Questions Reporters Need to Ask

Following is an email I sent to the AP reporter in Trenton. My goal is to plant the salient questions reporters should be asking about this so-called education funding reform.

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As you report on this, here are a couple of questions to keep in mind.

1. The governor talks about adjusting funding to accommodate those who “live in the wrong zip code.” That could be taken a number of ways. Does it mean that state aid to schools will be based on each individual child’s household income? If yes, it is just one more implicit admission that education funding ought to be based on income and not property taxes. And, if so, how will this affect a district like Middletown Twp? We get aid from Trenton of about fifteen to sixteen percent. That is because we are a so-called rich district due to some very wealthy sections of the township. Will Middletown begin to get substantial aid increases? I doubt it very much.

2. As you might know. Middletown borders Keansburg, an Abbott district. The part of Middletown adjacent to Keansburg is of the same socio-economic strata. Keansburg gets aid of what, 80%? 85%? I am not sure of the exact figure. But the point is that a person living on one side of the street with an identical house and income to their neighbor across the street in the other town has either an imputed greater or lesser ability to pay property tax based which side of the border of they live. Is this fair? How will Corzine’s plan address that huge inequity.

3. Lastly, assuming Middletown will reap some sort of increase in aid, how much and how meaningful will it be? Corzine indicated there may be around a $500 million increase in education spending? Middletown’s education budget is somewhere over $110 million a year (I don’t know exactly, I have given up wasting my time paying attention other than always voting no on the budget). The taxpayer covers well over $80 million of it. (trying to be conservative with figure so I am not accused of exaggerating).

In Middletown, around 65% of the property tax bill goes to education. That means of the typical $6,300 tax bill, over $4100 is for the schools. What would constitute substantial tax relief? A $1,000 reduction? That, it seems to me, is the bare minimum. To do that it would take an additional $20 million from Trenton to achieve that number. With only $500 million available and 600 districts vying for the money, it is doubtful that level of aid would or could ever happen.

Furthermore, even if it did happen, how would it affect the taxpayers bottom line? The 25% decrease in their education portion of the tax bill will only translate into a little more than 15% overall property tax reduction. This is peanuts. This would only be returning people to where they were two or three years ago. And, keep in mind, this is a fantasy, best case scenario.

So, I hope you keep these points in mind as you question Lilo [former Gannett reporter and the governor's press spokesman] as well as legislators. These are the real bottom line questions. Don’t let them gloss over the reality with zip code distractions.

ZIP code Duplicity

Governor Corzine has a plan to revamp education funding. It appears to be just more smoke and mirrors. The sales pitch is “the current model leaves too many children out of luck simply because they live in the wrong ZIP code” Pithy, but meaningless as far as the overburdened property taxpayer is concerned.

Two of the many problems with the plan are the continued reliance upon using a community’s aggregate wealth to determine aid and thinking $400 million to $500 million in increased aid will begin to make a dent in sky-high property taxes. And that is what is driving this so-called reform.

The idea that low income students living in a wealthy district merit less aid than those in a poor district reveals the inherent contradiction of a needs-based plan governed by a community’s average income. Why should a needy student be penalized because he lives in the wrong ZIP code? Wait, isn’t that what is driving the governor’s thinking? How can he say he is helping those who live in the wrong ZIP code when he is penalizing an otherwise identical child because he lives in the wrong ZIP code? Confused? Our leaders depend upon us not thinking too deeply about these things.

The governor promises more education aid. But he has also guaranteed Abbott districts will not see reductions in aid and might even see an increase. Using $450 million and dividing by 600 districts, you get $750,000 each. That would be 0.6% of the Middletown Twp. education budget and 0.4% of the entire property tax bill. Anymore need to be said? You can contact me after I return from my round the world cruise courtesy of these huge property tax savings.

The real problem with high property taxes is they have nothing to do with ability to pay. Education must be supported entirely by the state with a dedicated income tax. Then funding based on individual student needs would be based solely upon those criteria and it would not matter which ZIP code one lives in.

And do not forget that even if the education portion of property taxes were eliminated we would still be at the same level of local property taxation as existed about ten years ago. Were you satisfied with what you paid then? Have your wages increased so much that this amount will now be a minor nuisance? Hah! I thought not. Don't be duped. We must eliminate the property tax for all things, not just education. Stop subsidizing your wealthy neighbors tax obligation.

Is bringing "tax equity" code for class warfare?

In a recent conversation with a N.J. senator, one reason given as to why eliminating the property tax and replacing it with an income tax cannot be done is that it could be construed or actually become class warfare. The concern is that the so-called rich would be unfairly targeted to pay more taxes than their fair share for no other reason than that they are rich. So, to legislate based on such motivation is not right and would be divisive.

If that were the case, I would agree. We should not unfairly target one class of people based simply on who they are or what they have. But this is not the case here. In fact, the reverse is what is the de facto situation in New Jersey.

