Florida is thinking about raising the sales tax

The Florida legislature is thinking about eliminating the real estate tax on a persons primary residence and increasing the state sales tax from six per cent to eight and one half per cent.

This is the letter that I sent to the Orlando Sentinel in regards to the matter.



We purchased a home in Lake County in 2000. Our neighbors closed on the house next door with 90 days of our purchase. We paid about 26% more than they did. Our Ad Valorem taxes are now two and one half times higher than theirs. The reason is that we live down here for only three months of the year. The Homestead credit on the taxation is a good idea, but not treating all of the property equally in valuation is just plain wrong. We use only a proportionate amount of the services based upon the time we are here we do not have students in school, yet we pay two and half times the tax. The non-Ad Valorem taxes are the same yet we do not use the garbage as much or would use the fire and rescue as much.

One of the rallying cries of the Revolutionary War was taxation without representation and this is a prime example of that. Have all of the business and non residents pay the taxes and we will not have to pay as much. There is no free lunch and now they want to throw in free lodging with the free lunch, I hope not. Do you not think that we worked just as hard for our money as the people that live here? If you do not think so, tell us and we will all sell our homes down here and the real estate market will really crash. Better yet, maybe my cousin with six kids still wants the place, that should add to the school burden, welfare and all of the other associated costs.

This is the reason that I do not feel that replacing a unfair real estate tax with one that is more unfair, the sales tax paid mostly by the people that can afford it the least is proper.


David X. XXXX
2251 XXXX XXXXXXXXXX XXX
XXXXXXXX, FL XXXXX
XXX-XXX-XXXX


Has the whole country gone daffy, do they just all want to tax and spend without regards to common sense?

Maybe they should impose a State tax instead? Don't worry, the State of Florida is going to get money out of you one way or another.

REDDOGTWO said:

Has the whole country gone daffy, do they just all want to tax and spend without regards to common sense?

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Yes. This should be obvious to you by now.

Reddog,

Wisconsin does that to us too. We have a cabin in Wisconsin and we are hit terrible on our cabin property. The real estate tax on that small property is more than most houses in our local city. We even have had to join an organization called "Out of State Land Owners" to help combat the higher taxes. We have no city water, no city sewer, no plowed roads and the list goes on but yet we are hit ten fold of the people that live there.


murph

thcri said:

"Out of Stale Land Owners"

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Do fresh land owners get a better rate?!

DaveNay said:

Do fresh land owners get a better rate?!

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there I fixed it for you

thcri said:

We even have had to join an organization called "Out of State Land Owners" to help combat the higher taxes.

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"Out of State land" would be land ANYWHERE on earth outside of the boundaries of Wisconsin, correct? Seems to me if you bought property in Wisconsin you would be an IN-STATE land owner.

Gatorboy said:

"Out of State land" would be land ANYWHERE on earth outside of the boundaries of Wisconsin, correct? Seems to me if you bought property in Wisconsin you would be an IN-STATE land owner.

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No it means people that are from out of state that own land in Wisconsin.

Several years ago, Florida residents passed a referendum tro amend the state constitution regarding property taxes. Called Save Our Homes, the legislation that resulted capped residents' property taxes at a maximum 3% increase per year, while non-residents, business real estate owners and vacant land owners were not capped.

As long as one remains in one's house and does no remodeling, the taxes are artificially kept at a low rate. If one buys a different house or remodels their present house, the tax assessment jumps to what the current rate would be if there was no cap.

This has resulted in situations like RedDogTwo's, where non-resident owners face tax increases far above those faced by homesteaded residents (homestead is a concept in which the first $25K of property valuation is waived for owners in residence at the beginning of the year).

RedDogTwo immediately blamed the "tax and spend" governments. Well, he's right -- government collects taxes and spends money. That is the function of a government. If you want police, fire, public works, parks and recereation, and other municipal services, they are not free. If governments did not tax and spend, there would be preceisely zero services.

