As individual counties finish the “trending” process and tax bills are mailed out, taxpayers across the state are vocally reacting to the experience of property tax sticker shock.

The immediate concern of these taxpayers is, of course, the amount of their tax bills. The fact that property taxes do not reflect the taxpayer’s ability to pay has become dramatically clear as individual taxpayers across the state have opened their bills.
But as they examine the property tax system closer, these taxpayers have come to understand the other concerns that Farm Bureau has been voicing for years.

They understand that property taxes bear no relationship at all to the benefits provided by government to the property itself.

They understand that property taxes often tax debt rather than wealth. This is especially true in the case of homeowners with large mortgages.

They understand that property taxes are unpredictable and that quick fixes for political purposes do nothing to address the underlying inequities inherent in the property tax system.

They understand that property taxes penalize citizens who own their own homes and take pride in the maintenance and upkeep of their property.

They understand that the taxes on similar parcels of property vary widely across the state because no matter what the basis of assessment is, the rules will always require a high degree of subjective interpretation by the assessors themselves.

They understand that senior citizens on fixed incomes cannot annually see their property taxes increase.

They understand that wealth that is invested in intangibles such as stocks, bonds and other securities is completely sheltered from property taxes. The state’s message to its financially successful citizens is: Reinvest in Indiana property and you’ll be taxed; send your money to Wall Street and we’ll give you a pass on property taxes.

They understand that we have devised a property tax system that is so difficult to understand that not only are taxpayers confused by it, but the public officials charged with its administration are also.

They understand that property taxes are expensive to collect and that the assessment process consumes much of the revenue that property taxes generate.

They understand that if it’s necessary to grant a property tax abatement to entice a business into our state, there’s something fundamentally wrong with the tax itself.

Finally, they now understand what Farm Bureau has been saying for years. It is time for Indiana to get rid of property taxes.

What should replace property taxes? A tax that is based on economic activity, such as an income tax or a sales tax, would, by its very nature, reflect the taxpayer’s ability to pay.  Such a tax would be understandable; it would be significantly less expensive to administer and collect; it not would require the objective application of difficult standards by 1,100 different elected assessors; and it would help encourage investment and economic growth throughout the state.

What should we avoid? Another quick fix that quiets those taxpayers who complain the loudest or represent the most votes but leaves the state’s antiquated property tax system intact. Short-term solutions such as the elimination of the inventory tax simply redirect the burden of property taxes for political purposes. They exacerbate rather than address the larger problems that are inherent in our property tax system.

The solution is obvious: Call your elected officials and tell them: It is time for Indiana to get rid of property taxes. For General Assembly members in the House, call 1-800-382-9842. For members in the Senate, call 1-800-382-9467.

Don Villwock
Indiana Farm Bureau president