The property tax is inherently skewed against middle, low and no income taxpayers. In actuality, in an ever-increasing degree, it inordinantly benefits those have the greater income.

In fact, the property tax system does exactly what the decryers of class warfare ostensibly are against: The property tax automatically causes those of a certain class to pay an unfair share of the tax burden. It targets those at the bottom. The less income you have, the greater percentage of that income goes to the property tax.

For example, the person with an income of $60,000 paying $6,000 in property taxes has an effective tax rate of ten percent. The person making $120,000 and paying $6,000 in property taxes has an effective rate of five percent. The person making $360,000 and paying the same $6,000 in property taxes is paying a measley TWO percent rate. Compare that with the retiree with $30,000 income who has an effective tax rate of TWENTY percent. That is ten times the so-called wealthy taxpayer.

There is already class warfare going on, and it is against those at the bottom, not those at the top. The demand for equity to be brought to the system is not based on some Marxist notion that the rich are inherently evil and automatically worthy of contempt. It is based on the biblical and basic American ideal of treating all equally and fairly, of not favoring one class of people over another. The property tax favors the wealthy at the expense of those less well off.

(I have not factored in how abuse of the farm assessment--something only possible for the wealthy--exacerbates the disparity even more; it is fodder for an entire post.)

We must put a stop to the class warfare against those least able to afford it.

End the Property Tax and restore fairness and equity to how we pay taxes.

Will elected leaders ever get it?

Municipal and state legislators continue in their failure to address the number one scourge of N.J. taxpayers: Property Taxes.

One wonders whether they are actually without a clue as to the only true solution or if they really are uninterested in bringing fairness to how we fund our schools, county and local government. Maybe they fear advocating change will hurt their political careers. Maybe they like the present unjustifiable system.

In the latest example, Howell Twp. residents turned out in droves to a town hall meeting to protest huge tax increases. They cited how severely $1,000 and $1,500 property tax increases along with rises in the cost of living in utilities and other areas are affecting low and fixed income taxpayers. They cannot afford it.

In response, the politicians never even consider the fundamental problem, which is the inherently unfair nature of the property tax. Instead, they point to corruption, the lack of and misdirected state aid. These are genuine problems. Abbott district funding and malfeasance by the same needs to be addressed. But fixing them will never remove the inequality of the present method, one that taxes with no regard to one's ability to pay.

New Jersey must stop driving people out of their homes and the state. People spend a lifetime building relationships with doctors, local services, friends, etc. In other words, they are a part of a community, contributing to and receiving from its life. But the property tax system is forcing greater and greater numbers of people to abandon all of this time and emotional investment. Families are split up as they have no choice but to pick up, terminate all these commitments and relationships, and leave. They are unwillingly forced to start all over. Often hundreds of miles away.

What is needed? We need a tax to fund education, county and local governments that is fair; one that does not penalize those on low and fixed incomes. The only one that meets that criteria is the income tax. It allows for changing income levels with instant, precise and automatic adjustment. No rebate program. No political squabbling over who should get a bigger piece of the state aid pie. It would be a thorough, sweeping and fair change. When are politicians going to get on board and really address this curse, the property tax?

The AARP does not get it either

The AARP does not get it. They, as do most "public interest" organizations, fail to see the property tax as insidious and unjust. Therefore they assume it must continue and base any and all "solutions" on that. They fail to see that many of the income-based issues seniors face are a direct result of huge proportions of their limited incomes being sucked up by property taxes.

I have written them and been blown off. They dismiss out of hand those who do not tow their line. Below is a post I made in response to their page "Divided We Fail" http://www.aarp.org/issues/dividedwefail/ . The focus is on the strains that healthcare costs present to seniors.

What I point out is that they fail to see their is one thing that could remedy a huge number of their members' dilemma: Eliminate the property tax. Do so would free up hundreds of dollars each month for low income, cash-strapped homeowners. They would be enabled to afford supplemental health insurance and no longer have to do without or turn to others for charity. This, in turn, would reduce the base of people government would have to assist, thus reducing governent expenses and also allowing more cash to be spent in areas presently cash-starved.

It is too bad AARP, one of the nation's most influential organizations, refuses to see the light. One cannot help but wonder if they suffer from the same malady as politicians: They talk about those in need but are beholden to and act on behalf of their wealthier doaners. Or maybe due to isolation from the experience of those most in need they suffer from the Marie Antionette syndrome: No bread? Let them eat cake!

Following is my post. I wonder if they will clip it or allow it to display?

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When is AARP NJ going to understand that if the property tax is eliminated, large numbers of the most vulnerable seniors--due to limited income--will then be enabled to afford supplemental healthcare insurance, along with many of the out of pocket expenses?

People who do not qualify to pay income tax are still paying $4,000, $6,000 and much more each year because property taxes are not based on one's income, their ability to pay, but just because one owns something. Free this money up and we will tremendously reduce how many people are not able to afford supplemental health insurance and/or associated medical care expenses.

