To Achieve Meaningful Property Tax Relief, Right Size Government: Jonathan Williams in The Center Square
Policymakers have a golden opportunity to continue to build on Iowa’s historic tax reform.
Jonathan Williams, ALEC Executive Vice President of Policy and Chief Economist, co-authored a guest column in The Center Square, Iowa with John Hendrickson of Iowans for Tax Relief Foundation.
After implementing historic income tax reform, Iowa legislators will be turning their focus on property tax reform. Iowans across the political divide are rightly demanding property tax relief. Nevertheless, property tax reform will not be easy. Property taxes are local taxes and at the heart of high property taxes is local government spending. Solving Iowa’s property tax problem for the long-term will require a commitment to responsible spending limits.
Perhaps the most significant component of the Truth in Taxation property tax system is that it focuses on revenue. In other words, it contains a mechanism that ensures if assessments rise, then rates fall. It prevents local governments from taking advantage of assessment windfalls, because local governments receive the same amount of revenue as the previous year unless they inform voters and then vote to increase taxes in a transparent manner. This solves the “honesty gap” problem and local governments can no longer tell property taxpayers that they are “lowering rates,” while the taxpayer is left wondering why their bill is higher than it was the year before.