Detroit News: Finley Calls it Right - Vote NO!

Nolan Finley
A tax hike is a tax hike is a tax hike

Many of the local communities and school districts that are asking voters to approve millage increases Tuesday have struck on a clever marketing approach: position the hike as a tax decrease, because plunging property values will result in lower overall tax bills this year, even at the higher rate. Expect the gimmick to catch on as governments scramble to replace revenue lost to falling assessments.

Technically, it's only a paper fib -- for now. Average property tax bills in places such as Troy, Bloomfield Township and Berkley may be lower this year even if voters approve millage increases to support school repairs and government operations. But that's just this year.

When property values begin climbing, tax bills will rise as well. If you pay more in taxes if the proposal passes than you would if it fails, that's a tax hike.

Exploiting this brief period during which assessed values finally drop below taxable values is opportunistic, and reflects insensitivity to the plight of Michigan residents. Homeowners have been waiting for the consolation of lower property tax bills to assuage the pain of mortgages that are underwater and home prices that have dropped in half.

Their windfall is finally arriving, and the politicians want to claim it.

But do these leaders think at all about the people who will pay the tab? Homeowners here have lost a big chunk of their personal wealth due to the real estate bust. They can no longer get home equity loans to pay for things like college tuition. They can't count on the sale of a home to fund a retirement.

Many are struggling just to hang on to their homes. Michigan continues to rank in the top 10 states for mortgage foreclosures. One in 38 households is in foreclosure.

And yet local leaders think this is a fine time to hit up homeowners for more taxes. Instead of seeing a remedy to the foreclosure crisis in lower tax bills, local officials see only an answer to government's problems.

The same is true at the state level, where Gov. Jennifer Granholm has proposed a $1.3 billion expansion in the sales tax.

The debate in Lansing centers on election year politics, the impact on the business climate and partisan philosophical differences. I haven't heard anyone talk about the hardship on the people who will actually cough up that $1.3 billion.

Those Michigan taxpayers are among the most troubled in the nation. Nearly 15 percent of them are workers who've lost their jobs and can't find another. More than 20 percent live below the poverty line.

They've watched their household incomes fall 2.4 percent last year, and now earn 11 percent less than the national average.

And the governor thinks these folks can afford to pay more taxes?

The sales tax is the most regressive tax. It applies to all money spent, even if it comes from welfare checks, unemployment checks or dwindling pension checks. The people least able to pay are hit the hardest.

While willing to ask struggling homeowners for more property taxes and suffering residents for more sales taxes, neither the state, local communities nor school districts are willing to demand enough sacrifice of public employees, whose overly rich pay and benefits necessitate the tax hikes, or to cut off the special interests that feed off government.

Let government go to where the money is -- its own employees and bloated bureaucracy -- to solve its fiscal problems. The taxpayers are tapped out.

Nolan Finley is editorial page editor of The Detroit News.



From The Detroit News: http://www.detnews.com/article/20100218/OPINION03/2180341/A-tax-hike-is-a-tax-hike-is-a-tax-hike#ixzz0g3JaOMQX