Morton Marcus over at HPR has called those that are seeking the elimination of property taxes “wild ones.” While that statement was over the top, Marcus does have some interesting points about property tax reform. His column
here raises all sorts of questions about whether or not the proposed abolition of property taxes will work. For example, a major question that he raises is how the new tax revenues will be allocated to local bodies that had their money raised from the property tax. Libraries used to get “x%” of property tax revenues, under a sales tax, income tax, or income/sales tax solution, how will we know what libraries will get and who will make that decision?

I can’t help but respectfully think that Mr. Marcus is being overly pessimistic in his view of the abolition of property taxes. Yes, he raises some serious questions, but instead of devising answers to those questions within the framework of a new tax system, he advocates for the reform of the property tax system. The property tax system was designed years ago and is fit for a 19th century economy. Reforming that system would be like reforming a steam locomotive. We don’t need a reformed or rebuilt steam locomotive, we need a brand new diesel locomotive that is a lot more efficient and can pull a lot more freight with a lot less maintenance. Indiana needs a tax system fit for the 21st century.

While Mr. Marcus can get away with saying property tax abolition proponents are “wild ones”, I would caution any state official seeking reelection in 2008 not to use that phrase. The “wild ones” happen to be very keyed up right now about voting anyone who raised their property taxes out of office.