Much as the citizens of Troy celebrated the apparent departure of the Greeks, my friends at the Chesapeake Citizens for Fair Real Estate Taxes, the Portsmouth Taxpayers Alliance, and the Virginia Beach Taxpayers Alliance, are partying over the advance of the Homestead Exemption Amendment, not recognizing it as the Trojan Horse it is. They should learn to beware of government bearing gifts.
And just as the citizens of Troy embraced the vehicle of their own destruction, my anti-tax friends are working hard at losing their war.
The Homestead exemption is not tax reduction, it is tax concealment. Property tax is a function of both assessment and rate. Every year, the rate is reset by the localities. If the assessment for homes is lowered by 20%, the localities will simply vote a higher rate than they otherwise would have. The net result is that the VISIBLE tax burden will be shifted toward business property. Even with the higher rates, on a 20% lower assessment, the tax bill we will pay through our mortgage will decline, so most people will perceive this as a tax cut.
But the taxes paid by local businesses will go up. No business has a money tree from which to pluck their tax dollars, every dime of that tax increase will fall on us in higher prices. It will be subtle, a penny or so on a can of peas, the next increase in the cable bill will come a few months sooner, services that were once included in a package will now be billed separately, but one way or another, the cost of living here will rise to cover those taxes. It has to, any tax applied to all businesses of a kind can only be resolved by an increase in price.
So, what happens when tax rate setting time comes around? The taxpayer groups will have no way to demonstrate these subtle price increases on their infamous charts and graphs. The majority of taxpayers will feel they have won the war and the warnings the taxpayer groups will issue of reckless spending will fall on deaf ears.
Then the hidden myrmidons of big government will emerge from the concealment of this ruse and claim their final victory.