John McCarron’s smug essay “In praise of property taxes” (Commentary, Oct. 25) is riddled with common myths and errors. He avers that, due to their federal income tax deductibility, property taxes are the ideal vehicle for expanded local government spending and, therefore, should be raised for all manner of local government goodies.
The first myth is that the federal government is somehow paying for a large portion of these local activities, since property taxes are deductible. Does any thinking person really believe that the federal government reduces its spending by the $17 billion that McCarron says is “returned” via property tax deductibility? Or is it more likely that the federal government just replaces this tax money by raising taxes elsewhere, most likely the personal income tax?
If property tax deductibility were eliminated, and federal spending kept constant (tee-hee), then federal taxes could be lowered, revealing the myth of the “free lunch” of property taxes.
Additionally McCarron snidely bemoans the fact that taxpayers in Kenilworth and Barrington can disproportionately take advantage of this freebie since they are in higher tax brackets. This is absurd for two reasons. First, it ignores the fact that taxpayers in these tax brackets pay more in federal taxes on both an absolute basis and on a percentage basis. Go to a flat tax and eliminate the tax deductibility of local property taxes and these folks will be elated.
Second, McCarron ignores the fact that since these high-income taxpayers pay most of the federal income tax collected, they also pay most of the marginally higher federal taxes raised to replace the “lost” income due to the deductibility of local property taxes. It’s just a big shell game.
McCarron is just helping to perpetuate a massive fraud on American taxpayers. It is better to enhance transparency and truth in taxes by eliminating such scams as deductibility. A carnival barker wouldn’t try to pull off the same fraud that our politicians and their shills, such as McCarron, seem to get away with.
