Monday, November 26, 2007

Hoosiers Favor Sales Tax Increase To Reduce Property Tax

An Indianapolis Star/WTHR poll says more than 60% of the respondents support an increase in the state sales tax as a means of reducing Indiana's property tax burden. "The poll of 600 Indiana adults found 62 percent are willing to pay more in sales taxes, while 27 percent oppose a higher sales tax and 11 percent are undecided," the Star reports. The biggest beef opponents have against a sales tax increase from 6% to 7% is that it will make Indiana's sales tax among the highest in the nation. There's only one problem with that claim. It's not true.

I've seen this claim repeated in the Star and other media since this discussion began. The problem is that the comparisons are only being made to the state sales tax rate and ignore the existence of additional local sales taxes in other states. Let's look next door in Illinois as an example. Although the standard, statewide rate is 6.25%, local taxes push the rate much higher. In Chicago, the tax rate is 9%. Suburban Bolingbrook's population has skyrocketed with a tax rate of 8%. Even downstate cities have relatively high rates. Champaign has a 7.75% rate, Springfield comes in at 7.75% and Peoria has an 8% rate. In other states, such as Tennessee, after adding in the local rate, the sales tax is over 9%. If the media is going to bring up this claim, it ought to at least check out the facts.


Anonymous said...

The Selzer firm did the mayoral poll, and did this one, too.

Altho their mayoral numbers ended up close, their methodology was extremely suspect.

I don't trust this poll.

Sales taxes are viewed as more fair by most. I don't get it, but I'm in the minority, I know. The trouble withi it is: I am not that old, and i can remember 2% sales tax. I don't see substantially better government services than I did back then.

Government needs to go on a diet. Now. Doubt me?

Walk into the State Office Building complex anytime this week. Observe the work ethic displayed at far too many offices.

I rest my case.

Anonymous said...

Facts, what facts? Government needs to go on a diet, I agree, but sales tax increase of a measly penny to reduce property taxes to one percent of assessed value is acceptable. Even more acceptable is elimination of the property tax on residences.

Anonymous said...

A sales tax increase should ONLY be used in conjuction with permanent abolishment.

As long as property tax exists, politicians will continue to raise it.

We have to set up PERMANENT measures so that property tax is eliminated and permanent spending caps/rules are put into place or we will end up in a worse situation than we are in now down the road.

SPENDING has got to be addressed! An increase in sales tax without property tax elimination gives them more money to spend.

Anonymous said...

Damn I agree withi Melyssa. Hell must be freezing over.

Anonymous said...

Sales tax disporpotionately hurts the poor and working poor.

With the gap widening between rich and poor and the disappearance of the middle class, we should all be concerned about how we can close the gap. Not widen it.

Buzzcut said...

There are PLENTY of places in Illinois that only have the 6.25% sales tax. I lived in a town that was about 20 miles west of Chicago, and our sales tax was only 6.25%.

We would be very foolish to swap property taxes for a higher sales tax. We live in the age of You pay NO SALES TAX on Amazon. And you get free shipping and a great price, usually.

Raising the sales tax will push more and more sales over the internet.

Gary R. Welsh said...

buzzcut, the vast majority of people in Illinois live in a jurisdiction with a sales tax well over 7%. It is primarily smaller towns and rural communities which have only the 6.25% rate.

Anonymous said...

Sales tax disporpotionately hurts the poor and working poor.

I agree. They will now have to pay $10 more for their $1,000 HDTV.

Buzzcut said...

Advance, that may be so, but it doesn't change the fact that all those people in Chicago and elsewhere could take a drive down the Elgin-Ohare expressway and shop in my town, Bartlett, and not pay that sales tax.

Also, you know that I live in Lake County. The only thing we seem to have going for us is location relative to Chicago. We attract people from Illinois who want to get things they can't get in Illinois: casinos, cheap gas, cheap cigarettes, fireworks.

That 6% sales tax is one of the only things we have going for us! If I had my druthers, I wish the legislature were contemplating lowering it back to 5% rather than raising it to 6%.

They just opened a huge Cabela's at exit 3 on 80/94. The sales tax differential is one thing that will drive sales at that store. People will go to the Indiana Cabela's rather than the one in Illinois if the sales tax differential is enough.

Buzzcut said...

You know what's nice about the property tax:

1) you know exactly how much you pay.

2) you know exactly how much you pay to whom. It's itemized on the bill.

3) it is a local tax. Your money stays in your community and can't be siphoned off to other parts of the state.

4) It is capped at 2% of your home's assessed value. There is an upper bound to what you pay.

The income and sales taxes do none of these things. They are VERY dangerous taxes as a result.

Anonymous said...

I never agreed to co-sign, on a loan (Property tax secured bonds) that THEY (The State) took out, against MY (That which I have purchased & paid for) property.

They need to cut programmes, and earmark those monies to repay those bonds! AND, NEVER COMMIT CREDIT FRAUD AGAINST ANY OF US, EVER AGAIN!