The fact is there is an income component to the property tax, but the state and AARP refuse to acknowledge that is what makes it totally and completely unjust. State aid is assessed on ability to pay. Ability to pay is based on imputed wealth to those not wealthy just because they have wealthy neighbors. The property tax ought to be eliminated and replaced with the income tax.

The tacit admission by the state that ability to pay is the fundamental issue is revealed in that rebates are based on one's income. This means that income ought to be the basis of collecting taxes for schools, municipalities and the county, not merely because one owns a piece of property. Why have income as a qualifying factor if property taxes are regarded as fair and just as is?

Get with it AARP of NJ. Stop playing the game with self-serving state politicians and self-interest groups (can anybody say NJEA?) who need the present unjust system to continue in order to perpetuate the gravy train of unrestrained annual tax increases so they can continue to payoff their constituents (developers and public employee union members). Why don't you start acting on behalf of those your purport to represent? We are waiting.

Another sham tax reform

The fact that there is an income based component to this so-called rebate is a tacit admission that the Property Tax is inherently unfair. Low income property taxpayers subsidize wealthier ones to the tune of 3 times the rate. Until N.J. eliminates the property tax for all government services (county, municipal and schools) and rolls it into an income tax, there will never be spending reform. Income taxes will never be allowed to go up on an annual basis. The Legislature's hands will be tied. Today's Press editorial mentions the Legislature's "low regard for the intelligence and attention span of the voter" and how they are "counting on the gullibility of the electorate" when it comes to this Falls elections. I do not think the Press was saying our legislators are right, but the sad truth is they are. NJ voters repeated re-elect these same crooks time and again. I doubt they will be mistaken this year. Besides, voting out one party will not do anything. The wholesale change due to Florio's tax hikes did not generate any improvements when the Republicans ran the show. Whitman just began the trend of putting the state into hock. When the Dems took over, they followed her lead by doubling up this plunge to total fiscal chaos. Only a third party sweeping to power can afford any hope of real change. Nevertheless, if there is to be any hope of correcting the property tax it will only come through consolidating taxes into one tax to fund government services. That will make it crystal clear how much is being spend. It will eliminate the shell game of forcing a little county tax increase here, a little municipal tax increase there, a lot of education tax increase, with each entity pointing to Trenton as the cause but not really doing anything politically to change it. Until people get the idea of eliminating the property tax into their head, we are going to have a continuation of what is and has been: seniors driven into poverty and/or out of the state; lower income people unable to afforrd a home, and continued runaway spending by all levels of government.

The Ruse of Reform

The trumpets are blaring in Trenton. The so-called leaders of our state are congratulating themselves for a job well done. They have addressed the property tax issue in New Jersey.

One can only ask whether these people really believe themselves. If they do, they do not belong in Trenton. If they do not, they do not belong in Trenton. The corresponding question is whether the N.J. voter will continue their tendency to return these unscrupulous politicians to office in November? If the continual re-election of the Sharpe James and Wayne Bryants is any indication, sadly, the answer is yes. N.J. taxpayers keep getting what they vote for: Charlatans.

What has been overlooked by all sides in this vacuous effort is whether the property tax is a fair and equitable tax. It is not. It imputes ability to pay based on one’s neighbor’s ability (the so-called wealthy districts). It is structured so those with the least means pay at a rate of three times and more as those with the most. It cares not whether one has income or basic living needs met.

Here is an example of what Trenton deems fair: One taxpayer has a $50,000 income and a $6,000 tax bill. Another has $250,000 in income and a $12,000 tax bill. The first party pays 12% of their gross income in property taxes. The second pays 4.8% of income. The first has $44,000 left after paying property taxes, the second $238,000. Both will receive $1,200 in tax relief. But who really needs the relief here? According to Trenton, both. Common sense and fairness makes it clear our legislators have no sense of tax equity.

And there are others who would not stop at $250K. They think everyone, regardless of income level, deserves to receive relief. Relief from what? They claim it is unfair and unconstitutional. Fair? Where is the fairness in the property tax? There are many taxpayers who have far less than $50,000 in income who are even worse off. So why do those who are paying property taxes at one third the rate of those at the bottom deserve anything? They need to pay their fair share. We need to stop having the least able subsidize the most.

The scam of property tax relief will be ballyhooed by politicians and the media over the following month’s right up to the election. Regrettably, the demogoguery of telling voters a band aid is the equivalent of major surgery will work. At least long enough to get them two more years in Trenton. And N.J. will have allowed a truly historic opportunity to go by the boards.

Benefits of Elimination of the Property Tax

What benefits would result if the property tax were completely eliminated, with the revenue collected from another source?


• Fairness, equity and tax justice would be restored as this tax is eliminated, a tax which subsidizes those at the top on the backs of those at the bottom.

