A native-born Rhode Islander, educated in Providence Public Schools, went to college in North Carolina and a political junkie and pessimistic optimist.

13 responses to “Abolish the Property Tax”

  1. jgardner

    “While protected from property taxes, I’m pretty sure nonprofits are not shielded from income taxes”
    The people who work for non-profits pay income taxes, but the entity itself, so long as its income generating activities are in line with its stated purpose, is not subject to a tax on business income.

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  2. Samuel Bell

    Yes, a system of local income taxes to replace property taxes would undoubtedly be a good idea.  

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  3. jasonpbecker

    School boards in NY levy school property taxes. It’s separate from other property taxes, clear, entirely for schools and entirely controlled by the people in charge or running schools.

    The first step in RI should be to leave the bizarre model where we have a school committee beholden to a city council. People are willing to spend money on education and it’s the school board that’s responsible for meeting state mandates on programming and quality. Separating and protecting the schools from the broader ills of the city (and in some cases, vice versa) would provide better accountability and take the first steps toward getting these things under control.

    The biggest problem with collecting income tax where someone works is the huge number of people who work outside of RI and strong consolidation of work in just a few places which could cripple some cities and towns. 

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  4. Sully

    I wonder what the effect would be on some of the smaller towns with less of a business tax base? Providence, Warwick, Newport etc. would certainly help, but how would Burriville, Foster, etc make out. I don’t think it would help workers if they have to pay a huge income tax in rural towns because they do not have a big enough employee tax base to support its needs.

    Rather than shift from property taxes to local income taxes, I think a consitutional requirement that state to provide a certain amount of state aid to towns, based on a metric like population, would provided much need relief. This would allow cities and towns to benefit from much broader state-level tax base without having to actually impose a broader taxes on the local level. It would also prevent the State from balancing its budget deficits by cutting state aid (and shifting the burden to the cities and towns) then patting itself on the back for avoiding tax increases, much like it did in the past. If less services have to be paid for with property taxes, then the taxes do not have to be as high. It could be coupled witha stricter cap for those worried about local government spending.     

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    1. jgardner

      “I think a consitutional requirement that state to provide a certain amount of state aid to towns”
      Doesn’t that essentially equate to money laundering? Not in the illegal sense of course, but the State collects the money from the resident of the town, takes a cut off the top and delivers it back to the town where the resident lives. That seems like a terribly inefficient means of raising revenue.

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      1. Sully

        Less efficient than 39 separate cities and towns enacting and administering their own separate tax systems, when the state already has a system for collecting and administering state taxes?

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  5. Barry

    Its an idea worth considering, but some cautions: a property tax is at least a tax on wealth, and less easily evaded than income taxes which can miss the underground economy, under-reporting of certain incomes, plentiful loopholes including off-shoring….   Perhaps tax streams should have a component of a statewide preperty tax, after all, regionalization proponents sometimes say we are really just like a county.   And that would lessen the incentive for one town to raid businesses from another, and make bad land use decisions such as locating nuisances as town boundaries so 1/2 the burden is on another town.

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  6. Tom Sgouros

    Property taxes are easily audited and relatively inexpensive to administer.  In order to do away with them, you have to make the substitute as simple to collect for the towns doing the collecting.  Property taxes are also far more stable through a recession than either the income or sales taxes.

    Property taxes also have the benefit of forcing people who don’t actually reside here to share some of the costs of protecting/enhancing their property.  Narragansett has low property taxes because so much of the town is owned by people from Connecticut.  Same situation in Block Island and the rest of the coastline cities and towns.

    Property taxes here are far too high and unfairly administered, but they probably have a place in an ideal system, if only for these features.   

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  7. davidc

    In Maryland, where I paid taxes when I was quite young, the local income tax was at the county level, not town, and was applied as a ‘piggy back’ tax on top of the state tax.  Therefore the local govt didn’t have to process returns, etc.  It sounds more like a ‘contract’ between state and county govts to provide income taxes.  Yes, they also have property taxes in Maryland.

    As to the point earlier about small towns without strong tax bases, I think that also points you toward county level government, since all counties typically have a ‘seat of government’ with more commercial activity.

    The “opt between income and property tax” idea doesn’t work.  What if I work in a place which taxes income, but my town taxes property.  I’m taxed twice.

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