Property Tax Easy to Hate, Tough to Mess With
The thing about your property tax bill isn’t just that it is big — that, it is. The irritating thing is that if you’re a homeowner or own property for rent, you see it as a lump sum.
Sales taxes take lots of money out of the average Texan’s wallet, but they don’t come in at the end of the year in a single bill. You get to see your income tax as a single number every April 15, but most people have already paid most or all of that by the time they see it. And ...
Comments (10)
Julie Martenson
The only difference is the fact that property owners carry an unfair, disproportionate and larger burden. You can have ten children, live in an apartment, use public education and not pay a dime in property taxes. If we modified the current system by increasing sales tax and taking some of the burden off of property owners there would be wider disbursement of responsibility. That seems more fair than the sytem we currently have in place. And for those Ag exemptions, that is a total disgrace as the original purpose was to support an agrarian economy not fund a pet cow, miniture donkey or goat.
Becky Goetz via Texas Tribune on Facebook
How about lower property taxes, lower sales taxes, and a state INCOME tax? #waitsfortrollstofreakout
Steve Fischer
I'm for something that cuts property taxes because sales taxes are discretionary. If the recession is hurting me I buy less and live with less and thus would play less sales tax- but I can't cut my house in half.
Shawn Byars via Texas Tribune on Facebook
Billy Hamilton 's assessment really isn't a fair one. He neglects to consider a one time sales tax on real estate in a tax swap. He also doesn't mention how the Bob Perry's of Texas have gamed the system to benefit their respective industries. If the sales tax were broader and fairer, the gap would not be so large if the property tax were eliminated.
Greg Ellis via Texas Tribune on Facebook
A large portion of the sales tax is lost to internet sales, and that is only going to grow larger. It may be time to consider REPLACING property taxes and sales taxes with an income tax.
j. davis
Your glib statement that "[p]roperty owners with cows and hay get a break (even if they’re in cities and have been able to wrangle agricultural exemptions)" only serves to perpetuate the misunderstandings most people have about the two special methods of appraisal that are available for qualified land designated for agricultural use and qualified "open space land" and the numerous myths concerning those appraisal methods.
In the event you'd care to educate yourself about these constitutionally required methods of appraisal for land designated for agricultural use and for open space land, you can't do better than to consult the Comptroller's Guidelines for the Appraisal of Agricultural Land, which you can find here:
http://www.window.state.tx.us/taxinfo/proptax/agland/index.html
Dave Rip
The ag "break" is actually a type of appraisal, which is based its ability to produce agricultural products. This usually results in a lowered tax liability for the property. The tax code is very clear though, it is not an exemption.
Sam Davis via Texas Tribune on Facebook
That's a great idea. Sadly, our legislature will pander to their supporters and never let us have a chance to vote on this idea. The lowering of property taxes is one of the reasons we are facing a shortage in the state budget. The much-touted larger sales tax falls disproportionately on the poor as people with money and accountants can find ways around paying their fair share. Don't expect Texas leaders to do the sensible thing but I get the idea you understand the problem well.
GS Crispus
Julie, thats not how property taxes work. You are also forgetting our state is run off of sales tax as well. If you are a renter, you pay property taxes through your rent to a landlord (Econ 101: Business owners will pass the cost of taxation to the consumer). Furthermore, the property tax credits and loopholes we have in this state tend to favor large landowners in the first place. It is a regressive tax in that sense.
The second method of funding our state services is through sales tax. It is also a regressive tax that disproportionately taxes a larger percentage income of a lower income wage earners (those who may live in an apartment or have multiple children).
In otherwords, if I make $20,000 a year and pay an 8% sales tax on the basic needs of life (as everyone does), then the sales tax hits me far more harshly than someone making $100,000 a year or more. This is a regressive tax, and it is very painful to the wage earnings of those at the bottom end of the spectrum.
We do not have a progressive income tax in this state, and thusly, the burden of government cost falls on the lower end of the spectrum of earners. Even if we did, with federal credits for state income tax, and home mortages, we tax system would tax those at the bottom end more than those in higher brackets. The progressive income is also something called an "automatic stabilizer." This means if your income falls dramatically, you are not paying the higher percentage of a progressive tax. Conversly, if you lose your job, and have to eat, you will still be paying sales tax and the property taxes of your home or who you rent from.
We have an unfair system, but as much of history has shown, it is a system that favors those at higher incomes.
V Marshall
I always find the discussions of a lack of income tax being the reason for our problems interesting. I grew up in another state with no income tax and my entire family still lives there. Interestingly their property tax is substantially lower than Texas' and they still assess property at slightly below market value rather than the 10-20% higher that most tax boards in Texas resort to. What they do have is a business and occupation tax and they collect from ALL business. They even have a hotline where you can report business owners who are operating without a business license. So even landscapers, home builders and renovators, painters, and all the other service providers have to pay the tax on their profits.
Another way to broaden the base of property tax collections would be to charge apartment complex owners a residential rate rather than the business rate. Perhaps allowing exemptions for full time students so that parents of college students don't get stuck paying property taxes on 3 or 4 dwellings. If you are living in an apartment, you should be contributing at the same rate for emergency services, hospital districts, school districts as homeowners and renters of single family homes.
The problem in Texas is that for too long they have been able to survive on tax revenue from the gas and oil industry. That presents problems when (like now) drilling/fracking declines due to low prices.