• The unjust system of home owners being imputed with an ability to pay higher (property) taxes simply because they have wealthy neighbors would be done away with.

• There would be a halt of the mass exodus from N.J. because remaining in one’s home would no longer be unaffordable.

• N.J. would become a state where one’s home was no longer in jeopardy of confiscation due to inability to pay property taxes.

• N.J. would become a desirable place to move to as an escape from high property taxes in other states.

• There would be a boost to the state economy due to a growing population due to the end of the exodus plus an increase in those desiring to live here.

• N.J. might recapture its soon to be lost Congressional seat due to its lack of population growth.

• Those who spend a lifetime paying off their home would have the security of knowing they will have a roof over their head until they die.

• Families would now be able to enjoy their latter years surrounded by family and friends of a lifetime instead of being forced to leave them due to the unaffordability of living here.

• Local officials would no longer be inclined to succumb to pressure from developers as the carrot of increased property tax revenue is dangled before them.

• The abuse of eminent domain by throwing people out of their homes would be greatly curtailed as local officials no longer need to choose between increasing property tax revenue through over-development and/or phony redevelopment schemes.

• Open space would be less threatened as local officials would no longer need to rely on over-development to increase property taxes.

• More retirees remaining in their towns of a lifetime would relieve pressure on ever increasing school enrollments because they would not be selling their homes to younger buyers with school aged children, thus reducing local education costs.

• There would be forced development of a fairer system for funding education based upon treating all students equally rather than favoring aggregately poorer communities over others.

• The mix of generations in neighborhoods would be more natural and balanced as retirees could now remain in their homes.

• The cost of owning a home would be reduced, increasing the possibility of lower income buyers qualifying for mortgage loans as property taxes are no longer factored in.

• There would be an increase in the home renovation economy as owners would be more inclined to make improvements since they no longer will be driven to move elsewhere due to ever-escalating property taxes. These expenditures are presently stifled because people do not want to spend thousands on renovations just to move on in a few years or because they need to save the money to pay future property taxes.

• Home improvements would be made without the corresponding “penalty” of increased property taxes due to an increased assessment, thus boosting the state’s economy.

• Those who lose their job, are unemployed for an extended period, who become disabled or who have a dramatic reduction in income due to a job change would not have to worry about property taxes consuming their limited resources for everyday living necessities.

• Those relying on Social Security and modest—if any other—retirement income would no longer have to choose between paying for medicines and food and utilities or their property taxes.

• There will be reduced state subsidization of medical costs for those barely surviving on limited incomes.

• Many will be able to afford healthcare insurance and/or long term care insurance as hundreds of dollars a month are freed up for such, thus relieving financial aid pressures on state assistance programs and health institutions.

• Once eliminated, property taxes will never again be able to haunt and plague us. They will do that if we retain them, only applying a band aid, and as is inevitable with every current plan to address them. Witness the governor’s "demand" to merely limit their annual increase to only four percent (greater than inflation for the past twenty years). This means they will double only every 18 years instead of every ten. We can also rest assured politicians will find ways around this to increase them anyway.

There are undoubtedly many more benefits to be had through the elimination of property taxes. Allowing them to remain will prevent any of the above benefits coming to pass.

Any negative results due to elimination of the property tax are hard to imagine. That is, other than the major bogus one which is repeatedly trotted out the minute real reform seems possible. It is a red herring, usually floated by those currently benefiting from the present system, those being subsidized at the expense of their neighbor. It is the demagogic claim that eliminating the property tax would mean other taxes would be raised. Of course other taxes would need to be raised to replace the lost revenue. That is not the same as increasing taxes overall.

The idea is to institute a more just way of funding government services. Only those who do not believe in tax fairness object to the shifting of tax burden away from those paying more than their fair share and who are least able to afford it unto those not paying their fair share.

To those who claim that we must first reduce government spending, we ask why? That is, why must it be first? Government waste and tax fairness are separate issues. The question the fairness of property taxes exists regardless of how high they are.

Wasteful spending, inefficiencies, pay to play corruption, etc. all need to be tackled, no matter which way revenue is collected. Property taxes have nothing to do with them other than they often end up paying for these excesses. Address the fairness and spending issues at the same time but separately.

It is time to come up with a new direction in the efforts to address property taxes. Just making them a little less painful is not a solution. If we do not make elimination of property taxes our primary goal then we will be revisiting this issue in a few short years, while none of the above benefits will ever be achieved.

There are some enlightened politicians

Too bad he did not win.

http://www.freerepublic.com/focus/f-news/615736/posts

Across the board advocates just do not get it

Can anyone tell me why it is more important to grant across the board property tax reductions to all taxpayers than to maximize the relief given to those most severely affected?

It would be nice to give everyone a tax break. But to say it is imperitive to give a 10% property tax reduction to someone earning $150,000 while limiting the reduction to 20% for those making $25,000 reveals the utterly oblivious understanding those proponents have of the real issue here.

