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Would You Trade SALES TAX for PROPERTY TAX?

12 April 2007

With the April 17th Federal Income Tax deadline looming as a reminder, "taxes" in all forms moves to the forefront of our minds. Property tax in particular is becoming a major issue in Florida (although I think insurance should). No one is certain as how to get rising taxes under control - the massive real estate appreciation of the first five years of this century didn't help a bit - Ma and Pa Homeowner in the 21st Century

I received this email today from a "Doris Jones". I do not know who Doris is (I did not find her on AR either) and my Google search under "Doris Jones - Florida Realtor" revealed nothing.

However, I DID find the web address "Doris" provided went to a website entitled No More Property Tax, which states it is sponsored by the Republican Party of Florida. I Googled "nomorepropertytax" and many news articles and blogs showed up - 133 in 0.26 seconds. It appears this movement - which is essentially will raise sales tax to 8.5% while essentially eliminating property taxes for full-time residents and reducing it for 2nd homes.

There are skeptics on both sides of the equation. While in Florida in February, I read a newspaper article that said Florida would have to raise sales taxes to 13.8% to eliminate property taxes. I suppose the elimination for residents coupled with the reduction for non-residents resulted in the 8.5% number.

There is more to this than just swapping numbers. A few questions are posted at the end of this blog entry for consideration.

Here's is Doris's email and the link to No More Property Tax dot-com:

If you haven't already heard, the Florida State government is looking to make dramatic reforms in how Florida property taxes are paid (if at all), and this could go into effect by next year. I don't have to tell you the incredible impact that this would have on Florida's real estate market.

Here is a summary of what is being proposed (and we are expecting it to pass:)

- If you own a residence in Florida and are homesteaded (as your primary residence) you would no longer pay property tax. Zero.

- If you have a Florida residence as a second home, or if you have a commercial property, property taxes would be rolled back to 2000-2001
levels.

- Future property tax increases would be limited.

To accomplish this aggressive measure, the State of Florida would increase general sales tax by 2-2.5%.

Those of us who live in Florida are extremely excited about this initiative.

We would like to ask you to add your name to the petition in support of this initiative. Click on link below and register your support.

We are expecting it to pass, however, your voice would be welcomed.

Please forward this email to other property owners you know in Florida.

(Fields marked with * are required)

http://www.nomorepropertytax.com/endorse.php

(end of email)

So, the taxation question exists for YOUR state as well as Florida:

Would you favor an elimination of property taxes by raising sales taxes?
What would the consequences be?

Imagine qualifying borrowers and home buyers without property taxes:

Would the result drive up sales prices again? Would this jeopardize borrowers ?
How do you think this would affect your state's economy?

Other insights or ideas?

Art Blanchet

Bill Quigley

Posted by Art Blanchet - Stranger in a Warm Land on 04/12/2007 11:58 AM

Comments (55)

property tax, sales tax, nomorepropertytax, florida taxes, property tax reform, art blanchet, bill quigley, yhym, your home your money

This post has been included in Wisconsin Information Dane County, WI Information Madison, WI Information

55 Comments on Would You Trade SALES TAX for PROPERTY TAX?

APR

2007

My first instinct would be to say no, only because property taxes are deductible and not all sales taxes are. Though, the flip side, is that sales taxes are more equitable, everyone pays rather than just homeowners. Plus, most visitors/tourists would be contributing to state coffers through a sales tax.

In Washington State, we only have sales and property taxes, no income tax. As a result both are fairly high. The property tax is approximately $.12/$1000 of assessed value and that'll go up due to recently passed tax levies. The sales tax in Seattle is 8.9%, but 9.4% if you're patronizing restaurants and coffee shops. The extra .4% is to pay off the debt on Safeco Field. I think a multiple tax system overall is better than relying on a single tax ... I would be against complete elimination of property taxes.

Wow, what a proposal. I don't know how this would impact me. I pay a lot in taxes all the way around (we in WI pay our fair share ya know) and am not certain that this would decrease what I am paying. In fact, with the way I spend money, it may increase the amount of taxes I pay and will probably not be deductible. I would probably not vote for this.

