Every year every person, or company, will pay their annual property taxes to the Government (local, city, county, state, Crown, Territory or whomever).
The amount that is to be sent in to support services the government provides is based on the value of the property - as determined by, usually, the government itself. In the United States this is loosely based on the appraised value of the property (house, business, land or combination).
When someone else thinks your property is worth more today than it was yesterday due to any number of reasons then the state/County/City now thinks you can therefore afford to pay more taxes to them NOW.
Now, the appraised value is based on the perceived value of the property as determined by others. How much you pay is totally based on what the house is worth as determined by others using their past experience (gut insight really), what other people were willing to pay for a similar house (property); both methods which are totally outside your control.When all else fails they use statistics and guess what your property is worth. The value has no relation to reality of how much you earn, how much services you use, or anything else.
Now as inflation occurs, which has since the invention of money, the amount that is needed to purchase anything goes up. Naturally the property values go up. Why? People selling property ask for more money than what they paid so as to ensure they make up for both inflation and to get a profit from the property. Why can they get more? Because someone, somewhere, desires it for any number of reasons and therefore is willing to pay more of their money in order to have it.
Governments like this method since inflation means they always get more money (on average) every year in income than the year before. Thus, they keep the same buying power as before since any inflation increase is built into the assessed values of properties which go up every year.
If property values fall for any reason then governments panic since they will get less money in a few years - then they raise the rate they assay property to make up the loss.
This method, as mentioned, is not based on what people earn or need. It also means that extra income that is gathered is rarely held accountable to the people as values go up.
I think that a better method to pay into government to support services is to use square footage.
When any building is built it is recorded into the records the amount of space that it covers.
Now, if a 100 year old house that covers 700 square feet is sitting at a location that SOMEONE ELSE thinks is worth $1,000,000 since they can build a skyscraper on it and make, $50,000,000 the government now taxes the owner on the potential $1,000,000!
This is a popular story that all politicians bring up all the time about high taxes to retired people living in houses assessed more than what they earn in a year.
What these politicians say should be done to solve this problem tax problem for low income people is to put into law methods to forgive or grant money to people so they can afford to keep their house.
A better method is to use the square footage of property. Add up ALL the square footage of houses (apartments too since people are living in there) in the STATE/COUNTY/CITY and divide that total square footage into how much they need. This gives a tax rate per square foot that citizens will be charged. Each person then takes the square footage of their house (and apartment dwellers) and multiple that times the rate per square foot and that is your taxes.
If government needs $100 million to provide services for a year, and there is 300,000,000 square footage of living area in their span of control, then divide into the amount needed by the total square footage and bill owners their square footage of living area.
Now that 700 square foot house, that someone else thinks is worth a million dollars, will pay: 700 * 30 cents/square foot or $210.00 in yearly taxes.
This same method can be used to govern office space, manufacturing space and so on.
Also this way apt dwellers can get SOME property tax benefits deductions and have a stake in the community which they do not have right now.
This idea eliminates people appealing assessed values when it comes to taxes (but NOT when they want to sell) since it is pure math — and it can be easily validated as to what the square footage is. This ELIMINATES 98% of all tax appeals since this is PURE MATH and not is not subjective. There will always be someone challenging the square footage but that is EASILY determined. It also eliminates the fluctuating tax base year to year.
Using this method people are now paying based on known physical values. It also bears a relation as to what services their house uses (fire, road maintenance, sewer, any other broad services) or could use. A person living in a 3,000 square foot house actually uses more services overall than one in a small house. If the fire department came it would require more effort and equipment to fight a fire in a 3000 square foot multi-story house than a 700 square foot house.
It could also be easily applied to undeveloped land since it too is a known size.
One reason you have not seen this implemented — though it should — is that the business's and governments' argument of "growth is good " would fall flat and be exposed as false. As more houses are being built it should lower your rate — more square footage is being added — and so your taxes should go down. But, which has been proven over and over again, growth causes more money to be spent than what is taken in on property taxes on these new buildings. Thus rates go up.
The more house and square footage that is built in an area the lower everyone else tax bill should become. This system allows the taxpayer to easily see that if it the rate per square foot goes UP that means more SERVICES (or inflation) are being demanded against the KNOWN tax base. It also will EASILY point out that there is a point when GROWTH in a community costs MORE than the tax base that the growth is supposed to generate. So your tax rate to support this new growth will HAVE to go up.
The Government would also have to tell the people that they need more money every year since growth has NOT made up for inflation and growth has also cost more money than they thought it would.
This is not all the doom that they think it is. People, when seeing data in pure math basis, can and have raised their taxes to keep pace with inflation. Everyone can instantly see that everyone else is ALSO sharing the same burden of increase and no one is being given a special tax break.
Plus, they could also put into the rate an annual increase equal to official inflation factor. If 1.5 percent then THEIR costs should go up 1.5 percent and also peoples' rate should go up 1.5% and it should all be mathematically correct. If their rate went up 3% over the prior year then that is seen and can be held accountable or must justify why the rate should go up and what caused it. This creates more accountability and more sharing of what goes on in the government to the people which is always appreciated by people.
Remember: Business get the biggest tax breaks and write-offs due to the way our tax laws are written so they can write off their expenses that than private citizens cannot. Business also demand more services of Fire, Police and roads to get people to their business. The rates charged to them would be different because of this. A rate for industrial, rate for office space, rate for food crops, no rate for land not lived on or used for any purpose (in effect park like lands) etc. Likely a dozen logical categories.
The idea described above can, and should, be applied directly to vehicle taxes.
Trucks, cars, RVs, etc. can all be counted. The state knows how much money is needed. Use math to come up with a fair way to charge all based on what they drive.
Same basic theory here as Property Taxes: Amount of money needed divided by number of cars registered * weight per vehicle = tax per vehicle. Just because you bought a new car does NOT mean you should and CAN pay a higher rate. A car 50 years old uses the same road and requires the same level of road service as a brand new car!
The weight of each type of vehicle registered is known. Take the weight of each type of vehicle, multiple it by the number of vehicles of that type. Do this for each type of vehicle registered. Total all the weights then divide that total into the amount of money that is needed by the State.
Now each persons' car is now weight factored into the amount of money that they should pay to support roads. A 3,000 lb car is going to cause less damage, and require less engineering needs to build roads and bridges than a 108,000 lb tractor trailer. Each vehicle now is going to pay taxes based on their weight balanced out over the whole vehicle population.
Out of state vehicles coming through the state could then just pay based on their GVW. But that would not be totally unfair since they are not using the roads the full year. I would just give them, like a transit ticket, a rate payable one 1 week at a time. Thus they would pay the current weight rate for that year divided by 52. It would be good for 1 week of travel in the state.
Example: Truckers coming from California through Oregon to Washington could make it to Seattle, drop off, pick up a new load, and pass back through on the same week long transit pass. Smaller states could just do it on a day by day basis.
This would evenly pass the cost of road creation, and maintenance (which is where more money is spent than in building brand new roads) to all in a state.
Vehicle weight idea above is independent of taxes paid to a state when fuel is purchased. Right now people who use more fuel pay more in taxes. It is already usage based.
People do have a choice of what kind of vehicle they want to purchase. Thus, people driving a Hummer will be paying more in taxes than those buying a MINI Cooper.
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