Returning from out of town, I read with interest the discussions on Ventura's tax plan, list-member opinions on sales/income/property taxes, options on funding education, etc. A few comments: In general, I think our dependance on property taxes must be greatly reduced-- especially in urban areas like Minneapolis, where property values have been skyrocketing over the past decade, and local government has an ongoing affair with TIF projects. The property tax (esp.residential, but also comm/indust.) does not reflect the cost of public services received by the property owner. Residential property taxes do not consider the owners current income level, and can be extremely regressive in many cases. At least with comm/indust. property there is some income associated with use of the property-- BUT that income should be addressed by the income tax and should not be reflected in property taxes (likewise with residential). It (the property tax), represents a very arbitrary method of collecting funds to run various levels of government, school districts and ancillary gov't. services-- public costs are simply added, then allocated over various property classes/rate schedules and assessed to owners. It simply does not make sense! I think a near-full state-funding of K-12 public education, with maybe 10% allocated to the local level would reduce interdistrict taxing and funding discrepancies. Ventura's move is in the right direction. Sales taxes are regressive and at some level, serve to limit consumer spending. I don't think we want to necessarily limit consumer spending (as someone suggested), since spending is what keeps people working and our economy humming (even the gov't.). Income taxes are progressive, and at some level serve as a disincentive to one's seeking added taxable earnings-- again a result we should seek to avoid. In general, we should be taxing things that, as a society, we don't want to encourage-- high taxes/fees on things we strongly want to discourage (pollution), lower taxes/fees on more benign transactions. The tax system should promote or at least be consistent with socially desirable outcomes and this is not the current case. A carbon tax-- a tax on fossil-fuels, the tax amount based on the carbon-content of specific types of fuels, is a viable method to raise very large amounts of revenue. The dirtiest, most polluting fuels (i.e. coal and diesel) would be taxed most aggressively, while gasoline and natural gas (cleaner fuels) would be taxed at lesser rates (a tax policy that fosters improved public/environmental health). The tax revenues raised could then be used to offset varying amounts of current sales and income tax revenues, resulting in a revenue-neutral overall state tax collection. The higher resulting cost of energy would work its way through the economy in terms of products/services produced, but would likely be muted to some degree by competitive pressures within the marketplace (procucers not wanting to pass the cost along and retain a price advantage over competitors, etc.) Higher energy costs would encourage conservation and more-efficient technology options. Low-income residents could be eligible for a carbon-tax-rebate to account for its regressive nature. Energy-intensive industry might experience competitive disadvantage relative to producers in states without a carbon tax, but sales taxes/property taxes/wages, etc. currently vary by state/region anyway. Neighboring states would likely join in such a tax-shift movement, reducing inter-state discrepancies, while improving their public/environmental health situation. Today the state/national economy is good; this is the time to aggressively address property tax reform in Minnesota!! Also a good issue for the new/acting Mpls. Revenue Commissioner (or whatever the title is) and City Council members to mull. M. Hohmann 13th Ward