As far as this goes for Florida, good thing I am visiting this year :)

In Ca. we pay about 1.25% for prop. tax and it is a tax write off so I do not think we would favor it. Also we all pay property tax...if you own a home or two or three you pay for what you own and get the tax benefit for the same.

I don't think that eliminating property taxes all together would be a good thing. Sales taxes tend to be regressive in nature, that is they hurt poor people worse than they do rich people. Also, there is something to be said for paying your fair share in regards to the impact that you have on your community. A big house uses more resources than a small one, etc.

All that said, I don't think that it's fair for the entire tax burden to be placed on land owners. Why should everyone else, renters, tourists, etc. who utilize a community's resources get a free ride?

If you're going to replace any tax with a sales tax, they should get rid of the income tax in favor of a national sales tax. I know that it regressive, but there are ways around it...sounds like a post to me???

R.B. "Bob" Mitchell

ValueList Real Estate Services, Inc.

Ben Kakimoto - Seattle Condos

Ben, as Theresa can attest, our taxes are pretty steep in Wisconsin. Closer to a mill rate of 17, which was better than the old rate of 25 of my previous village assessment (which was raised 38%). We also have a state income tax and a sales tax near 6%.

However vehicle registration is fairly inexpensive ($55) without any annual "luxury tax" and we do not have forced inspections or emissions.

I tend to lean toward the multiple tax system, too, but it seems all the taxing entities like to play the "nudge" game. Florida - heavily funded by tourism - may be a different animal.

I have no illusions about my (slightly) reduced property taxes. The new mill rate is only to offset the higher assessments, then it will be "nudged" upward as well. Taxing entities have a far greater time-perspective than the average citizen, who has to live in the "here and now." They will not be short-changed for long.

No way. I would rather have a property tax. Most people never realize how much they spend on things.

I hope not too many people get "excited" about this proposal, as its been tabled till 08. And given our current legislature it will never pass, if it in fact gets that far. I favor it because the "haves" and the "have mores" spend a lot of money shopping and purchasing expensive items. It would give us "have less" people some relief from property tax. The downside is the "have nothings" amongst us will get hit. I'd rather see a property tax cut for people in the more modest price range houses, those of us just hanging on to our homes by the skin of our teeth. Don't get me started on the insurance nightmare here!

Terry Haugen - STAGE it RIGHT!

APR

2007

Taxes in Florida is a major issue.. Many first time home buyers can afford the payment.. but when you ad the taxes in they can't. Please keep in mind in Florida your taxes go by the purchase price of the home. Depending on where you are in the state in can range anywhere from slightly over 2% to close to 3% a year. And that is being homesteaded. So ouch!!.. In South Florida where the avg home price is 400k that is over $8000 a year just in tax before you start making your payments, insurance or if your if you have a HOA. What is even wilder is in West Palm Beach we had a huge price increase (like the rest of the country) but the tax system is way out of wack. One house was bought over 10 years ago in a neighborhood that was going through changes. That home was sold for 70k, now ten years later the neighborhood is complete and the houses are selling for over 700K. The person who bought ten years ago taxes (homestead) is roughly $1,800 a year and the people who just moved in is over $14,000 a year. These are the same age homes and roughly the same size. Just bought at different times.

Like in Ben I am in Washington. However in Washington we have different local options that can be added to our taxes. My property taxes are about 1/3 higher than Ben's but my sales tax is .08 which is lower. So having the ability to have local tax districts manage the tax rate is (in my opinion) a good thing.

I also agree that the sales tax here (food is exempt)is an equitable way to spread the tax to everyone. Especially to outsiders that may need our services but are not around to pay other taxes. Some argue that sales tax is regressive....perhaps. But taxes are to raise revenue not control social policy. Plus taking it off of foods makes it better for low income tax payers.

That was a really cool blog. Hey I wanted to ask you if you would please join my AR Group. I would be honored to have you. It is called:

http://activerain.com/groups/KentuckyProfessionals

Thanks so much and have a great day

Ben

I think that all comments are missing the point by a long shot...

