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Michael Miller

Viewpoint

By Michael Miller
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Imperative To Act On Taxes

U.S. Rep. Colfax saw the problems

in our tax system 150 years ago

The first English to plant themselves on Western Long Island brought property taxes with them. The Dutch didn’t leave us much in the way of culture or government, except for some words (cookie!). Medieval English tax systems, they stuck. A little later in the 17th century, colonial New York’s earliest property tax assessment laws actually borrowed language from England’s “Saladin Tythe” of 1188, used to pay for one of the crusades. Some of these concepts survive intact in our property tax system to this day.

Yes, the land taxes that we pay to fund our schools and local governments are pretty much the same taxes that so annoyed Robin Hood and his gang.

The advantage of taxing land was that it was right there where everyone could see it, it couldn’t be carried away, and it was a stable, dependable and roughly accurate measure of wealth. Then the Industrial Revolution messed it all up.

“I cannot go home and tell my constituents that I voted for a bill that would allow a man, a millionaire, who has put his entire property into stocks, to be exempt from taxation, while a farmer who lives by his side must pay a tax.” These are the words of Rep. Schuyler Colfax who appears in that Lincoln movie as Speaker of the House and was later Vice President.

The meaning and measure of wealth have always been moving targets. For most of the time that there’s been a New York, up to 1933, New Yorkers were assessed on both “real property” (land and buildings) and tangible “personal property.” At various times, personal property included cattle, horses, corporate stocks, slaves and furniture. One property tax was geared toward farmers and the other toward merchants and businessmen. Today, New York is one of seven states that does not directly tax some form of personal property, such as automobiles.    

During the last Depression, in the 1930s, New York state taxes were restructured to recognize conditions on the ground. State real and personal property taxes were out, gasoline taxes were in, income taxes were up, and more. We’ve never fixed the problems with local land taxes, though a few governors came close. The current growing crisis is the first time that debate over the nature of property taxation has been virtually shut down and taken off the table. A few bills that would start to shift our revenue stream toward taxes based more on the ability to pay languish without attention in the state legislature.

Consider this actual situation. House A has an official market value of $788,600 and $13,702 is assessed in total property taxes. On the other side of the same block, House B is valued at $784,600, almost exactly the same. Same original housing development. Same paint job even. Same unincorporated neighborhood, but not the same school district. House B owes $18,515. House A is in a very high property wealth district. House A’s district will slowly pull away from House B’s district.

Red flags are cropping up. For thousands of Long Island households, 401(k)s are a catastrophe. The Dow is at a record high, national household income is at a decade low. Other flags: We need fiscal emergency preparedness, but instead politicians do dances.

At a certain income point significantly above the county median, some people do pretty well in the current system.

From March 2008 through March 2013, candidates for Nassau County Executive received $1.53 million just from individuals writing checks for $10,000 or more. Could you take a five-figure check from someone and then tell them we need tax reform that might mean they pay a little more? Could you?

Michael Miller is a freelance writer, designer and strategic consultant who has worked in state and local government. Email: millercolumn@optimum.net