If these people understood the concept of tax justice as the issue, they would be not be suggesting distributing the limited money available to those in least need of it. They seem to fail to remotely understand that equity and fairness are even an issue, let alone the issue.

Those in the bottom 20% of taxpayers pay almost triple the percent of their income in property taxes as compared to the top 20%. This fact proves there is an inherent inequity built into the property tax. Across the board reductions will not change that formula. Therefore, addressing that inequity must be the starting point in dealing with the property tax issue.

It is obvious that the only way to deal with bringing true relief to those in most dire need of it is to find an alternative to the property tax. Pumping money in without dealing with its structurally built in bias against low and no income taxpayers will only result in superficial and quickly passing relief.

Leading the way...to being broke

Leading the way but not to something good.

A recent study for 2005 has revealed that six of the top ten counties in the nation (yes, the nation) with the highest property taxes are in New Jersey.

Hunterdon, Bergen, and Essex are in the top five. Morris, Somerset and Union are 7th, 8th and 10th.

I feel better. My county, Monmouth, is all the way down at 13th. Woo hoo.

Meanwhile, neither Pennsylvania, Delaware, North Carolina, South Carolina, Florida nor Arizona have a single county in the top fifty.

Can there really be any wonder why there is an exodus from N.J. to these states?

The Asbury Park Press misguided

Here is my most recent letter to the APP.

The Press has done a nice job of keeping the property tax discussion under the microscope of public awareness. The taxpaying public owes it many thanks.

In its editorials, it has correctly analyzed the shortcomings and benefits of many of the cost savings proposals. It has tried to focus on state legislator’s efforts or lack thereof. It has rightly ruled out tax increases as a full or partial solution. What it has wrongly done is summarily rule out shifting of the tax burden.

The Press, along with most of the major players in this quest to fix the property tax dilemma, forgets the fundamental reason the outcry against property taxes has reached a crescendo. It is because they are unfair.

Everyone hates to pay taxes. But most are not averse to paying their fair share. But the property tax burden is inordinately skewed in favor of those with upper incomes and against those in lower brackets.

Shifting the tax burden so it is more equitably distributed is what we need to make the singular and major focus of this process. Efforts to find cost savings are also critical and a basic part of the solution. But bringing fairness to how government services are funded by taxpayers is a moral imperative of the first order.

Maintaining the status quo by ruling out shifting the present unfair property tax to a more broad-based tax such as the income tax precludes addressing the very essence of what our nation was founded for: Equal justice for all. The property tax is not just because it is not fair.



Visit my website dedicated to ending the property tax: http://EndPT.org

Grand pre-opening preview

Visit my website dedicated to ending the property tax:

http://EndPT.org

It is not completely finished, so please forgive typos, grammar and any other errors.

We have met the enemy and ....

The Cato Institute has done a study. It looks at how informed the voter really is.

We are in deep trouble. Platitudes and demogoguery work because we have a nation ruled by uninformed voters who do not take the time to think any deeper than a headline.

Follow the link to read the results. Try not to get too depressed.

http://www.cato.org/pub_display.php?pub_id=2372

Local Taxing Authority - the Right Way and the Wrong Way

Thank you to Thomas McMahon for giving us the fuller picture regarding supposed cost savings to be gained through consolidating local school districts (Asbury Park Press County school districts won’t assure cost savings, 10/3/06 http://www.app.com/apps/pbcs.dll/article?AID=/20061003/OPINION/610030306/1030). His article serves as a warning for us not to mindlessly accept over-simplified solutions to high property taxes. Politicians are so inclined to sound bites over substance and to then believing themselves that we are in jeopardy of not really getting anywhere than to the governor’s capitulation of a reduced rate of property tax increases.

Buying into insubstantial fixes like consolidation is also why we must not allow the latest proposal of allowing localities to impose there own taxes to go down the wrong road. Builder fees and local sales taxes are gaining traction, according to recent reporting. We must scrutinize these ideas.

Builder fees may add tax revenue but they have severe shortcomings. They are not reoccurring. Homes and offices are built once. Areas that are built out would have limited, short-term benefit. As for towns that are built out, just as they are driven to chase ratables so as to increase property tax revenue, the thirst for builder fees would encourage more unneeded development and, likely, further abuse of eminent domain. Those not built out would be encouraged to do so with a vengence as they also chase more tax revenue.

Local sales taxes are equally problematic. They do not ensure tax revenue would remain local. Who shops exclusively in their own town? In fact, towns with a mall would see a windfall at the expense of other towns. On the other hand, unless every locality enacts a sales tax, people would be encouraged to spend their money where there is no or lower sales taxes. This would in turn harm businesses in the shunned town or simply drive all towns to enact a local sales tax. What an unhelpful and confusing mess.

We ask would local sales taxes be mandated to offset dollar for dollar local property taxes? We all know how politicians find ways to spend additional income rather than using it to reduce taxes. Does anyone believe things will be any different this time? Even with a mandate offset, they will find ways around it.