Sorry Matt - you made good points but there was one big thing missing...

IN FLORIDA THERE IS NO STATE INCOME TAX... higher property taxes are a concession to the vast seasonal only Florida residents. Our Snowbirds are a big population - the same for foreign investors. We also have a huge number of simple vacation property owners... but THEY DON'T PAY INCOME TAXES so they do not shoulder any of the burden of filling the state coffers with tax dollars.

The seasonal residents also don't make many of their major big-ticket purchases here so we don't reap the benefit of this tax revenue either.

I do not agree with the "This is going to pass" because that is NOT at all what is on the table right now.

Also, Terry Haugen - this was NOT tabled - a different tax referrendum WAS tabled for the '08 elections to be put into effect in '09... but if you have kept track of state politics, we have a new Governor who has the State Senate in session working on the problem RIGHT NOW.

Affordable Housing Initiatives in South Florida: Part 6 - The Battle for Mordor Begins is my most recent blog on this problem... I have not found any new information that these plans are not the ones currently in session... at the same time, they're too sweeping and will likely be toned down.

If you'll notice, there will not be an altogether elimination at this point - it will be a 50% cut off the median value OR your assessed value whichever is LOWER! So someone with a median priced house of $450,000 or higher will get a $225,000 homestead exemption... someone with a $200,000 house will only get $100,000 exemption. Then the tax rate will be calculated on the 2001 scale.

Then, the Senate has to figure out how to deal with the non-homesteaded and commercial properties... and renters! Renters pay 6.5% sales tax on rent!

This will be somewhat off set by a hike in sales tax... but even then, for the middle class, this will be FAR lower than paying a state income tax!

Florida Property Tax Update - Several New Ideas! is a prior post outlining some other options...especially those that will recapture some of the revenue loss...

But part of the problem is that the local governments are screaming for their FAT... there is no one out there that wants to cut the fat out of our huge budgets so instead schools, firefighters, police, libraries, etc suffer when revenues drop.

The only way for this to be truly effective is for something to be decided SOON.. and then for the Senate to sit down and revise the budget.. it must be trimmed and then we won't NEED the revenue as much.

With the addition of the Bio-Fuel alliance, further foreign investment and other taxable entities entering the state this year, Florida will be just fine.

I guess we are all looking at this issue from a differnety perspective. I'm a homeowner hard hit by taxes and insurance, and some of the other commentors are in the business of providing money to buy houses. I'm not counting on the current adminsitration to do anything regarding tax relief. This was not a major issue until the past administration allowed the insurance companies to run roughshod over the state. Insurance premiums coupled with taxes are putting alot of Floridians out of their homes. It will be at least four long years before we can see any kind of resolution to this situation.

Terry Haugen - STAGE it RIGHT!

Terry Haugen

Thanks Terry,

You've written two great clarifying comments about the realities of Florida property taxes and its twin partner in crime - Insurance.

It has got to be so difficult to get first time home buyers in when the two "incidentals" (taxes and insurance) - which is really what they were when I lived in Utah - are the deal killers. Out-of-state buyers must think those two to be misprints on their documents. When I first heard of the insurance I was floored!

Good luck there.

Art

David A. Podgursky, MBA The Mortgage Go To Guy!

Hey David,

Thanks for the great information and insights on the Florida situation - sounds critical. I'll be hooking up with your blog to read past posts and to watch how this develops.

Let's assume they do away with property taxes and increase the sales tax 2.5% to 8.5%... in a perfect world the following will happen:

Homeowners will have several hundreds of extra disposable income each month. (The possibility to spend more money and have a better quality of life by not stressing about the high costs of owning a home)
Investors can adjust their rent roles to a lower level (due to their tax break that is proposed for investments) and offer them (the renters) more of a disposable income.
The elimination of property taxes will allow more first time home buyers the opportunity to afford a home in the Florida market.
The increase in disposable incomes will most likely go towards spending rather than saving. This will increase the revenues generated from sales tax greatly coupled with the higher sales tax rate.

