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Wednesday, August 15, 2007

Tax Hocus Pocus

The flyer below came from Rep. Jeremy Kalin (DFL-17B) in a recent Chisago County Press. Click on it to enlarge.

Rep. Kalin wrote:

Fighting for Property Tax Relief

"Rep. Kalin voted at least 6 times for significant property tax relief for Chisago County. Unfortunately, the Governor vetoed these bills, meaning property tax hikes will continue another year. The most aggressive property tax reform measures would have provided $543 million in tax cuts for property tax payers statewide. Jeremy is already at work looking at other solutions that will deliver real property tax help for our area."

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The knight-in-shining-armor wants you to believe the state will provide property tax relief for you. Apparently this Dem wants you to believe the state magically has money to contribute towards your tax bill so you won’t need to carry the whole load.

Where would the state get the $543 million so that it could reduce your taxes? Duh! The state gets it from you! The state collects taxes from you and then gives it to your city, township, county and school district to pay part of your local taxes. Of course you pay all of it.

Pull your 2007 real estate tax bill out of your file. Look at lines 3, 4, 5 and 6.

  • Line 3 is your property tax.
  • Line 4 is the "Aid paid by the State of Minnesota to reduce your property tax."
  • Line 5 is "Homestead and agricultural credits paid by the State of Minnesota to reduce your property tax."
  • Line 6 is your property tax after credits.
  • Line 6 is about half of what line 3 is.

If you pay $3,000 of tax, for example, on your home property, the state pays about $3,000 to your local governments as well. In the end, you would be paying about $6,000 to fund local government. Half is paid directly out of your right pocket to the county which disperses it to the other jurisdictions. The other half is paid by you out of your left pocket through sales tax and income tax to the state, which gives it to local government. In the end, you paid all $6,000.

Consequently, for Kalin to be so magnanimous to vote for $543 million of tax relief for you and others, he had to raise tax revenue from you and others to pay for it. Is this tax relief? No it is additional state taxation that is used to supplement local taxation. A tax revenue increase is called tax relief. Kalin and the Dems must think we are dumb.

If residential taxpayers would have to pay for the whole tax bill (for example, $6,000) directly to local government, rather than $3,000 directly and $3,000 indirectly, we would see much more accountability in local government.

If Kalin were honest, he would have stated, "I voted to raise $543 million in taxes from you to give it back to you." Aren’t politicians good to us?!

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