It’s always nice to see that I’m not nuts or alone in some of my ideas. Via ConnecticutBlog I encountered this report at The Day on a tax reform idea that sounds suspiciously similar to something I’ve suggested before.
Quoting The Day:
The proposal, announced Wednesday by Sen. David Cappiello of Danbury, the highest-ranking Republican on the Appropriations Committee, would allow cities and towns to implement new local taxes of their own design — on income, product sales, hotel rentals or other sources — in exchange for repealing their local property taxes.[...]
“We would like to look at phasing out and ultimately eliminating the property tax as a form of local revenue, but then open up the ability for municipalities to raise other forms of revenue in its place,” he said. “What I don’t want to do is allow them to have a property tax and then pile on other forms of taxes, because then we’re just looking at a money grab, and I don’t want to go down that road.”
I’m not so sure that I’d go down the road of repealing the property tax, but I do think the notion of limiting the projected revenue change from a change in tax schemes to a certain amount…say, inflation plus three points, to pull a number out of thin air…would be wise.
Also, as presented in The Day article, I think the proposal would open the door to towns trying to impose income or sales taxes in manners inconsistent with what’s done at the state level. I have no problem with towns seeking income or sales taxes, but they ought to be in the form of “piggyback” taxes — following the exact same rules as the state taxes, but just being an add-on rate or a multiplier.
On the property tax side, granting towns the ability to have different tax rates on motor vehicles versus residential property versus commercial property; or making it legal for towns to implement tax change ceilings to mute the impact of revaluation shock would also be welcome measures.
If that bill makes it to the public hearing stage, I might just have to go and put my two cents on the record.