Now, this is not a perfect world... and as such #2 will most likely never happen. And if anyone cares to do the math for #4, there will need to be major spending to equal the revenues generated by property taxes. (Matt's example of a $14,000 tax bill equals spending an extra $560,000 per year. $560,000x2.5%=$14,000. You can't use the 8.5% figure because we are already paying 6% sales tax now. The 2.5% is being used to adjust for property tax)

Now to argue the statement that was made about the "Have nothings" not being able to afford the 2.5% sales tax increase... let's please the "Have nothings" by raising the Florida minimum wage from $6.67 to $6.84 (or a 2.5% increase). Let's do some simple math... that is only $.17 increase or $6.80/40 hour work week. So, if the pay went up to equal the tax increase and assuming they keep their normal spending, there would not be an issue for making "have nothings" situation any worse. If the pay did not go up, then I am sure that one could find a way to budget that $6.80 into their spending habits.

Now, I am not so sure that an all-in-one tax is the best thing, but it is a start along with some of the other proposals that are out there. I know that our politicians have their work cut out for them as Gov. Christ is threatening to keep the current session open over summer until this issue is resolved. If they can get both the tax issue and insurance issue under control, the Florida economy should improve immensely due to the lowering of these expenses and putting more money into the Florida residences hands.

APR

2007

Terry,

I think that is a bit of a stretch to believe that I live in Palm Beach County and don't feel the same pinch as you do because I am a lender... actually I'll reserve the stronger sentiments because they'll just get mad at me. It is just so odd to me to believe that I wouldn't think of my own issues and that I would think as a lender. Lenders will LOVE when property taxes come down because more people will qualify for loans! Some of the renters that have been trapped will soon be able to afford to buy up some of those condos that are just sitting on the market.

I'm currently paying almost $500 a month in taxes! It is absurd to think that I wouldn't benefit from this and that I wouldn't want the change for me and my family.

Jason,

you make good points... and I think the simultaneous change in minimum wage is an interesting idea. The only thing I have to say is that it seems that the hardest hit sector is the middle class and the middle class is usually hit hardest when minimum wage jumps. They are the people who own the businesses that pay minimum wage... they are the people who manage people that work for that wage... .and when that wage comes up, something has to be cut or prices need to go up somewhere else. Either products and services get more expensive (2.5% more) or someone gets fired... but it is a good thought

David,

Thanks, but there is one thing that you overlooked with the comment of it will affect the middle class the hardest. If the property tax is removed, people will have more money to spend. Therefore, that middle class business owner should theoretically see an increase in sales to accommodate that pay raise. If not, again $6.80/worker can be budgeted into the business plan. The $.17/hour increase is nothing like the $1.00/hour increase we had a year or two ago, and that did not affect too many people because it put more money in the worker's pockets to spend.

APR

2007

This is the most political of issues and the complexities go beyond much needed relief for home owners who are suffering from high property taxes and high property insurance premiums. The sales tax plan has caught everybody's attention because it shows some daring innovation and Floridians have always enjoyed the contribution of tourists and part time residents to our economy (and tax system) through sales taxes.

But there are several problems here. First, if the taxing authority is relinquished by the local governments to the state - where are the budget priorities for the local governments going to be set? In Tallahassee? I would be opposed to that sort of structural change in our system of government. The basic problem is that at all levels of government, the public demands additional services and wants government to pass the costs on to someone else. I believe that the local governments (counties) are best able to decide the allocation of scarce resources to meet the needs of the residents in that county. The county governments are best able to receive input from local interest groups and residents and to make the difficult decisions.

Sales taxes are considered to be among the more regressive - that is they impact most those who can least afford them. Do we really want to relieve homeowner taxes by shifting a major part of the tax burden to local residents who cannot afford to own their homes?

I hope that Tallahassee will consider reasonable caps on real property tax increases and that they will address insurance and tort reform to reduce insurance costs. But the state will have to provide re-insurance guarantees for firms writing insurance in the state to prevent the possibilities of catastrophic losses in another bad hurricane year. But I am not looking for change alone - I am looking for a solution that improves upon the problem without significantly shifting the structural balance of power in the state.

