There is no substitute for a substitue

Recently, N.J. legislators have suggested localities be given authority to collect taxes in addition to the property tax. The idea is that the revenue would be used to reduce reliance on the property tax.

Immediately there were cries of outrage and condemnation. The essence of the complaint is that given another tax to collect, politicians will only take more and increase spending more. That is, the ostensible goal of reducing property taxes will fall by the wayside whenever there is more money coming into local treasuries.

Of course, this knee-jerk reaction has a point. Unless there were an iron clad rule that mandated all new taxes would go directly to reducing property taxes, these fears would materialize sooner than later. The only way to ensure reduction of property taxes would be to include a freeze of all property taxes with a corresponding mandate to use any increases in revenue to dollar for dollar reduction.

But even if such restrictions were put on, doubtless, politicians would still find ways to get around it. The governor has already shown us the prime example of this. He increased the caps on school budget increases from 3.5% to four percent. How could we guarantee such would not end up happening?

These realities are one more reason that the only way to address the inherent unfair nature of the property tax is to eliminate it completely. As long as it is there as a sponge to soak up uncontrolled government spending—especially at the state level—this tax will never be reduced to levels that it’s inequity would exist but be negligible when it comes to its affect upon those least able to afford it.

Eliminate the property tax by replacing it with a local income tax and watch what happens. Just as politicians are loath to raise the state income tax, so they would be any local versions. People would not stand for it. And if the authority to increase it required approval from Trenton then it would really seldom if ever happen.

Right now Trenton politicians have driven local taxes higher by their failure to control spending at the state level, as well as by the various mandates and preferential distribution of local aid to certain localities. They have forced localities to continuously increase property taxes without really being held directly responsible. When they are held accountable for increases in local taxes because they have to approve increases in local rates, you will find they suddenly see the light. Re-election and remaining in power is more important.

This is just one more reason the elimination of the property tax must be the stepping stone to reform of out of control government spending and mandates. If we do not begin here, we will never end the problem of high taxes and runaway spending.