Happy New Year -- it’s property tax time again
Each year at this time, we sit back and savor the Christmas presents we received from our loved ones, contemplate our New Year's resolutions and try to suppress our anxiety about how much the city will raise our property tax this year, lower assessments not withstanding.
Especially this time of year, how could they be so insensitive to think that the assessed value of my house indicates how much tax I can afford to pay? My neighbor makes twice as much money as I do but pays the same property tax. Even he is concerned because his tax more than doubled from 2003 to 2007. I pity the seniors on fixed incomes who have the same income they had in 2003 but now pay twice the tax, even with exemptions. What will four more years of this bring for their 2011 happy new year?
On Oahu we have started to see the most serious unintended consequences of the property tax that have already affected so many on the mainland. Never mind foreclosures because of variable interest rates. On the mainland, people have had to walk away from their family homes because of property taxes. Some have moved to places with lower taxes. A recent letter to the editor highlighted that this is beginning to happen on Oahu.
But to where can we move? Away from our family and friends? Away from the beaches that we love? Away from the seat of our culture? No! Something else has to be done.
I wonder if anyone in our government cares about the property tax problems that we face. I wonder if they realize that we can repeal this most regressive tax, and give every home and apartment a tax cut as well. I hope they care, because it can be done and it's easy.
The residential and apartment property tax can be replaced with a simple change in the general excise tax from 4.5 percent to about 5.5 percent on Oahu. This would give the city the same revenue it will collect this year, but we would no longer have to pay the $3,000 or $4,000 or $5,000 or more that we now pay. Instead, a typical middle-income family would pay about $400 more GET, with no property tax. If you spend $40,000 a year on GET items, you will pay $400 more GET but no property tax. If you now pay $3,000 property tax, that's a tax cut of $2,600!
This is not a joke. State Department of Taxation data confirms it. What makes a big difference is that visitors pay GET but very little of our property tax. Many local federal government expenditures also are subject to GET, while they pay no property tax.
I call this a win, win, win. We get a major tax cut, we will have more to spend at local businesses and the city still gets its revenue. That's a real Happy New Year!
Chuck Prentiss is a retired former executive secretary of the Honolulu Planning Commission. He lives in Kailua.