However, what I think he's actually trying to say is that governments spend too much money, and make it up by raising taxes. While this may be true, it's not the real reason why his taxes are going up much faster than his neighbor. The simple fact is that government services do cost money, and in many cases, those costs are rising. Fuel costs for public service vehicles, for example, have gone up much faster than the 3% cap can cover, and this is far from the only case.

If governments are faced with increasing costs and revenue from residents capped at a 3% increase, they have to get the money from somewhere, or cut back on services. It's really easy to say that they are wasting money, but an analysis of almost any municipal budget will show that there are few services that can be cut without making life in the community more miserable.

It isn't just "taxation without representation"; the taxes on my vacant property in Okeechobee are going up at the same rate as non-residents' property. When I build my new house and swtich my homestead to it, my taxes will start out at a much higher rate than someone who has property of identical value if they have lived in it for a while. When I sell my existing house, it will be reassessed without the cap and the new owner will pay much higher taxes than I do.

The results are that no one can afford to sell and move. Seniors who want to downsize are hit especially hard -- the taxes on their current large family home are almost certainly much lower than the taxes on a far smaller reitrement home. If they sell and move, they will be faced with far higher taxes just at the time they are beginning to live on a fixed income. It's often much cheaper to stay in the big house with higher utility and maintenance expenses.

This law is a prime example of the rule if Unintended Consequences. It is hurting the entire economy of Florida, because housing sales are slowing down due in part to higher taxes after a sale. In the past, younger families often moved up into larger homes that were vacated by the seniors who downsize; that is coming to a grinding halt.

This Save Our Homes legislation is turning out to be the worst thing that ever happened to Florida. It's important to understand that it was passed as a result of the actions and votes of a geedy, selfish, conservative group of voters who cared more for their short-term tax savings than they did for the well-being of the state.

Now, facing complaints about the results, they are proposing even more idiotic legislation that proposes to cut property taxes even further for residents. Then, they propose to put an initiative on the ballot for voters to approve increasing the sales tax by 2.5% in order to make up the difference in the property taxes.

I'll be honest. If this happens, I will be one of the primary benficiaries, because we will have a fairly sizeable investment in the land and house, and our property taxes will be reduced to almost nothing. But, I am a morally responsible citizen who is willing to pay my fair share, and not put it on the backs of renters, non-residents like RedDogTwo, businesses and vacant land owners. The only thing I can think of that would be worse than the current Save Our Homes law is the new proposal. Again, I feel compelled to point out that this lunacy is proposed by the Republican majority in our state legislature. all in the name of tax cuts.

Folks, someone has to pay the legitimate bills for the services we all demand.

There is little concern that Florida will enact a state income tax. It's prohibited in our constitution, and it's hard to imagine the typical voter actually voting for an amendment to increase their taxes...

"Well, he's right -- government collects taxes and spends money. That is the function of a government."

NO. That is not THE function of a government. While it may be a necessary part of a government, it is not the primary funtion of a gevernment.

Wannafish said:

"Well, he's right -- government collects taxes and spends money. That is the function of a government."

NO. That is not THE function of a government. While it may be a necessary part of a government, it is not the primary funtion of a gevernment.

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I don't think there is one person here that will complain about the spending on services. I don't mind paying what it takes to have the services. Its the fricken red tape and waste that goes along with it. Municipal level not being able to squeeze more money out, bull shit. Get rid of the unions. Our municipality has to have union police, union fire departments, and union service stations to work on the cars and trucks. Survey says, the city could save over 25% by dropping the unions. You see that is waste to me. Every time I turn around you read in the paper about kick backs to our elected officials all over the country and that is on the local level also. Most departments have budgets and the keep increasing them budgets otherwise the next year they don't get the funds. Even if it means waste the departments will spend it to make sure they get it next year.

