I have
been thinking a great deal about our nations housing
problems and some ideas that could make a difference.
Our
current property tax system is based on the value of the
property. I believe that any system based on the value
is going to be a continuous problem. Values are ever
changing this creates the need to reevaluate properties
to determine the proper tax amount to charge. Also under
the current tax system we reward groups of citizens for
the length of time they have owned the property while
penalizing newer homeowners with a larger share of the
tax burden.
The
question is how we solve these problems while giving our
local governments the funding they need. I believe the
answer is very simple the tax system should be changed
to one based on taxing the size and usage of the
property. For instance, you have a homesteaded 2000 SQFT
single-family home on a ¼-acre lot. This property is
divided in to two parts it’s land and it’s improvements.
The
land is taxed based on it’s size and it’s usage at one
rate while the improvements are taxed at another. In the
case above the owner is also entitled to an exemption
because of it’s homestead status. This exemption could
be the first 500 SQFT of the improvements to the
property would be exempt from taxation. I would also
suggest a second exemption when the owner reaches the
age of retirement of an additional 500 SQFT. The only
other issue is controlling the tax rate, which is
charged. Once tax rates are established, local
governments would be given automatic increases to the
tax rate each year by the amount of inflation for the
area. Any additional increases would require a vote by
the citizens of the county.
The
system I described fixes the following issues:
-
Equal taxation for all citizens.
-
The rapid increase or decrease of property tax
revenues because of value changes.
-
Reduced tax burden for the elderly with fixed
incomes.
-
Stabilizes revenues to local governments.
Lastly, I should note that each property type
(residential, commercial, raw land, agriculture) would
each have their own tax rate.
I
welcome any thoughts or questions you may have.
Michael W. Smith