I am pleased to see lively discussion in forums such as ActiveRain. I hope those with strong opinions will share them directly with their legislative delegation in Tallahassee.

Ted,

Welcome to AR... I see that this is your first comment ever to the AR community, and you picked a good topic to jump into.

I am sure that this topic will go round and round, just as it is up in Tallahassee. I am still pondering the different proposals to see which one or ones could be the best solution to the problem. They all have their pros and cons.

For your last comment, I am doing my... I am the VP for the Young Republicans of Lake County (Florida). Last month we had the county property appraiser be our guest speaker. Next month, I believe we have scheduled the tax collector.

Thanks, Jason

I am new to AR - but always willing to comment on a political question. Sometimes people in a large group (like Realtors or Mortgage Brokers) do not realize how easy it is to gain access to elected officials who will be glad to have an opportunity to speak to a group. I am a member of the Polk County (FL) Republican Party Executive Committee. When we had a significant property tax increase recently, there was substantial opposition within our group. Unfortunately most of our group did not attend some of the public meetings forming the budget goals - and the Commissioners did not address our group to explain their decisions. It can be a difficult situation and can only be solved by dialog among those with opposing points of view and communication by individuals and groups with the decision makers.

I will be surprised if major changes are made in this session in Tallahassee as the Florida House and Senate are coming at the problems from very different directions.

I will look forward to reading your comments and others here and meeting you sometime when I am in Lake County. (Hi Neighbor)

APR

2007

Ted,

You make a good point... if one doesn't speak up, then there is no one to hear his/her opinion/views.

Give a shout the next time you are up this way... Or, I am trying to get an AR members gathering setup at this year's FAMB convention in Orlando. We could meet then, too.

I do not see how it is going to be fair to the people that are not owners. How about increasing homestead exemption from a flat $25,000 discount to a 25% discount of the appraised value?

APR

2007

I think the idea to convert from a property tax system is one of the worst I've heard in a long time. I do think an adjustment to the homestead exemption is in order. I also think local governments should be adjusting the millage rate when the rise in home values greatly exceeds the general inflation rate rather than taking a windfall in extra tax revenue.

Those concerned with "affordable housing" could make major progress on that front by passing a state constitutional amendment banning "impact fees." Nobody can profitably build low cost housing if it cost $25,000 just for the right to apply for a building permit.

Carmen,

A homestead exemption based on a percentage of the appraised value seems like a fair way of doing things. However, you will have arguements that those who have more expensive homes and can afford to live in them should pay more of a tax for them. This proposal is geared towards helping those with money and higher valued homes pay less of a tax than what they are currently paying, while those with lesser value homes still pay about the same the same amounts. For example: Currently $25,000 discount means a home valued at $100,000 pays taxes on $75,000. A home valued at $1,000,000 pays taxes on a value of $975,000. With this proposal, the first home still pays taxes on $75,000 while the owner of the more expensive home now pays on a value of $725,000.

Greg,

Good to see you again... I believe the impact fees here in Lake County have gone up to $35,000 now. Here is an idea based on your adjusting the milage rates: Let's treat property taxes like an ARM. When you buy the house, your milage rate is determined based on certain factors (of course after the milage rates have been fixed to a more realistice figures). That rate is fixed for 5 years. After the 5th year the rate can adjust up or down based on the inflation rate, appreciation rate of the surrounding neighborhood, and various other factors. The rate cannot go up or down any amount greater the caps that are set for that area. Let's throw in another feature, when the homeowner buys, they can opt which tax structure they want (IE 3 years, 5 years, 7 years, etc). The longer the fixed tax rate period the slightly higher the rate (just like an ARM).

I like the idea Jason. Affordable technology exists to handle such calculations, but I'm not as sure enough competent government employees are available to administer the system.

$35,000 impact fee? I don't think county governments truly understand what those fees do to the marketplace. I understand the need for rapidly expanding services, but such large fees greatly distort the supply of housing in relation to demand.

Some developers attended the county growth meeting last month... boy did they have an earful to dish out. But then again, Lake County has been one to want to limit growth and having the high impact fees is one way to do it.