And as usual OkeeDon has to point fingers at the republican party again. Little does he know that the people of florida elected them republicans. Maybe because they were sick and tired of tax and spend democrats. Again I don't mind paying for what it takes, it's the bullshit that goes on behind the scenes that I don't like paying for and I don't care if it is republican or democrat waste I don't feel I should have to pay for it.


murph

Wannafish said:

"Well, he's right -- government collects taxes and spends money. That is the function of a government."

NO. That is not THE function of a government. While it may be a necessary part of a government, it is not the primary funtion of a gevernment.

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Then, what is the primary function of government? Remember, while I didn't feel the need to spell it out because I think most everyone is smart enough to understand it, the subject of this thread is state and local government, not federal.

Also, remember that no matter what you consider to be the primary fucntion of government, it cannot accomplish it unless it collects revenue and spends money. The primary source of revenue is taxes. Because nothing else can be accomplished without spending money, that becomes the overriding function.

I can't think of anything that can be accomplished by government without spending money. Can you?

thcri said:

I don't think there is one person here that will complain about the spending on services. I don't mind paying what it takes to have the services. Its the fricken red tape and waste that goes along with it. Municipal level not being able to squeeze more money out, bull shit. Get rid of the unions. Our municipality has to have union police, union fire departments, and union service stations to work on the cars and trucks. Survey says, the city could save over 25% by dropping the unions. You see that is waste to me. Every time I turn around you read in the paper about kick backs to our elected officials all over the country and that is on the local level also. Most departments have budgets and the keep increasing them budgets otherwise the next year they don't get the funds. Even if it means waste the departments will spend it to make sure they get it next year.

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In my earlier post, I specifically said, "It's really easy to say that they are wasting money, but an analysis of almost any municipal budget will show that there are few services that can be cut without making life in the community more miserable." Unions in police and fire departments are a fact of life. I would be very surprised if there were any professional departments in the nation that are union-free, unless they consist of Good Ol' bubba and his brother-in-law, and I wouldn't want them fighting my fire. There are still many areas which have volunteer fire departments, but even those usually have a professional EMS and the paramedics are usually union.

Our city hired a third party firm to handle all vehicle maintenance, turned over all the city facilities to them, and saved money. Yours can do the same, if the voters want it.

As for budget increases, I suppose there are some departments that waste their money to be sure to get it again next year. The same thing is true in most corporations. It is, however, not a major factor in budgetary increases, and even if it could be fully eliminated, it would not save the kind of money you think it would. Real cost increases are much more dominant.

thcri said:

And as usual OkeeDon has to point fingers at the republican party again. Little does he know that the people of florida elected them republicans. Maybe because they were sick and tired of tax and spend democrats.

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"Little does he know..."? C'mon, murph. Offer the people something for nothing, and they would vote for Genghis Khan. People depend on leaders to do their thinking for them, and when that thinking is faulty, people stick up for their vote in order to avoid looking ridiculous. That's the case with most GOP supporters, right now -- if they admit the GOP has screwed up royally, they make themselves look bad.

As far as pointing fingers, if this bothers you then there might be some guilt. The Republicans have been in charge of the legislature for more years than I can remember, and in charge of the administration for the past 8 years. They are the source of all the tax problems in the state. We had surpluses uinder the Democratic leadership. The Republicans couldn't stand having a surplus; they had to give it back. They liked the sound of that, so they kept cutting taxes. They cut taxes until they screwed it up, leading to the property tax problems we have now. Even today, most of the GOP are paying more in property taxes than in sales taxes, and they know the poor folks spend proportionately more of their income on sales taxes, so they're once again proposing to cut their own taxes and raise the sales taxes.

If someone doesn't point the finger at the problem, it won't get solved.

"Also, remember that no matter what you consider to be the primary fucntion of government, it cannot accomplish it unless it collects revenue and spends money."

That is like saying because I have to shit to continue living that my "primary function" in life is to shit. Sorry - we will have to disagree on this one.

