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Dreaming Of Tax Equality

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The Tampa Tribune

Published: December 9, 2007

If next-door neighbors compare property-tax bills in almost any part of town, one in every three of them is likely to be furious about the inequities. The other two might sympathize.

But silently the winners congratulate themselves on buying before the run-up in values. Out of view of their less-fortunate neighbor, they exchange high-fives and resolve to defend a tax system that makes someone else buy them government services.

We Florida residents don't seem to care how much our neighbors pay as long as most of us get to pay less than a fair share.

Florida lawmakers, keen readers of the public mood, are pandering to our selfishness by proposing even more tax breaks for property owners already enjoying big tax favors.

They know better than to offer us fairness. But if they did, what might it look like? Here are two possibilities.

Within the present system, give every homeowner a fair tax exemption. For example, here in Hillsborough County, the average amount taken off the tax rolls by the Save Our Homes cap on values is about $77,000 per home. That works about to about 34 percent of the total value of all county homesteads, according to calculations by the office of Property Appraiser Rob Turner.

One way to be fair, short of wiping out all exemptions, would be to give everyone a tax exemption of at least 32 percent. The amount would change year to year. This year, for a $200,000 house, the tax savings would be about $1,300 to $1,400. The new owner of a $300,000 house would save around $2,000. To make up the lost revenues, tax rates would have to be raised a little. That's the price of fairness.

Another approach is to radically change the whole system. A reader from Boca Raton sent us this creative idea, which he shared with the Taxation and Budget Reform Commission. Barney Danzansky, a real estate agent and a Florida resident since 1968, suggests taxing buildings based on their square footage, at different rates for residential and commercial.

The Legislature would set the rates each year and would have a 1,500-square-foot exemption for homes. Large office buildings might have a higher rate. The revenue from taxes on buildings could be used for schools.

There would be a second property tax, based on the value of the land, as calculated by the county tax appraiser. Tax rates for land would be set by local taxing authorities, as they are now. The revenue from land taxes would support local government.

A fair taxing system may be impossible, but it's worth dreaming about. When everyone is required to make a fair contribution to local government, everyone will have an incentive to participate. And that would give us better governments.

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