There is a tension between competing interests here - which is usually the way to get all the facts on the table. The rapid increase in population in what have been more rural counties in Florida is puting a strain on the county infrastructures. Someone must pay for the new roads, sewers, libraries, schools, street lights and other county services to accommodate the new population and the commercial entities to support the new residents. Pass the costs on to the property tax base and the citizens scream they were already here and shouldn't pay for the new development. Use impact fees to pass some of the new incremental costs on to the new residents who directly benefit and the developers scream we are pricing them out of the market.

What's a mother to do.

Ted,

Everybody has their side of the story. It just amazes me that many people don't want to look/listen to other side to see where they are coming from. If they did, then maybe these issues would be so much easier to handle and to come to resolution. But it ends up being one party (government) in the middle trying to keep the peace and in the end, it gets blamed.

Thanks, Jason

If it was easy - anybody could do it.

APR

2007

It is so easy to see why the issue is not resolved - everyone has an opinion. I guess those that spend the money like the idea of property taxes as the income can be controlled by the tax rate on property. The sales tax would fluctuate based on consumption. What would the impact be if the money flow was interrupted? Until a better solution is proposed, I prefer the property taxes.

Received this great communique from David Podgursky (The Mortgage Go ToGuy from Boynton Beach, Florida). Check it out. - nice job.

Thank you for thinking of us David.

Florida Property Tax Update - Republican Bill Passes in the House

APR

2007

One order of Crow...to go , please

It now looks like they will make more significant changes than I thought during the current session of the Florida Legislature.

I do not trust the sales tax plan for the local control issues I voiced earlier - but the Governor and the leadership may have the votes they need. And the House and Senate may, in fact, reach an agreement to give the Governor what he wants.

On a fundamental level I prefer taxing consumption over taxing ownership.

The most fearful part is the unintended consequences of such a major change to taxation could be severe. The unpredictability of revenue is a major problem for local governments. Several major projects will likely be put on hold in the Orlando area, and the time delay alone may be enough to kill a project.

Absolutely. Raise the sales tax and do away with property tax.

APR

2007

Hmmm Jason, you seem to promote a lassaiz-faire type of economic situation. I do have a problem with your tenets of the "perfect world" and they are thus:

1. Point #2 will never happen, not because of greed but because many investors are upside down in rents. Maintaining rents will help cover that gap.

2. While you are correct with point #4 about increased spending, a decent portion of this will likely go towards moving up in the housing world, not in goods.

My personal opinion is that the elimination of property taxes is a pipe dream that should be permanently shelved. Taxes are not a bad thing, excessive taxes are. I also feel that sales taxes are regressive in nature. Florida sales tax at 6% is plenty, no need to raise it.

What is needed is a rollback or modification of property taxes such that we all pay less, but not eliminate them. The state needs money and those thinking you can make do without income or property taxes aren't clued in. Florida has a terrible educational system from elementary school on up and cutting funding is not the way to go. At the same time I know that these local governments screaming for funding are the same ones that made do several years ago when they received less money. Now that prices have gone up and taxes have adjusted, they're pulling in a lot more. I need to see that translated to better schools.

For those wondering, my focus is on education because, 1) it's one of the most important issues, and 2) I'm from an area where public schools might be better than private schools in S.Florida. That's an indicator of how far behind the educational system is here.

Everyone has to bite a part of the bullet and a happy medium can be achieved. But to think that an elimination of property taxes is the answer, perhaps a S.Florida education is behind that mindset....

- Tchaka

APR

2007

A sales tax increase replaced the property taxes my parents paid in Dekalb county Georgia several years ago. After a few years they now have the higher sales tax and a "new" property tax to pay. Someone has to pay for the services. $35,000,000,000 cannot be cut from revenue without a reduction in services. I don't hear much talk about what spending is going to be cut due to the loss in revenue.

Tchaka,

I am not trying to promote a "hands off" econonic situation. I am one for consider all the options and don't just take the option that elimiates a tax (it just means the tax is gone to get a new name and a new way of being collected... whether it be an imidiate change or something in the near future.)

