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Idaho’s Property Tax – Can We Live Without It?

January 30th, 2007 by Halli

A recent letter to the editor in the local newspaper suggested doing away with property tax completely, as it is the most unfair of all taxes levied in the state of Idaho, especially property tax levied on personal residences.

Think about it: once you purchase your home, unless you rent out a room or sell it, you do not generate any income from it. Yet the value of your home (especially in Idaho) is likely to go up every year, increasing the amount you are charged in property tax. This is especially difficult for those on fixed incomes.

As mentioned in a previous post, it may actually be argued that no one (besides government) owns any real property in the state of Idaho. If you doubt that statement, see what happens when you fail to pay your property taxes. Perhaps property tax would more accurately be labeled “rent payment”.

The writer of the letter suggested raising the sales and income taxes to make up for the repeal of property tax. At first glance, what may appear to be a revolutionary idea has already been done, in part. Remember the special session of the legislature called by then-Governor Jim Risch in August, 2006? The action taken there removed the schools’ maintenance and operations budgets from property taxes, and raised the sales tax from 5% to 6% to make up for the loss. (It still remains for the legislature to actually appropriate those sales tax dollars from the general fund for school support.)

Why couldn’t the entire amount currently raised by property taxes be shifted to other taxes? Wouldn’t that be more equitable, since not everyone owns property?

Yes, I know that renters do pay property tax, but not directly. Renters are generally quite insulated from the entire notion. Let them pay more in sales and income tax.

Visitors to each Idaho city drive on streets and roads (and use other city services as well) paid for by property taxes. Why not let them contribute more through sales tax?

Obviously there are many problems to work out with such a proposal, but perhaps there is promise in the idea. And perhaps all letters to the editor aren’t from crackpots!

Posted in Education, Idaho Falls Issues, Idaho Legislature, Politics in General, Property Rights, Taxes | No Comments »

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