The Practicality of Eliminating Property Tax

Friends,

It is my belief that when someone makes a claim or presents a possible solution to a problem that person should be able to back it up with facts, examples and a practical way of getting it done.

As you already know, part of the Keep Idaho IDAHO Plan is the elimination of property tax. Because it is not a practice of mine to just talk out the side of my mouth, in this letter I will lay out why property tax should be eliminated and how it will be done once I am Governor. 

Elimination of property taxes affects every person in Idaho.

Since I announced my candidacy for Governor, I have said over and over that, “Property tax is the most immoral of all taxes because it is the State’s way of claiming that it owns everything. The State requiring you to pay an annual tax on your property or it is forcefully taken away from you makes you a renter forever, not an owner.“

During a 2018 Senate Debate, Representative Thomas Dayley, Co-Chair of the House Agricultural Affairs Committee, said, “If you look at history, I’ve heard it said that private property is the essential difference between socialism, communism, and any other totalitarianism, and that is the essence of what we are trying to talk about here in terms of private property. Few of the concepts in the history of the world have been more important than private property, that is what our country was founded on… private property.”'

I couldn't agree more with Representative Dayley. When the State can take your private property because you don’t pay them, it puts the property owners in a precarious situation that endangers their freedom. You either have private property or property tax—you can't have both!

Almost daily, right here in Idaho, elderly people on a fixed income and others can’t pay their property tax so their homes are taken by the State. In Idaho we must secure the right to truly own property (including our homes). We should not be required to pay someone else to keep our own property.

Now, by far the most concerning feedback I get from people across the State when elimination of property tax is mentioned is, “How is the government going to pay for things if it cannot collect property tax?” Well, the easy answer is, property tax will be replaced with a consumption tax. Consumption tax is the only moral way to tax people because it gives people the freedom to choose what they are taxed on and when. 

Let me explain as it applies to replacing property tax.  

Right now the average home cost in Idaho is $403,291 (by the way, home prices are up about 73% in Idaho over the past 5 years). So, let’s take a home that is valued at $400,000. The property tax on this home would be approximately $2000-$3000 each year. Over a 30 year period, assuming it does not go up, (which we know it will) it would total $60,000-$90,000 in taxes to the State. Although this certainly is a lot of money and in my opinion more than the State needs from an average household, the purpose of this letter is to show how a consumption tax, ensuring that the State can never take your home, will equally fund the State in replacement of property tax.   

Now let’s look at what I am proposing instead of property tax. Under my Keep Idaho IDAHO Plan, every time a piece of property is sold, a consumption tax would be paid to the State at the time of the sale. This tax could be paid as part of the mortgage, so the person purchasing the property would not have to pay it all at once if they financed the purchase. 

Let me give you an example.

Let’s take this same $400,000 home. Every time this home is purchased, a consumption tax would be paid to the State. If this tax was 5% then the consumption tax would be $20,000. Now you might be saying that’s a far cry from $60,000. However, you have to calculate how many times this home would be sold over a 30 year period. Statistically, the average family moves 3-5 times in a 30 year period. Using this as the marker this would mean that the same $400,000 home would bring revenue to the State in the amount of $60,000-$100,000. Now again, I think this amount is more than the State should have per household and we need to lower the State's impact on our income, but this shows that replacing property tax with a consumption tax will more than pay for the needs of the State and Counties.

Someone may say, “Why replace property tax with a consumption tax if the revenue to the State is the same or more?” Well, this reason is the entire point! With property tax, even when you pay off your home, you still have to pay an annual tax and if you cannot pay that tax the State WILL take your home. With a consumption tax, ONCE YOU PAY OFF YOUR HOME, NO ONE CAN TAKE IT FROM YOU.

Thank you,

Ammon Bundy 

VoteBundy.com 

Reference Links: 

https://www.wsj.com/articles/SB10001424052748703730104576260520534696138

https://tax.idaho.gov/i-1129.cfm

http://www.tax-rates.org/idaho/property-tax