I respond to Assemblyman Thompson

Save Our Homes and Our Future
Assemblyman Thompson,

Thanks for your response. I will forward your response to my email. But I beg to differ that I have misrepresented you. As for a one-sided presentation, I only presented my case against those who reject the need to eliminate the property tax.

Yes, you may have agreed the property tax is unfair but then in our conversation and in your reply below you go on to defend its retention. For me it is a moral issue, not pragmatic. It is inherently unfair. If one believes this then how can they agree to continue it?

I disagree with your equating the property tax with Sales and Use taxes as a reason to reject my argument about the pernicious nature and the need to get rid of the property tax. Maybe they also should be eliminated. Being inconsistent does not make my argument about the inequity of the property tax wrong. And among the three taxes you mention, it has a unique application in how much is collected.

The main difference of the property from most other taxes is that it is collected no correlation to income. One can only pay so much Sales Tax based upon how much money they spend. New Jersey does not come knocking on people's door to collect more Sales Tax if one has not spent enough money. In fact, the Sales Tax recognizes there are basic necessities people need to live. It is considered unfair and wrong to tax them on things such as food, clothing, and medicine. This same idea is reflected in the Income Tax when it exempts the first $25,000 in income from taxation. There are some necessities subject to the Sales Tax. But there are many things one need not buy and thus not pay Sales Tax. So, one has control over how much Sales Tax they pay; not so with the property tax.

You reject elimination of the property tax because increases in other taxes would be "so massive, middle income people would be driven out of the State". I reject this as another red herring. In fact, research shows huge numbers of people are already exiting N.J. due to being unable to bear any longer the oppresive property tax. Furthermore, people are not just going to pull up stakes to leave; they would have to have jobs to go to. The overall national economy might be good, but leaving the metropolitan area would mean moving to lower wage jobs IF one can find one. But as to the need for a "massive" tax increase in other areas? There is no reason phasing in a change that eventuates in no Property Tax cannot be done. This was essentially Bret Shundler's plan.

There are advantages to be had from elimination. What about the increased affordability of homes to young people when the property tax no longer affects getting a home loan? The peace of mind and security that these same folk will have now knowing they will not lose their homes to a tax auction or be forced to move or retire out of state will have benefits far beyond what we can imagine. Some people would likely move here knowing they will have the security of a roof over their heads til the end of their life.

You also ignore the economic benefits to the state of increasing spendable income of middle and lower income. It is not as if they are going to stick the extra money in a mattress. More likely is they will buy the new car, appliances, make the home repairs or improvements, purchase health insurance, etc. These are things which they could not afford before. Spending such as this at this local level can only serve to boost the economy.

Another objection you have is "For your position to be correct, local spending (schools and government) would have to never increase or some other tax would have to be raised. You should also note if local authorities do not have to impose or collect any taxes but instead merely decide how much they want to spend, there would be zero incentive for them to hold down their spending". This is not necessarily true. Neither did I say local authorities would or should be left unchecked. Maybe you want to give local authorities the right to impose local income taxes as some cities (New York, e.g.) do. Then they would have to justify constantly raising their income tax or get spending under control so they do not have to. I have never argued against reigning in spending. I am just saying we must not confuse it with the moral fairness of the property tax.

You make the point "You ask where is the justice when your neighbor pays the same property tax as you while making 4-5 times your income? I will not attempt to justify this situation but you also must recognize that while he is paying the same property tax as you, he is probably already paying more than 4-5 times as much income tax as you since he is in a higher income bracket." Yes, but that makes my point about our tax system being progressive and based upon the ability to pay. And he is not paying more than about 9% state income tax even if he is making over $500,000. I am paying ten percent and there are many people paying much greater percentages. And they are not left with $455,000 after paying their tax."

And, of course, the following is a non-sequitur: "If he bought his identical house a year or two ago and you purchased yours 30 years ago, he might also argue that it is unfair you only paid $60,000 for your house and he had to pay $360,000. He might also argue it is consequently unfair that he now has these very large mortgage payments and you have little or none." The state has nothing to do with this, neither does the mortgage payment one makes have bearing on the equity of the property tax. As I pointed out above, if anything, eliminating the property tax will enable many young and lower income people to now afford to purchase a home.

You point out that "There will be winners and losers in any proposal put forward to either reduce or eliminate property taxes". True. Just as during revaluations the typical outcome is 1/3 of the home owners taxes go up, 1/3 go down, and 1/3 stay the same. The difference is that in the latter case there is no built in equity. Someone who bought in an undesirable location 30 years ago because it was in a more affordable area might now be socked with extraoridinarily high taxes just because it is now a desireable section of town. If all government services are funded by an income tax then fairness to all remains the order of the day. This is never the case with the property tax. Never.

Again you state, "I will restate my agreement that property taxes are not equitable and fair. But this statement applies equally to sales tax and any other tax or fee that is not income based be it motor vehicle fees, gasoline tax, marriage license, court fees, etc., etc". And again I point out that none of these taxes come close to consuming 10%, 20%, 30%, 40% or more of anyone's total income.

I am sorry if you are offended if I refer to you as a defeatist. It is not because you won't do things my way. It is because it is the same response I receive from people in your position on influence all the time. It is summed up with, "Yes, the property tax is unfair. But we cannot eliminate it." To me that is giving up on the idea before it is even considered. Now there are some like Jon Sure of N.J. Policy Perspectives who find it a useful tax. They fail to see it as unfair, unjust, inequitible and immoral. They are not defeatists. They are wrong in not seeing it for what it is, but they are not opposed to eliminating it just because they have decided it cannot be done even though they believe it to be wrong. There is a big difference. And I am tired of hearing people agree it is wrong but then decide to not even try to eliminate just because it cannot be done. Well, if everyone would decide to do it, it could be done. Those who decide not to have accepted defeat without even trying. Don't be insulted, just consider.

Assemblyman Thompson, I thank you for taking the time to engage on this issue. If the points I raise are never discussed they have no possiblity of effecting change. Just remember, we should do unto the least of us as we would have them do unto us. At this time, New Jersey's leaders are not committed to this principle.