida Today also has an informative Q&A section on the topic available here.
Unfortunately, while cutting property taxes in the way that has been done may be the easiest tax cut to sell politically, it was not the best possible tax reform from an economic efficiency standpoint. But now that the reform has been put forth, regardless of the tax alternatives, taxpayers must ask the basic question: does the positive value of the tax cuts exceed the negative changes in public services (reduction in level and less local control combined with the added pressure to raise other taxes or impose an income tax).
Obviously, any time a tax cut is passed, spending must also be cut. That is why the biggest lobbies most likely against this reform will be public employee unions, such as teachers and police. And there will also be lobbies on the pro-tax cut side as well, such as homeowner associations. As always, voters should discount what they hear from both sides throughout this debate when it comes to those with a political agenda as both sides will likely over-emphasize the benefits or losses of the proposal.
Serious scholarship on this issue will put forth before voters a measurement of the true economic incidence of the tax cut, as well as the true incidence of the foregone spending in order to give voters a true measurement of who is hurt and who is helped and in what way.Share