The sales tax is regressive. It begins with the first dollar you spend. That is, it forces those at the bottom and least able to afford it to pay more taxes. There was a huge uproar over raising the state sales tax 1%. Will the arguments against doing that be any less applicable when there is a two, three or four percent local sales tax?

The idea of local taxing authority is good. The methods proposed are not. What needs to be implemented is a local income tax. And it ought to replace the local property tax. Local taxpayers’ taxes will then remain local.

More importantly, fundamental fairness will be brought to tax funding of local schools and government. With an income tax, those who are struggling to get by on fixed or reduced income will no longer be burdened with carrying an inordinate share of local taxes. It will also eliminate the inequity of the low income taxpayer being imputed with an ability to afford more taxes just because his neighbor’s income means he lives in a “rich” district.

Therefore, local taxing authority can be a solution to inequities in the property tax. But that will only be as long as it is restricted to an income tax. Other kinds of taxes are illusions, non-solutions or will only shift the tax burden from one unfair method to another.

Economists: Dismal scientists, to say the least.

There is an article in the 8/28/06 Asbury Park Press, New Jersey's not alone in its property tax revolt. http://www.app.com/apps/pbcs.dll/article?AID=/20060828/NEWS/608280356 Towards the end of the article, it says: "Economists generally like the property tax because it is stable, visible..." "Stable", yes, for it is not subject to the vagaries of the economy. But does that necessarily mean that there is no other tax as good to use as the Property Tax? If so, we ought to get rid of the Income Tax and the Sales Tax and replace them with the Property Tax. State tax revenues will be much more stable.

Dumb idea? Of course. But most do not see the speciousness of the point with the "stable" characterization. The state seems to get by fine without tax revenue sources as stable as property taxes. The only reason the state runs into revenue shortfalls is due to overspending. And even with that, they manage to get by year after year. We have yet to see Trenton close down before the end of the year due to being short on tax revenue.

The economists continue with their specious logic when they say the Property Tax "doesn't allow behavior such as tax dodging common on the income tax." So, they would like us to think property taxes are loophole free. Are these guys wearing blinders or are they are just shills for those tax dodgers?

The fact is that the lowest 20% income earners among property taxpayers pay almost 3 times--THREE TIMES--the percentage of their income in property taxes as do those at the other end of the income scale. This is a builtin loophole to the advantage of the well-off, for which to get they do not need tax attorneys, friends in the legislature or an accountant. What ever happened to paying one's fair share?

Furthermore, how many average taxpayers own five or more acres which they can have classified as "farm land" in order to get a 90% break on its assessment? All one needs to do is to conduct $500 worth of business each year. Hmmm, do you think they might have a well-off friend who would gladly buy a $500 cord of wood or bales of hay or whatever each year in return for the same? How could I be so cynical? Maybe because one only need take a spin down Navesink River Road to see a few steer in the yard of the riverfront home of one of those who supposedly cannot get a tax dodge on property taxes. Think the bovine are there just for next summer's bar-b-que?

The complete obliviousness and insensitivity of economists to the heinous and insidious nature of the Property Tax is made even clearer when they say: "The property tax is a fantastic tax for things that are purely local because, under those circumstances, it does not function like a tax. It's more like a user fee."

A "fantastic" tax? Are they out of their minds? Fantastic if you are wealthy. Devastating if you are on low, fixed or no income. Maybe they ought to take a poll at the border of NJ as retirees and others join the exodus to friendlier environs. Ask them how "fantastic" property taxes have been to them.

And "user fee?" Well, I have always said you do not really own your home but are just a renter from the state. Now this is confirmed by the economists. We are just users of our homes, not owners. We must pay for the privilege of living in the state's house and on their land. I guess communism actually did win the cold war (maybe they did not know they need not fight one). Or maybe it is just a revival of the Middle Ages when we had land barons and peasants who paid tribute in order to live on their land.

The problem here is that these misguided views of economists are not exclusive to them. There are many who hold to the same who are also the ones who are major players in the current property tax reform effort. Too bad we are advised and ruled by the foolish or willfully blind.

Until the Property Tax is eliminated, its oppression of those at the bottom will continue. And the only response we can expect from those at the top will be their wonder at why the protestors aren't just eating their cake.

Appeal to get discussion on right basis

Following is an appeal I made to a Gannett reporter. I requested that the property tax discussion be given some balance as to its fundamental context. The idea is that individuals pay taxes regardless of who or how rich their neighbor is.

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Read your article in today's Press about lawmakers wanting to cap spending in so-called rich districts.

Let me suggest that you and Gannett expose this misleading idea that there are "rich" and "poor" districts. The characterization would be true if there were only rich or only poor people living in those districts. The reality is there are an entire range of incomes represented in each. Individuals pay taxes by themselves. Their rich neighbor has nothing to do with that ability.

