Sunday, October 14, 2007

Franklin: Candidates Split on Tax Rate

Michael Morton continues his election preparations with a summary of the Town Council candidates and their views on the discussion of a split tax rate in this article in Sunday's Milford Daily News.

Let's see. The revenue pot remains the same under a split rate. It does not increase taxes. Can't. There are only two ways to do that, pass an override or increase the tax base.

Businesses would pay a different rate than regular tax payers.

Oh businesses like the ones that employee folks who might work in Franklin.

If they have to pay higher taxes, they would take their business elsewhere.

Hmm, where would that leave the Franklin resident taxes? Faced with additional increases sounds like to me.

Split tax rates are not a solution to our problem.

I think our problem is how do we increase revenue in an equitable manner. We are all in this together.

Or do you think our problem would be solved with split tax rates?

I'd like to hear your rationale.

1 comment:

  1. Split Rate? When we read that business pays a "different rate" it hides the truth a bit. Business pays a HIGHER Rate.

    In an age when people and capital are very mobile, it is an easy choice to move from one town where the tax on my business is high, to one where the tax is lower.

    Have you ever heard about a snake eating it's own tail? It might
    sustain the snake for a bit, but eventually it consumes itself.
    That's what's happens in cities in New York State that use this idea (Binghamton, Niagara Falls, Buffalo,Rochester, Poughkeepsie etc.). The higher tax on business chases a smaller and smaller tax base. That's just not sustainable. Business has just as much as right to as anyone else.
    So, why do towns tax business at a higher rate? Why, to "help" homeowners, of course!
    How effective has this help been?

    Well Binghamton went from a population of 53,000 in 1990 to a Census estimate of
    46,000 today, I'd say that it hasn't helped too many homeowners.
    Let's be clear: a high tax on business drives out business. That
    leaves the residential properties with more of the burden, holding the

    I've got a better split rate.

    I'd suggest splitting the property in adifferent way than at present. Instead of different rates on
    homeowners and business, split the tax between land values and building values, and reduce or eventually eliminate the tax burden on buildings.

    Why would a town do that? By reducing or eliminating the tax on
    buildings, there is a greater incentive to build, to build with higher quality materials, to maintain, to avoid blight, and to redevelop economically depressed areas.

    In the cities that use it, the vast majority of homeowners get tax
    reductions. Productive businesses do too. The city gets the same
    revenue, just from a different source: land value. A tax on land has been shown to result in better land use and more in-fill development.
    This has the benefit of reducing sprawl, while putting pressure on
    absentee owners who cause vacant lots and cruddy rental properties.
    Doing nothing accomplishes nothing. Tinkering a little around the
    edges accomplishes little. A systemic rethink of how and what we taxcan achieve much more. Thanks for listening.