Name your favorite tax

Go ahead. I’m waiting for it. Any time now. What? You don’t have one? I’m not surprised. Taxation has gotten a bum rap since ancient times.

Studies have shown that people are into instant gratification. People will choose the lesser reward right away over a delayed, greater reward (up to a certain limit). So is it any wonder that we have little patience for paying taxes? The reward isn’t just delayed, it’s not always directly associated with having paid the tax in the first place. Three words: “taken for granted.”

In Florida, people are particularly impatient with property taxes… and with good reason. Until recently, property values have gone through the roof, and the taxes have gone up with them. Local governments have reduced the rates somewhat, but with the underlying increases in value, the taxes due have still gone up… in some cases by staggering amounts.

So over the last couple of years local governments have become everyone’s favorite tax-collecting whipping boy. Everyone wants to know where all that money has gone. Why do local governments have to spend so much money? Surely the cost to run local governments didn’t go up that fast… did it?

To be honest, I don’t know the answer to that question… but here’s a little food for thought. Jeb Bush was in office for 8 years in Florida, and in that time he cut state tax collections by an estimated 15 billion dollars. By most accounts, many of these cuts came in the way of corporate, business, an intangibles taxes. What do most of these taxes have in common? They tend to be taxes that people of “means” pay… but I digress.

So Jeb and the legislature did a little belt tightening and cut funding for state services, right? In some cases yes… but not all.

From the March 27, 2003 St. Pete Times:

County commissioners from across the state criticized Gov. Jeb Bush Wednesday for pushing billions of dollars in “special interest tax cuts” and blasted the Legislature for shifting the costs of state programs to local property taxpayers.

Remember when those kinds of stories ran during the Bush years? I do. Bush was in office during the eight years between 1999 – 2006, which means all that tax cutting (and some of that spending shifting) occurred during that time when property values were going up and local governments were spending more money. And it’s not like Florida (state government) was flush with cash when Bush came into office. Compared to other states, Florida ranked 49th in per capita state spending in 1998 – the year before Bush took office. (Florida ranked 47th in 2005.)

So relatively speaking, Florida spent a pittance before Jeb came into office, and from there cut state revenue. Considering how much money Florida was spending per capita before Jeb came into office, it’s hard to make the argument that state government was wasting a lot of money. If that’s the case, there’s only one way to cut that much money… reduce services, or have someone else pay for them. And mind you… they did all of this at a time when Florida was growing at a relatively high rate (in terms of number of people), requiring MORE spending on the kinds of non-recuring infrastructure improvements that are needed to sustain that kind of growth (roads/transportation, schools, etc). Who do you suppose had to pick up those costs while the state was cutting revenue?

So now the special session of the legislature is over, and we’re going to cut off the local government’s revenue too. I wonder how that’s going to work out.

As I’ve mentioned before, the real problem is that Florida has one of the most regressive and grossly unjust tax arrangements in the U.S. It was already bad when Jeb came into office, and it only got worse… and somehow he was wildly popular for this.

From the Jan. 12, 2003 St. Pete Times:

The poorest fifth of Florida’s working families now pay 14.4 percent of their income in state and local taxes, more than five times the rate at which the wealthiest pay. You’d have to go to Washington, at the farthest corner of the continental 48, to find a state that taxes more unfairly. The wealthiest Floridians – the 1 percent earning $289,000 or more – pay a scant 2.7 percent. Only five other states, all of them small, tax their wealthiest people any less.

Here’s what I suspect really happened. Jeb and the boys cut taxes on “wealth,” and passed certain costs on to local governments, who were able to pay for them with increases in property values (property taxes being the main source of revenue for local governments in Florida). Now the masses are waking up to the fact that they’re paying a lot MORE in taxes than they used to, and they’re blaming their local governments for wasting money. Meanwhile, all the folks that shifted those state expenditures (paid for by taxes on corporations and wealth) to local governments (paid for with property taxes, which more people have to pay) have all conveniently been term-limited out of office… and aren’t around to be held accountable. It’s a good thing we’ve got our county commissioners handy to kick around.

Oh I so love Florida politics.

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