Also, I did point out just as you did that situation # 2 will most likely never happen. And I am not sure that I agree with your reasons for #4. Right now with the houseing price adjustments, most consumers will more likely buy "toys" over upgrading to a new home. The reason I believe this is because most people right now may already be upside down in their homes. The removal of the sales tax will allow them to at least stay in their homes without fear of foreclosure. Because they can now enjoy their homes, they will spend money on that home by buying the home theaters, nice furniture, and other "toys" to make the home "nicer."

Is rolling back taxes to the 2005 level or even the 2001 level the best proposal? Who knows... at least it is not elimiating a tax.

In referrence to your comments about the school situation in S. Florida, I am from S Florida and attended a private school. I am not sure what area of S Florida you are referrencing, but where I grew up, the private schools greatly exceeded that of the public school system. And don't get me started on the schools needing money... that is a whole other issue (the Florida lottery).

Jason -I see the confusion in my sentence about schools so allow me to clarify: I am from an area outside of FL (ie, Northern Virginia) where public schools might be better than private schools in S.Florida. Hopefully that clears it up.

Point #4 is up for debate and while the natural tendency is to spend disposable income on goods and services and I'm sure you're right that many will choose that route. I do know (due to my mortgage and realtor background) that one major reason for the stagnant real estate market is S.Florida is due to affordabilty particularly in terms of the tremendous bump in taxes. If this were lessened, I see more movement. Perhaps the true route is a combination of both.

Greg - Your comment is right on the money (pun intended). Funding is needed and has to come from somewhere. I do agree that property taxes in FL are out of control and need to be reined(sp) in somewhat. But eliminating property taxes altogether in a state that doesn't have income tax either is irrational.

- Tchaka

Tchaka,

I appreciate your clarification; however, I am not sure why you are referencing private schools to make your point about the public schools and the funding of the school system in Florida. Assuming you are correct that S. Florida private schools are below par to the VA public schools, you are comparing apples and oranges. Private schools have their own curriculum that is not governed by the state and receive funding from sources that are not of the state (That is why they are called private schools).

Now, I will not argue that there is a problem with the public school system and its funding, but your reasoning is flawed: using a one state's governed program and comparing it to another state's non-state governed program. Plus, you do not even know for sure if your statement is valid because you are using the term "might." Perhaps, you would be better to say: "Compared to the public school systems of the NE, especially where I come from in the northern parts of VA, there is a big problem with the Florida public school system and the funding of it. By eliminating a tax that is supposed to be going to the improvement of the public school education, we would only be making the situation worse." With a comment like this, you are not coming across as offensive and you are using information that is generally accepted as fact.

Let me say. I live in Florida. Born an Raised. Been here all my life and I will probably die here. The thing is, that inusurance and property taxes go hand in hand being a problem here. Now, the reason that it has become so threatening to our economy is that Florida is growing, and growing fast. But not just from your every day person. The rate of illegal immigrants in Florida is STAGGERING. Now, Im not here to debate Legal vs. Illegal. But the fact of the matter is, Illegal is outweighing the legals in the bottom half of the state.

That means that in order for the state govn't to have schools, and social programs to handle these large amounts of people, not only are taxes going up because of home prices, the millage rate is going up to. Afterall, that money has to come from somewhere!

I think that it is more than fair to get rid of tax on a homesteaded property, and raise a general tax to 8.5%. All is fair, everyone is paying taxes that way. Florida is a whole different bag of apples when it comes to things like this. You really have to be here to understand the full degree of the situation.

I see your point and might have gone that route is sparring feelings was my concern. It's not.

My point is to show how horrible the school system is in Florida (I'm actually referencing S.FL) and if you are not able connect that my comparison is purposely written that way to depict how low education appears to be in many areas, well so be it. Your dissection of my post may serve to make you feel better but it doesn't change my stance.

- Tchaka

Liz, I have no idea if illegals outweigh legals in Florida (or if just in the South). I do believe that's an issue that needs to be taken up with the state and/or federal governments. Leaving aside the regressive nature of a sales tax, do you believe that raising sales taxes to 8.5% will provide sufficient funding for the state?