OkeeDon said:

If someone doesn't point the finger at the problem, it won't get solved.

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Too many finger pointers Don. Why don't you stop pointing fingers and start looking at solutions. Look beyond the problem.


murph

Wannafish said:

"Also, remember that no matter what you consider to be the primary fucntion of government, it cannot accomplish it unless it collects revenue and spends money."

That is like saying because I have to shit to continue living that my "primary function" in life is to shit. Sorry - we will have to disagree on this one.

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That's a great analogy! I wish I had thought of it. What would you say is the primary function in life that takes precedence over eating, sleeping, shitting and pissing? Is there anything you can do without performing those necessary and vital functions?

thcri said:

Too many finger pointers Don. Why don't you stop pointing fingers and start looking at solutions. Look beyond the problem.

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The most effective thing I can do as a single individual is to educate others about the problem. Once enough people see the light, we can collectively work on a solution. As long as too many people fail to see beyond their own comfort, there is little I can do except prod them.

OkeeDon said:

The most effective thing I can do as a single individual is to educate others about the problem. Once enough people see the light, we can collectively work on a solution. As long as too many people fail to see beyond their own comfort, there is little I can do except prod them.

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Don,

Until we as people elect officials that truly have our interest in mind nothing is going to change. The day that officials are elected on their own merits and not on who has the most campaign funds nothing is going to change.

Hillary and Obama are up there not because of the money they have in their pocket but because of the money donated to their campaign. If they had to spend their own money it would be a different situation. Now I am only picking on Hillary and Obama because that is all that is in the news right now. The Republicans whoever is running is in the same situation. They are there because of the money donated to them.

As long as unions and big business is sending people to be elected we will never have a politician that will be for the people.

Sorry that I am so sour on this but I think deep down you feel the same way.


murph

thcri said:

...Sorry that I am so sour on this but I think deep down you feel the same way.

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About the financing? Yeah, you're probably right. But, I don't let myself get as bitter. Since I know the financing will affect all the candidates the same, I can ignore that factor and go on to what might be positive. What is that old Serenity Prayer --

"[FONT=Georgia, Times New Roman, Times, serif]God grant me the serenity
to accept the things I cannot change;
courage to change the things I can;
and wisdom to know the difference."[/FONT]

OkeeDon said:

"[FONT=Georgia, Times New Roman, Times, serif]God grant me the serenity
to accept the things I cannot change;
courage to change the things I can;
and wisdom to know the difference."[/FONT]

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Don, why would you quote that when it was just a few days ago you said all Christians had their head in the gutter??

States have to get their monies whereever the getting is good. A state like FL. which has tons of tourist traffic, wants to take advantage of the tourists. Will the tourists go somewhere else if FL enacts this new legislation. I doubt it. So FL State can save the residents money by taking advantage of the tourists & non residents. They are one of the handful of states that can probably get by with this because they have a unique location and offer things not available in close by neighboring states. So, when the non residents complain do you really think the residents in FL are concerned? I seriously doubt it.

Doc said:

So, when the non residents complain do you really think the residents in FL are concerned? I seriously doubt it.

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Exactly, they figure if you can afford a vacation home then you can afford to pay higher taxes. If you don't like it sell it to someone with more $ than sense!

OkeeDon said:

That's a great analogy! I wish I had thought of it. What would you say is the primary function in life that takes precedence over eating, sleeping, shitting and pissing? Is there anything you can do without performing those necessary and vital functions?

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Absolutely - I can die!

thcri said:

Don, why would you quote that when it was just a few days ago you said all Christians had their head in the gutter??

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How many times do I have to tell you guys not to put words in my mouth. Show me the quote where I said anyone had their head in the gutter for any reason.

The prayer has validity whether or not one is a Christian.

There is nothing in the prayer to indicate that it is Christian or otherwise.

I accept good guidance in my life no matter where it comes from.

