Saturday, October 25, 2008

Carla Howell Inanity

Today's Globe includes an article on the T waiting to issue bonds until after the election, fearing the hike in interest rates due to worry that Question One could pass.

Included in the article, though, was this whopper from Carla Howell:
Carla Howell, lead advocate for Question 1, said yesterday that taxpayers would benefit if the state had to hold off on issuing bonds to pay for more projects and instead learned to operate within its means, just as taxpayers do.
Because taxpayers always operate within their means...

I'm sure Carla Howell has never taken out a loan for her mortgage, or for a major home repair, a new furnace, a new car - or anything of the like. I doubt she ever uses credit cards to help with her expenses, until she can pay them off soon after. I mean, who's ever taken out a loan before? That's something only governments do...


Oh, wait.


Anonymous said...

Much of what Carla Howell says is appealing-small government, lower taxes, a $3700 annual savings.
But I don't pay $3700 a year in taxes. Oh, wait, she means the 'average' taxpayer, not me.
41% waste in state government? I think not!
Someone should have debunked Carla Howell's fairy tale long ago. She never talks about specifics.
Maybe it should have been the Globe that debunked her.
The proponents keep saying they want to cut govt. Why don't we start with the $$ wasted by DSS or DMR for those least able to care for themselves? Or state colleges? Why should we educate people? Why don't we eliminate ALL local aid to cities and towns? That way, each homeowner could pay the actual cost to educate their children, about $10K each. And when the local aid stops, we can shutter our libraries, who needs to read books anyway? Close our councils on aging, let our Seniors fend for themselves.
If you ask a proponent about specifics, they can't offer any. They don't understand state govt, where their tax dollars go, and are willing to follow the likes of Howell over the cliff without the facts. Not me!
Keep blogging, Ryan. This is an important issue and Carla Howell discredits herself each time she speaks.

Anonymous said...

One thing about losing local aid, why would I want Beacon Hill to get the money in the first place then send it back to my town. I'd rather just give it to my town in the first place. I would be happy if my property taxes went up equal to what I'll save in state income tax, because I know that my property taxes are spent locally, I can go see the new highway barn going up. It won't have the strings attached from Beacon Hill. You can't say it would go up more than what I'm paying now, since then things wouldn't be balanced unless Beacon Hill magically multiplies the money. And wouldn't it be nice for the working poor to suddenly get a pay raise, no more state taxes. The burden would be shifted to those rich property owners, a very Democratic idea.

Anonymous said...

Shifting things toward higher property taxes might actually bring in more money to the cities and towns. I know a lot of tradesmen who do jobs "under the table" for cash and don't currently pay state income taxes. I get two prices when I call my plumber, a "cash" price and a "write a check" price. If taxes were based on property it would be a little harder to hide.

Ryan Adams said...

Anon 5:30,

It would be nice if the aid came from and stayed in local towns, but a) towns can't tax income, b) property taxes are far less progressive - and, thus, unfair - and c) some cities and towns just couldn't fund everything necessary given their resources (and, no, I'm not just talking about urban areas, also towns that have little to no commercial base). So, the idea's not bad, it just doesn't work in practice.

By the way, while a $1 million dollar McMansion may bring in more prop tax revenue than a $250,000 3 bedroom/1 bath 100 year old colonial, the differences between that colonial's taxes and the income taxes each homeowner would be paying is great. The cheaper house's taxes would be around half of what the million dollar home's taxes would be: case in point, my home is valued by my town at $280,000 and we pay $6000 in prop taxes. The town is selling an old fire station which, when fixed up, is expected to be worth nearly $1 million as a residential home - and bring in $9,000 in property taxes. A property tax system means people with more modest homes are going to be paying a disproportionately higher rate than they do in income taxes. For example, the $250,000 house may have a family earning around $70,000 a year whereas the million dollar house may have a family earning $300-400k a year... The family making $70k would be paying $3,500 to state taxes, the family making $300,000 would be paying $15,000, or 4.3 times more than that middle class family. Switch the state to property taxes and suddenly their burden would fall to around 2x that middle class family... so switching to property taxes as the defacto state tax would essentially double the burden of funding this state on the middle class, the folks who are already struggling to get by.

Furthermore, someone's home isn't necessary a good reflection of what they can afford to pay in taxes. There are many retired people living on fixed incomes that worked hard for their home, paying off their 30 year mortgage, but would be forced out of it because property taxes doubled as a result of Q1's passage. Thousands, likely. This includes seniors living in expensive homes.

On the other hand, there's a lot of people who at one point could afford a nicer home, but now don't have the same earning power and only have such a nice home because of their past. Or they inherited a home they otherwise couldn't afford. That accounts for a lot of people, including the home I live in... which is pretty modest!

So, if we suddenly shifted the bulk of our state's taxes from income to property, we'd be putting tens of thousands of people out of their homes, further straining hundreds of thousands (or millions) of Mass residents, while still facing massive cuts in many communities because of 2 1/2 override constraints.

Ryan Adams said...

No, Anon 11:55, it won't bring in more money. Are there people who do things under the table? Sure, but that represents a tiny percentage of the over all economy. As I noted in my previous reply, the burden would likely double on the middle class if the state had to switch to a state-wide property tax instead of income tax, as they do in New Hampshire. We'd still have to make massive cuts, as well. Note that NH has a much higher percentage of taxes that they pay over all than Massachusetts - they're in the top 10, we're either 25 or 32 depending on the study. The only people who make out by switching to a property-taxed based system of primarily funding the state are the wealthy, those earning hundreds of thousands a year.

Would your taxes go up more than they are now? It depends. If you're family income is less than around $100k or less and you own a home, yes, it will. Or at around $100k you may "save" some money if you don't rely on government services. I say all this because services will still get absolutely, positively slashed to smithereens if we switched to property taxes, because our state's middle class couldn't afford to levy a property tax that would bring in the same kind of revenue as the income tax. So state aid would go down, which means wealthy towns would get hit the hardest, since the state would have to scramble to make sure cities like Boston, Lynn and Springfield could actually afford to fund a school, never mind a decent one.

So, that means most small towns will be forced to raise local property taxes to fill in the rather large gap, $10 million and up. Your town will still be limited by prop 2 1/2, meaning most towns won't pass the override, many confused by the various, new property taxes. These taxes will be LARGE, more than what many in the middle class is already paying in income taxes. Making things worse and more confusing, these new taxes could be coming in all at various points of the year, instead of trickling out paycheck by paycheck, meaning people may have to come up with big lump sums - at least if it's anything similar to how we pay current property taxes.

So you can be angry at "under the table" workers, but that's a different problem than question 1. Create stricter laws, or enforce current ones. People who break laws do so at their own risk. Keep in mind that we also have sales taxes, excise taxes, corporate fees and all sorts of other taxes they can't skip.

Finally, maybe you should be happy that there are under-the-table plumbers to choose from. Imagine if no one could get away with that and you had to hire a plumber who did pay taxes on every sent he or she earned. It would likely mean you'd have to spend 30%-40% more in costs for the project. As the saying goes, you should be careful of what you wish for.

Anonymous said...

So if we get rid of income taxes the property tax system will be required to pick up the slack and you say that unfairly burdens the lower income workers. So the property tax system is inherently unfair to begin with. Why don't we then get rid of property taxes altogether and double the income tax system. Put on an astronomically high gas tax, then get rid of other taxes. It punishes the Hummer set which I'm sure you love, rewards the MBTA riding tree huggers (less global warming), can hardly be avoided by the income cheating underground workers and is a consumption tax which is inherently more fair. By the way the underground economy is pretty big.

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