Stop tinkering; time to examine whole system
The Minnesota Property Tax report analysis was recently released. The Dayton administration claims property taxes are going down, a net drop of $8 million in 2014. Republicans say property taxes are going up $125 million, and only new refunds and property tax credits of $133 million are bringing down the total.
This is an example of what is wrong with the state’s convoluted tax system. When one class of taxpayer complains about paying too much, legislators or the governor may try to lower their burden with credits or refunds. These credits and refunds, of course, come from some other tax. When the state cut Local Government Aid to prevent income tax increases, it caused property taxes in the affected cities and counties to rise. When the state tries to lower property taxes, it has to do it by raising LGA, or paying credits and refunds to property taxpayers. Those credits and refunds come from other tax sources.
The state’s tax system is like an old inner tube, with weak spots bulging out here and there. Try to squeeze one spot back down, and another pops out.
It is high time the state took a comprehensive look at tax reform. It needs a complete overhaul, not just another patch or two on the tire. The system needs to be streamlined, simplified and readjusted so that everyone is paying their fair share and no one gets special breaks.