Fred Thompson,Recently, two very able young legislators, Sen. Mark Hass and Rep. Tobias Read, authored a blueprint for state/local tax reform in Oregon. This is quite remarkable. Who can remember a major reform emanating from the sapless branch of our state government, not forced upon it by popular initiative?
So, how would I deal with the inequities of the property tax? Rather than exempting the first $50,000 of assessed value of property across the board, I’d address the fairness problem directly by linking the benefit to the personal income tax, which would make it a lot easier to calibrate its distributional properties to the precise ends sought. For example, the state could grant a tax credit equal to $750 (indexed for inflation) multiplied by their property tax assessment ratio (TAV/RMV) to homeowners who take the standard deduction on their personal income tax. Not only would this be targeted at the folks most unfairly treated by the property tax and have better distributional consequences than an across-the-board exemption, it would shift fiscal responsibility to the state where it belongs rather than further depriving local governments of resources.
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