Another item to toss into the ring based on your post is that while I will enjoy no taxes on my home, I will continue to get beaten down by high taxes on any investment property I own. I feel I will benefit more by finding a compromise through lower taxes. What's your take?

- Tchaka

Tchaka,

That is fine to say that the school system in S. Florida is horrible (it is your opinion), but the private schools do not fall in that category. In fact, S Florida has some of the top private K-12 schools in the nation. If you are going to state something, please make sure that your facts are correct.

I can see your strong feeling towards your local public school system, but do not state that private schools are lacking too. Perhaps, you should takes this energy and vocalize it to your local government so that they can do something about it, as this is a local matter for you.

APR

2007

1. I was speaking with an out-of-state client today who was telling me that they have no property taxes, but they killed on every other tax. Anything the government does, is going to backfire. Their only concern is putting money into their own pockets. I have no respect for any party anymore.

2. I'm pleased with the schools in Port Orange, FL. My daughter is in the Dual Enrollment program. As a junior in high school, she's has already taken 4 classes at Daytona Beach College and will do so again next year. In this program, ALL expenses are covered. We don't even have to pay for her books. She is also a straight A student and will have a full scholarship for the only 3 years she'll have to attend the college of her choice, once she graduates from high school. As a matter of fact, she could graduate high school right now, but I'm keeping her from rushing into life.

APR

2007

Florida does not have a personal income tax, which is wonderful. Our increasingly higher property taxes are starting to make people consider moving to other states. Those who can afford to have a summer home here can also afford to pay property taxes. Giving full time residents a tax break would be beneficial. Right now people who have lived their whole life here and are on a fixed income have to worry about being able to keep their home in the future. This would eliminate that problem. Our sales tax is extremely low. Offsetting the elimination of property taxes for full time residents with higher sales taxes seems reasonable.

Barbara, I agree with you that giving full time residents a break would be beneficial. But that's pretty much the end of our seeing eye to eye.

I'm not sure where you get the idea that those who have a summer (or more appropriately, winter) home in FL can also afford to pay these higher property taxes. Sure some of them are wealthy but there are many who love FL but aren't made of money. Having your property tax double or triple will hit most people in the pocket. And I'm willing to bet there are as many or even more people who have investment (instead of 2nd) homes in FL and when you do your models and suddenly you're responsible for an extra $5k of taxes, that changes things for most. You're looking at investment money leaving the state.

And why should property taxes be eliminated altogether? Quite frankly, I have not heard anyone upset because we have property taxes, people are upset because property taxes are TOO HIGH. So we need to solve the problem by getting them low again. Elimination is an altogether different issue from lowering.

- Tchaka

MAY

2007

In Tampa we pay 2.7% and it is KILLING resales...I am totally in favor of a higher sales tax and eliminating the property tax.

Jackie, I'll pose the same question I've posed to others: why do you feel property taxes need to be eliminated? If they're too high, why not just lower them?

- Tchaka

MAY

2007

I think that property taxes have to be eliminated in Florida State. There is no comparison between owning and renting. Especially, in South Florida. In South Florida a person can rent a condo for 1/3 what it would cost to buy it. This is not going to work for too long. Mainly because renters are not paying anything to the State. This is why they want to stop property tax and raise sales tax. I really do not know what took so long. Nobody is going to buy property unless they stop property taxes, and gradually, homeowners will sell at a lose or foreclose.

If we eliminate property taxes, then let's bring back income taxes.

- Tchaka

Just lowering property taxes will not help. Like I said above, the State has to generate more revenue from people that rent. Whether it be people that rent for a week, a month or forever. Because Sales Tax Revenue was down last year as well. This is probably because the State is killing homeowners with property taxes and they have no money to spend. Sooner or later, the well will run drive. They have to kick up the revenue from the non-homeowners or it will just get worse.

Like I said, let's bring back income taxes.

And don't be afraid to log in before posting.

- Tchaka

SEP

2008

OCT

2008

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