PRESIDENT'S MESSAGE

The Tax Foundation has recently published an article titled “There's No Good Way to Pay for Property Tax Repeal” which is another contribution to the current debate in the USA over whether property taxes can be abolished. Written by Jared Walczak, Vice President of State Projects, the key findings are stated by the author to be:

• Property taxes currently generate 70 percent of all local tax revenue, some or all of which would have to be replaced with other taxes under property tax repeal.
• Replacing the property tax with newly granted local taxing authority is exceedingly difficult, because local sales and income tax bases vary widely across jurisdictions; there may, for instance, be no feasible sales tax rate by which an agricultural county or bedroom community could replace its property tax revenue.
• Backfilling forgone local property tax revenue through new state taxes is difficult because it dramatically shifts overall tax burdens, undermines local accountability, and cannot easily adjust for changing population mixes.
• All revenue alternatives are less conducive to economic growth than the existing property tax regime, but some transfer regimes are sharply degrowth.

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