The biggest Christmas present ever! It will make America great again! Business will grow! Jobs will increase! Wages will rise! All because of the greatest president ever!
Sorry, I couldn’t contain my sarcasm. Now, if you are expecting a column on the evils of giving to the rich and taking from the poor, you will be disappointed. While I do believe that much of what Congress passed in a hurry to give some sort of positive end to 2017 will have a negative effect on the nation, I am only going to talk about why it will not have a positive effect on the people of Idaho and local control of public programs and spending.
It has to do with the cap on property taxes, supposedly as a deterrent to “liberal” high property tax states. In fact, it will discourage all states and other local entities from raising more revenue through property taxes and severely limit local and state governments from spending for education and infrastructure. This may not seem to be a dreadful thing to many Idahoans, but I will attempt to make the case.
Property taxes are both useful and fair because they allow the entity benefiting from public spending to pay for those benefits. By this I mean a well-educated population creates more economic prosperity than a less educated one. Economic prosperity means that property holds its value or increases. Infrastructure that provides convenient transportation, utilities, zoning, and public safety increases the value of the property in real terms. I believe property tax to be one of the fairest on the group of people who acquire equity (ownership) in the economy.
I am aware that a portion of the Legislature agreed with then-governor now-senator Jim Risch when he called a special session of the Legislature and drastically decreased property taxes statewide. It was a cunning political maneuver. At the time, there was talk about keeping an expiring 1 cent tax and adding it to education funding. Risch kept that idea, but also passed the property tax decrease which made education funding so dependent on sales tax revenue that there was a significant loss when the economy went into recession and sales tax revenue tanked. It greatly benefited the man himself and others whose principle wealth is held in property rather than more volatile and risky equities. I disagree that this was a wise move.
Most people think of what is possible with income or profit after all taxes are paid. This bottom line is something all taxing entities must contend with. One per cent seems small until it is placed upon other percents. Then it can tip the scale of possibility in negative ways. By capping the federal tax deduction for local taxes, the federal government is severely affecting the way state, city, and county citizens manage local spending. Idaho may not need public subway systems, but the East Coast does. We need to maintain state and local roads so that our commerce can flourish. But both types of needs end up dancing for federal dollars that are granted at the whim of Congress and the influence of construction lobbies. You know where the big dollar projects are. Local taxing and spending puts tax dollars closer to the people who pay the tax. We may have done away with the practice of earmarking, but we have extended the value to a state of a member of Congress with the seniority to influence federal spending.
One way I have always thought of taxes is a way of pooling money to finance things necessary for the common welfare. It is only in a democracy that it takes a majority of citizens to agree to what that common welfare is. And it is only with robust local taxes and a decreasing federal tax burden that the majority can exercise its will effectively. Congressional tax conservatives really got it wrong this time.