Momentum - Business to Business Online Magazine | Page 18

& Ta xe s Pa st (Texas) Future By: Cheryl E. Johnson, PCC Galveston Co. Tax Assessor Collector [email protected] The first tax known was assessed in 3000 BC by Egyptian Pharaohs and collected by scribes. Cooking oil, an item used by all, was taxed and audits performed to insure no cheating through reuse of a single drop. Fast forward 2,450 years to the Athenians, apparently a practical lot, who only imposed taxes in times of war and rescinded them when the war ended. (Can you imagine Congress being that wise?) Their tax was a bit politically incorrect as only foreigners - men and women without both an Athenian mother and father – were forced to pay a monthly poll tax of one drachma for men and one half a drachma for women. Since that time, all sorts of things have been taxed and thus tax revolts. The first known revolt occurred in 60 AD and was led by the Queen of East Anglia, Boadicea, who was opposed to corrupt British tax collectors. Sadly, Nero crushed her army. Next, Lady Godiva, who agreed to ride naked through the streets of Coventry if her husband would reduce taxes on the citizens. When a man named Tom gazed upon Godiva’s charms, the term “Peeping Tom” was born. Saxon kings imposed the first property tax on land and property in 476 AD after taking Rome and, sadly, those taxes continue today in one form or another, everywhere in America except Alaska where only 25 of its 163 cities assess a property tax and there is no state property or income tax (amazing the effect of a rich oil supply). As you know, the Lt. Governor and my friend Dan Patrick, formed the Senate Select Committee on Property Tax Reform. I was honored to present invited testimony at its May 10th hearing at the University of Houston (summarized herein). As the ‘fly in the ointment’ not parroting the Texas Municipal League and Texas Association of Counties mantra, my message was – stop – don’t slow the bleeding that is the current tax scheme. The current system responds to our efforts to improve our communities because, as values rise, we are left holding a higher tax bill (demand drives a market based system). Telling local officials to lower the rate is not going to help the families in the neighborhoods where values unilaterally increased at incredible rates. Can our cities and school boards cut the rate to match our individual increases (or even the 10% taxable limit of the current appraisal cap)? Of course not! The ONLY way to protect the individual property owner is appraisal caps (limiting the annual tax increase) or a move to a price paid system whereby the purchaser has full knowledge at purchase what the tax obligation will be. That is what a progressive tax is – the ‘taxed’ in control. I am not certain we will ever move to a sales tax solution to replace property taxes and I will never support an income tax. (Tax me on my decision on which property to buy - not on my sweat!) We cannot insure life, liberty and the pursuit of happiness of Texans if we continue to embrace the regressive system in place today whereby we are taxed based on the actions of others in our neighborhood of comparables. The Texas Homestead Law was adopted to protect the family homestead from seizure by creditors and favorable tax treatment to the owner. It is time for legislators to stand behind that and deliver a tax system for Texans that will give us protection and tax certainty and our local governments a stable revenue source. Follow the Committee at www.senate.state.tx.us/75r/senate/commit/c632/c632.htm. See my suggestions in the nifty little box! 18 MOMENTUM / Summer 2016 PROPOSED KEY REFORMS Property Owner Protection/Assistance • Reduce homestead appraisal cap to 3% OR reduce to 5% and extend to all real property OR limit increases to every other year • Increase margin of error of Property Value Study to 10-20% (removes pressure on values) • Move to price paid as basis of taxation (eliminating need for CADs) • Elect CAD board of directors (county commissioner precints + county TAC) • Allow clerical error to refund taxes paid if actual sale price is less than CAD market value for up to three years Government Efficiency • Five percent (5%) revenue cap for all governments with automatic rollback provisions • Cost Effectiveness in tax assessment and collection for school districts - require centralized collections unless they can perform function for less; reduce State funding if refuse Public Policy Reform • Allow optional education certification for county tax assessors and their employees • Require Comptroller review