Klarinet Archive - Posting 000343.txt from 2004/05
From: "Kevin Fay" <kevinfay@-----.com>
Subj: RE: [kl] Re: re: no one left behind
Date: Mon, 17 May 2004 00:17:07 -0400
At 11:51 AM 5/16/2004 -0400, Karl Krelove wrote re education:
<<<I doubt if anyone really disagrees with you in a general way. But it's
the expense that sends most people into their respective camps. This can't
be done on the income from local property taxes (the predominant way of
funding public education in the U.S.), which sets up a competitive situation
that shouldn't exist between parents and advocates of "normal" kids and
those of "special needs" kids, whatever the needs may be.>>>
. . and Bill Hausmann replied,
<<<Believe me, the combination of gambling revenues and sales taxes (as in
Michigan) doesn't work, either! The one advantage property tax has is that
the tax base is relatively stable. When the economy turns downward, the
sales tax revenue drops right away, and causes havoc in the school funding
system.>>>
Wow - tax policy. I've spent a fair bit of time discussing this stuff, but
never expected to find a deep discussion of it here.
Both death and taxes are inevitable. People have a better understanding of
death than taxes, however. Most everything folks believe about taxes -
especially those folks who happen to be politicians - is wrong, though,
leading to some rather interesting effects.
For those desiring to put their toes into the wonkish swimming pool, I'd
suggest reading "Local Tax Policy: A Federalist Perspective" by David
Brunori, available in paperback from the Urban Institute Press (6" x 9", 162
pages, ISBN 0-87766-717-9, $26.50). A summary is available at
http://www.urban.org/pubs/localtax/. For the equivalent intricacies in
Federal taxation, see "Contemporary U.S. Tax Policy" by C. Eugene Steuerle,
now available from the Urban Institute Press (paper, 6" x 9", 332 pages,
ISBN 0-87766-720-9, $24.00). Mr. Steuerle is a tax wonk of high order, and
knows his stuff. You can see a quick summary at
http://www.urban.org/pubs/CTP/.
As to the question on the table, Bill happens to be correct - property taxes
as a whole are more "stable" than sales or income taxes, the receipts of
which fluctuate more with the business cycle. This doesn't make them
"better" however, because of the variations between property tax rates
between "rich" and "poor" school districts. Not surprisingly, property tax
receipts in affluent suburbs far surpass those is inner cities, exacerbating
the inequality of funding between them, even if the tax rates are a "flat"
percentage of assessed value.
The real problem with education (and other) funding in the U.S. is that
Americans (or more properly United Statesians) are fundamentally undertaxed.
As a percentage of GDP per capita - or even receipts per capita - US federal
and local tax revenues together are dwarfed by what our Earthmates most
anywhere else in the industrialized world pay.
This is a direct result of the efficiency of American democracy - our
politicians are not unresponsive, but all too responsive to the desires of
the American electorate. Folks here just *love* getting government
benefits, but are loath to pay for them.
Quick example - in the 1980's, the GOP attempted to gut the US government by
cutting tax rates (and therefore receipts) under the theory that we couldn't
have Big Government if there wasn't any money to pay for it. Folks loved
the "Reagan tax cuts," but wouldn't countenance Newt Gingrich's cutting the
programs, leading to his quick political beheading.
The American tax system isn't broken, it just isn't working so well. With a
GDP like that of the US, there's plenty of money to pay for adequate
education for all. Good luck getting it though.
Sigh.
kjf
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