OPINION
By Juris Curiskis
Senor Federation member

We desperately need relief from politicians whose thinking is in reverse gear and blinded by the inertia of status quo. Not only is their thinking backwards, it is also morally wrong. Does anyone but politicians and the very rich think that it is all right for the poor to subsidize the rich? Of course not! But unfortunately that has been going on for a while and politicians are perpetuating that immoral and anti-social concept by refusing to reform the Minnesota property tax system.

This last legislative session was no exception. The proposal for property tax relief failed in the legislature because it needed funds to mitigate the outrageous burden for the average and the poor homeowners. I am glad that the governor vetoed that bill because it did not propose a true reform. And, if it had passed, we could have another health maintenance fee on bratwurst because it is so unhealthy to eat all that fat.

As you can see, both Democrat and the Republican legislators have the inertia of status quo when it comes to local government tax revenues. We all know that our houses do not pay the local government taxes. We, the people in the houses, pay from whatever financial resources are at our disposal. So, why are legislators persisting to measure our capacity to pay local taxes on the houses we live in? Aren't you glad that we don’t have to put up with such nonsense for our state and federal taxes.

Minnesota property tax concept as it is now. Let me demonstrate how it works with the home value as the basis for local government taxation and its financial burden on the household.

Head of household “A” is retired and has a total household income of $10,000. He purchased the house 40 years ago for $21,000. But now the assessor has it valued at $300,000.

Head of household “B” is a 30-year-old stockbroker that just got transferred to the same city as “A.” His income of $100,000 qualified him for a $300,000 house which he bought.

Head of household “C” is a CEO with a $1,000,000 average annual income. He has a house in Minnesota, Switzerland, Florida, California and in Brazil. The house in Minnesota is a very modest house for his standards and is valued by the assessor at $300,000.

Each of the households (A, B and C) pay an identical local tax because it is based on the assessor’s valuation of the houses. In this case, it is rounded to $4,000 each, or $12,000 total for the three that the local government gets.

What kind of a burden is the local tax on each household’s income under the present system?

The burden of household “A” is $4,000 of $10,000 or 40 percent. The burden of household “B” is $4,000 of $100,000 or 4 percent. The burden of household “C” is $4,000 of $1,000,000 or  0.4 percent.

It is very disturbing that our legislators are resisting to correct this desperately needed reform in our present property tax system that is inflicting financial abuse to the majority of Minnesota households. It clearly shows that the poor and middle class are subsidizing the rich. It is very disturbing that legislators can’t see or understand how simple it would be to reform the local tax based on household income rather than on a house that an assessor determines its taxable value.

What will a reformed property tax system do for us? In the above example, the total tax revenue the local government receives is $12,000 on a total household income of $1,110,000 or 1.08 percent of the combined incomes.

If one applies the 1.08 percent to each of the households incomes, the $4,000 liability for each household would change as follows: the burden of household “A” is 1.08 percent of $10,000 or $108. The burden of household “B” is 1.08 percent of $100,000 or        $1,080. The burden of household “C” is 1.08 percent of $1,000,000 or $10,0800.

This is meaningful property tax relief that can be realized if the property tax is reformed based on ability to pay. The only one that would not get relief is the super rich household. But does it need relief to begin with when it was paying only 0.4 percent while the poor household was paying 40 percent?

Point these things out to your legislators and reiterate that this is possible without any state government aid to assure the local government revenue stream as before.

Also point out that there would be a tremendous benefit to all if we don’t have to deal with the assessor. It would eliminate the need for property tax appeals boards.

The Minnesota Department of Revenue has all the information on the total property tax that is paid by all Minnesota households and what their total household income is. Based on that information, legislators can determine what the actual percentage of household income should be for local government taxes to maintain the same revenue stream without a state subsidy.

A property tax reform based on ability to pay would benefit the vast majority of Minnesota households. Only a small minority would be slightly inconvenienced. Since the legislators are resisting a property tax reform, the only conclusion one can draw is that the legislators themselves are in the small minority or they have been bought by the small minority. It also means that legislators are not representing the majority of Minnesota households.

Legislators have not been performing to bring about a desperately needed property tax reform based on ability to pay. It is time to get some legislators that will represent the majority of Minnesota households. The rich may try to buy legislators, but we can override that with our vast majority voting power.

We need to tell legislators that their legislative culture of subsidizing the rich must stop. Refusing to pass reformed property tax legislation is evidence that the culture of subsidizing the rich is being perpetuated and reinforced at the same time by handing out subsidies to billionaires for the stadium and the megamall.