I live in Middletown where we receive state aid toward education in the upper teens as a percent of the total budget. Middletown has one of the better per pupil costs. Nothing near the Abbotts or other high-spending districts. We receive so little aid because we have a lot of wealthy residents. But I have yet to receive anything from them to help me pay my property taxes.

As you know, Middletown borders Keansburg, an Abbott district. I am not sure how much they receive from Trenton as a percent of their total education budget, but it certainly must exceed 60%. They are a "poor" district.

My suggestion for your reporting is that you could choose a street or block that acts as a border between the two towns. They will have similar sized and valued homes. The people who live in them will likely be in similar income brackets. BUT because one lives in Middletown and the other in Keansburg, they are each imputed with a different ability to shoulder the cost of local education spending. Obviously, they do not have differing abilities. But the state designates each district's ability to afford based on an average of the aggregate income, regardless of the range of incomes. Just because Keansburg does not have a Navesink River Road or a Locust (among other) areas, it has a lower average income, a lower "wealth" factor.

You can see how this is unfair and totally misses the point. If the aid from Trenton was credited directly to individual tax payers property tax obligation based on personal income then it might be fair. Of course, that would mean the property tax would then be a quasi income tax and/or ability to pay based tax. But this is not what exists. Just because one lives on the wrong side of the street, they are imputed with greater ability to pay than the guy they see out their front window. Ridiculous.

The above is why the context of the discussion about property taxes is so off-center. Fairness is the issue. No matter where one lives, they should be expected to contribute based on their own ability to pay, not an imputed ability simple because they have a rich neighbor.

I hope you can convince your editors that this is an important topic to be raised during this time of heightened attention to property taxes. Currently, it is being ignored as irrelevant or unimportant when it comes to the multitude of proposed solutions to the problem of high property taxes. It is forgotten that the burden of the Property Tax is individually borne and not supplemented for by one's rich neighbor. [Which raises the concomitant issue of the short shrift the disproportionate share lower income and fixed income taxpayers bear based on total income].

Corzine - Insincere or Insensitive and Oblivious

It should be obvious by now to anyone who heard Governor Corzine’s outline of his plan to fix the Property Tax crisis in New Jersey that there is no real hope for those most oppressed by this vicious tax. His speech was long on rhetoric and short on substantive reform.

His lack of sincerity—or political will—is confirmed by how he has no objection to the stacked committees with a four to two Democrat advantage, promising an outcome as productive as were the 2006 budget negotiations. Worse is key committee members who have a stake in the status quo. Does anyone really believe taxpayer interests will be served rather than vested interests?

The governor’s statement that most betrays his ostensible sincerity is that he’d like to limit future growth of the Property Tax to 4%. First off, that would be an increase over the current limit placed on the lion’s share of the property tax bill, education spending. Worse is the fact that it is a tacit admission that there will be no permanent reductions in the Property Tax, just a slower rate of growth. Thanks, Governor.

Nevertheless, regardless of whether the governor and the special committees are serious, they along with all politicians fail to demonstrate they understand the true nature of the problem with the Property Tax. It is simple. It is inherently unfair. It is skewed towards forcing those at the bottom to carry an unequal—higher—share of the total tax burden. Basic math confirms that built-in result will continue even if the tax is lowered. Are we interested in a just system of taxation or not?

We may need to find interim ways of giving relief to those presently being driven out of home and state due to the Property Tax. But the only real and lasting solution is to eliminate it completely. Anything short of that will only be a bandaid.

To answer those critics who point out we cannot—read as, lack the will to—reallocate a tax burden as large as that, there are two replies. First, it could be phased out over a five or ten year period, mitigating the impact of a single, massive shift of the tax burden.

Second, to say we cannot do it is to actually say we will not do it. And to say that is to imply that we do not care about those most adversely affected by the Property Tax. That means we are not interested in a fair system of taxation, and that we have little or no concern for those at the bottom when it requires boldness and sacrifice by those at the top. A sad commentary on the principles our state lives by: Love thy neighbor as long as long as I am not put out.

Until politicians, public interest groups and the taxpayer are willing to acknowledge the Property Tax is a tax which must be eliminated, low, no, and middle income taxpayers are doomed to more of what they suffer under today. It is that simple.

When will they get it?

Beginning on July 28, there will be a special session of the NJ Legislature—which, it turns out, will only be a special session of special committees—to deal with the Property Tax. Well, not really. There are no plans to look at and propose solutions to the Property Tax as a tax in and of itself. They only intend to see how they can make it a more bearable tax, aka “reducing reliance upon”.

As this could be a turning point in NJ’s goal to stop driving people to the poor house and/or out the state due this oppressive tax, many are chiming in with their opinions. We have seen op-eds from the NJ League of Municipalities, the NJ Chamber of Commerce, current and former state leaders, taxpayer watchdog groups, columnists, newspaper editorials. The one thing they all have in common is they conflate two totally different issues. They see spending as the problem with property taxes. If spending were reduced then the Property Tax would remain acceptable as a tax source. Consequently, they automatically include the Property Tax as a fundamental part of the solution to addressing the issue.

