More thoughts on the tax debate

There's been an increasing amount of discussion, on the blogs and elsewhere, about the County Commissioners upcoming public hearing.

To clarify a bit, the Commissioners will take comments on Monday, August 13, starting at 7pm, on whether to place before the voters of Durham either or both of the tax options granted to counties in the recent session of the NC Legislature.

The debate at this time will not culminate in either tax increase being implemented.

The two tax options under discussion are a .25% increase in the general sales tax (the county currently tacks on 2% to all sales transactions, including food items; the state collects 4.25%); or a .4% increase in the revenue deed stamp tax, commonly called a transfer tax, from .2% to .6%.

County commissioners have the option of placing either or both of these proposals on the November ballot. The commissioners will then have the option of implementing only one of the tax increases, assuming they are approved by the voters. If only one is approved by the voters, then the commissioners can implement only that tax, if they choose.

There's been a lot of ignorance and fear-mongering on this topic. I posted yesterday a copy of an email sent out by the Realtors lobbying arm, encouraging their members to attend the hearing to prevent the transfer tax from coming before the citiziens of Durham for a vote. I'm speculating that their polling indicates the tax wold be approved by the voters of Durham, and they see not allowing that to happen as their best chance to avoid it.

Over at Kevin's place, commenter Mark further propagates some of the misconceptions and demonstrates an ignorance of the subject that's worth examining in and of itself.

"...it will not have any kind of noticeable impact on me." Maybe not, but for those who may sell their house at a loss, every dollar counts. There are issues of principle here as well, and those who have taken a risk of home ownership should not be penalized. Even if, as you say, is not that much and won't break a deal. Nope. It won't. But why nickel and dime a homeowner just because they are able to buy a home? Homeowners already pay property taxes. Do renters? Being a renter for most of my life, it was tough to become a homeowner. But now I am and I should not be penalized. Because once approved, then it's a tax that can be raised. It's not a one time thing. And if the Department of Real Estate wants to come in and protect a homeowner's interest, while preserving their own, so be it. But they won't be the only one or group objecting.

And, btw, when did everyone start believing that our present government here in Durham was spending the taxes they already receive wisely? Do you think that these new taxes will be allocated properly? So far, and from what I've read, I don't see a lot of people having a lot of faith in the present 'good ol' boy' staff at city hall. But I digress...

There are issues of principle involved in every tax policy. In this case, the issue is not "penalizing those who have taken a risk of home ownership." The issue is, who should pay for our growing infrastructure needs? New development carries with it increased capital costs for municipalities. Should we fund that by increasing the sales tax or by taxing those who profit most from this development? That's the principle.

"Why nickel and dime a homeowner?" Homeowners are not being nickel and dimed here. You're being nickel and dimed by ongoing property tax increases, and by fees (like the stormwater and yard waste fees collected by the city) that increase annually. This tax impacts home sellers, not home owners, and to a greater extent it impacts land developers and speculators. Want to minimize incremental annual property tax increases? Find another source of revenue.

Do renters pay property taxes? Of course they do. They just pay them on someone else's property, and don't get to take advantage of any tax breaks associated with them.

"Once approved, it's a tax that can be raised." It's already approved. There's a .2% tax in existence. The proposal is to raise that tax to .6%.

"The Department of Real Estate?" What are you smoking, my friend? The Realtors are a lobbying organization, not a government agency. Are they looking out for your interests? I don't know. If they were looking out for your interests, wouldn't they offer to cut their 6% commission on selling your house? (That's $12,000 on a %200,000 home. The transfer tax on a $200,000 home would amount to $1,200. Which would go to the general fund, not to a private bank account.)

Are our taxes spent fairly, wisely, and without regard to a good ol' boy network? Unlikely. A good part of that is because ordinary citizens like you and i are unable to afford lobbying organizations as well funded and organized as the Realtors. And if we want our tax dollars to be spent wisely, we need to get a lot more involved in the decision making process.

When the Realtors lobby to deny citizens the right to vote on tax policy, they make it less likely that we'll be involved in our government. Which may suit some interests. But not mine.