A new and interesting proposal has surfaced in the debate concerning the extreme inequities associated with the current "Save Our Homes" property tax system (aka, "Screw The Children").
The basic concept: all homeowners would no longer pay taxes on their primary residence, and all other properties (rental, commercial, investment, vacation) would still have property taxes, but have an annual cap on increases. The difference would be made up by increasing the sales tax to 9%.
From today's St. Pete Times.
'TALLAHASSEE - House Republicans are developing a proposal to eliminate property taxes for all homesteads while increasing the sales tax by a few pennies to make up the difference.
The plan, which has quietly gained favor among House leaders in recent days but lacks detail and has yet to be announced, also calls for capping property taxes on businesses, second homes and other nonhomestead property.
The cap would likely be tied to population growth and inflation.
"Everyone's pretty excited about it," Rep. Anitere Flores, R-Miami, said after emerging from a property tax summit in the House on Monday afternoon.'
Like we've said, it's been a bear of an issue, because I can personally attest to how f-ed up the current system is. The house that I'm currently living in (a starter home built in 1994) is paying $5500 a year in taxes, while a neighbor across the street is paying only $2200 a year. This is just plain wrong - in so many ways. They have to do something.
'Property taxes promise to be the most challenging issue in the Legislature's upcoming session, in part because of the inequities in the current system, which favors long-term homeowners over new residents while pushing more of the burden on nonhomestead property.'
Right - so here we go!
'An increasing number of lawmakers feel the best remedy is to simply get rid of property taxes homestead owners pay to schools, cities, counties and special taxing districts. The idea is contained in House Speaker Marco Rubio's book 100 Innovative Ideas for Florida's Future.'
On the surface, it sounds like a very intriguing idea, but there are numerous drawbacks. Starting with the fact that a consumption tax is regressive, whereby the poorer you are, the higher % of your income goes to the government. So, out goes the reasoning for the SOH tax system that protects the old ladies on fixed incomes.
That aside, there are other concerns.
'But an increased sales tax could hurt businesses in North Florida, where shoppers could go to Georgia or another state. Also, sales taxes hurt the poor more than other income groups. Vacationers, too, would pay more to visit Florida.'
Can you imagine being an appliance seller or car dealer anywhere within 200 miles of the border? Those businesses would get killed with a 9% sales tax. Also, do we dare tinker with tourism, our #1 business?
Still, I like the idea - thinking way outside the box is a good thing, especially in times of crisis. Don't know if the voters will go for it or not. What do you think?