The Homestead Trojan Horse

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.

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4 Responses to The Homestead Trojan Horse

  1. FRANTZ says:

    AND YET ANOTHER REASON FOR THE FAIR TAX. IF THE STATE SETS THE EXAMPLE AND GETS RID OF THEIR PORTION OF THE INCOME TAX, AND JUST INCREASES THE SALES TAX 2 OR 3 PERCENT, THEY WILL HAVE ENOUGH MONEY TO FUND THIS STUFF.

  2. James says:

    They wouldnt need 2-3 perscent. They would need about 1.5% at most. Remember when they increased sales tax by .5% and increased revanew some extorted amount. They could move us up to a 7% sales tax eliminate income tax and pay for most normal operations of expanding/servicing raod ways etc. But the problem is they will LIE to us and tell us one thing and do another. Other problem I see is they dont want to live within there means. spend it so stupidly on wasteful projects etc. They need to be more prudent with OUR money.

  3. Reid Greenmun says:

    I support the Homestead Act. While it really does NOTHING – it possibly could lead to some modest tax relief for a select number of overtaxed home owners.

  4. Do you own your property or don’t you? If you have to pay rent every year in the form of these exorbitant property taxes, then in effect, you do not own that property. Sales taxes would more than cover the cost of government serving it’s proper, limited role.

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