It is time that our leaders and those who would devise a solution to come to the realization that high and out of control spending at all levels of government is not what makes the Property Tax a problem. The problem is the Property Tax is inherently unfair. Reducing how much people pay will not and can not address this fact.

The unfairness of the Property Tax is confirmed by the oft cited statistic that households earning the lowest 20% pay 9.2% of their income in property taxes, as compared with the top 20% who pay 3.6%; that is, the least able to afford it pay 2.6 times more. But that is just an average. The lower you go on the income scale the greater the share paid, as in the case of the widowed taxpayer who pays over seven times the percent share those at the top are paying. With $21,000 in income and $5,500 in taxes, she pays out over 25% of her income, not the average 9.2%. We need to be careful of statistics lulling us into thinking the situation is not as bad as it is.

So the statistics prove the Property Tax forces the subsidization of those least in need of tax relief by those least able to afford it. Neither will an across the board reduction of this tax change this disproportionate distribution of the tax burden. Simple mathematics prove fairness can never be achieved through lowering these taxes, the inequity is built in. Neither do measly rebates alleviate the situation. Short of a rebate of 50%, 75% or even 100% for those at the bottom, they will continue paying more than their fair share.

This is not to say that spending is not a problem. The variety of measures being offered as a way of reigning in spending are good ideas. They all ought to be implemented, but not because property taxes are too high. No, they need to be done because that is what good government is all about.

The only relationship the Property Tax has to the spending problem is that it has brought about an acute awareness of the need to address spending. That is because its inherent unfairness has progressively insinuated itself and become a major problem for more and more of those in the middle class. Politicians can no longer bank on ignoring those at the bottom because they are no longer the only ones being decimated by the Property Tax.

Nevertheless, the main point is that the Property Tax is inherently unfair. It must be eliminated in order to address that unfairness because there is no other way to do so. If the Property Tax is included in any solutions arrived at to lessen its present onerous impact, the cure will be short lived and quickly evanescing. It will only be a matter of five or ten years before, once again, it will be as onerous as ever and at the top of the issues in most need of addressing. Instead of wasting our time going down that road, let’s get it right today by eliminating it altogether.

The American Nightmare: Do you really own your home?

I am not referring to broken water pipes and leaky roofs. I refer to what is commonly know as the American Dream. What is it? Owning one’s own home. Those without one pine over whether they will one day be able to achieve such. Those who begin the process often work two jobs or ungodly hours to afford a down payment and then embark on years of paying a mortgage. People strive, sweat and sacrifice over several decades just so they can own their home. Most everyone does this through borrowing. So, in the end, they often pay out fifty, one hundred, even two hundred percent more than the original price. It is a long, arduous and costly route hard working Americans travel, making the single largest purchase of their lives. Just to own their home. Just to live the American Dream.

Why do they bother? What is the reason people are willing to sacrifice so much? Is it materialism? Hardly. The investment value? A secondary reason, if at all. It is security in the present as well as in their old age. That is one major motive which causes people to take on such a daunting challenge.

Naive as it may sound, I wanted to own my home for the security it would give in my retirement years or through hard times. I figured I would always have a roof over my family's heads. Likewise, I foolishly thought that purchasing a home was like anything else one buys: after it is paid for it belongs to you. And as long as you maintain it, it will serve its purpose, and you own it to boot.

Foolish? Yes. For no one told me about the Property Tax. No one told me you don’t really own your home, you are renting it from your town. This is because property taxes are nothing more than rent. Fail to pay your taxes and you will be evicted. Evicted, regardless of whether you sweat and slaved all your life to own that home.

Worse, unlike any other tax which requires you to earn or spend something before you are obligated to pay it, property taxes are due merely because you “own” property. You might be unemployed. You might be disabled. You might be too old to work and on a very limited and virtually fixed income. The state does not care. Pay up, it says. Pay or else move out so we can sell your home to someone who can pay. This oppressive situation begins the minute you sign those papers to take “possession.” There is no other tax nor obligation we have that is like this.

Home ownership is a myth. It is not true. It is not real. We are all renters from the state. The only way to rectify this misconception is to eliminate the property tax. All the modification, tinkering, etc. to lessen its onerous nature will not change the facts. If we are subject to forfeiture of our homes for not paying a tax that has nothing to do with spending or earning an income then we do not own that property. But if there is no more property tax then we will have restored the right to private property. We will really own our home.

Only home owners (and renters who realize their rents include the “owner’s” property tax) can change this present injustice. It is up to them to write their senator and assemblymen that the jig is up and the property tax must be eliminated. Otherwise supposed benefits the American Dream of home ownership provides can only be believed through self-delusion, through believing a myth.