Would You Trade SALES TAX for PROPERTY TAX?

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. 

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 

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.

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. 

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

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 

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

- Tchaka 

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

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

- Tchaka