You're not going to irritate me no matter how much of a jerk you try to be.

Wannafish said:

Absolutely - I can die!

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Now, that was funny! Thanks for the chuckle.

Doc said:

States have to get their monies whereever the getting is good. A state like FL. which has tons of tourist traffic, wants to take advantage of the tourists. Will the tourists go somewhere else if FL enacts this new legislation. I doubt it. So FL State can save the residents money by taking advantage of the tourists & non residents. They are one of the handful of states that can probably get by with this because they have a unique location and offer things not available in close by neighboring states. So, when the non residents complain do you really think the residents in FL are concerned? I seriously doubt it.

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That's a really good question. Most likely, the tourists won't stop coming because of a rise in the sales tax, because individually, they're here for such a short time that it doesn't make a severe impact in their budget and besides, they're on vacation, so they expect to pay more.

But, will it be enough to offset the spending changes among residents? Here's what's wrong with increases in a sales tax (this also applies to a national sales tax instead of income tax, which has been proposed).

The poor cannot change their spending habits -- they don't have any discretionary income, and must spend every dime to survive. However, if the tax is increased, their spending must decline by the same amount, because they have no additional income to pay the extra tax -- it has to come out of their purchases. So, no matter how small, the first result of the sales tax increase is reduced spending by those without discretionary income.

The definition of discretionary income is that one can choose whether to spend it or not. One of the ways that wealthy people get more wealthy is by watching their spending. If the tax is raised, most of those people who have a discretionary income will simply choose the buy less. There will always be a few with enough money to simply not care, but most fiscally responsible people will have a limit on what they are willing to spend. Since most people hate to pay taxes, it's a really easy choice to lower one's tax dollars by slightly modifying one's buying habits. Thus, the second result of a sales tax increase is likely to be reduced spending by those ranked "comfortable" and above.

People who live near the state's border with Georgia or Alabama will shift their buying to those states. When I lived in northern Massachusetts, I did most of my shopping in Nashua, NH because they have no sales tax. I especially made the trip when I purchased big ticket items. Further, people all over the state will have more incentive to make purchases on line. Currently, rates for shipping are roughly equivalent to rates for sales tax, and there is no incentive to buy equally priced items on line. However, if the cost of sales tax goes higher than the cost of freight, many people will change their buying habits. Thus, the third result of an increase in the sales tax is likely to be a shift in buying habits to reduce the impact of the tax.

These and similar considerations will most likely combine to actually reduce the revenue from an increased sales tax. Years ago, I lived in Pennsylvania, which at the time, only sold liquor through State Stores (I don't know how they do it, today). The legislators viewed the State Stores as cash cows and, whenever they needed a little more income, raised the taxes on liquor, figuring that consumption would never drop. Well, there came a time when they went too far -- they raised the price so high, people started buying less -- and revenues actually went down.

Those are some of the unintended consequences of a law like this. We can't call them unforeseen consequences, because I just forsaw them.

OkeeDon said:

How many times do I have to tell you guys not to put words in my mouth. Show me the quote where I said anyone had their head in the gutter for any reason.

The prayer has validity whether or not one is a Christian.

There is nothing in the prayer to indicate that it is Christian or otherwise.

I accept good guidance in my life no matter where it comes from.

You're not going to irritate me no matter how much of a jerk you try to be.

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If your not a christian why would you pray to God??? Of what value is it. Remember you don't think there is anyone or being at the other end of the prayer. And yes your back to calling people names.

OkeeDon said:

If religious conservatives got their minds out of the gutter, the world would be better off, and there would probably be fewer Ted Haggards.

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Here is your quote about religious people and their minds in the gutter.

Poopy!

thcri said:

And yes your back to calling people names.

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Well, it's hard to debate with someone that denies reality and implants their own. I’m sure he appreciates you looking that up but it MAY be hard for him to show it.

OkeeDon said:

Most likely, the tourists won't stop coming because of a rise in the sales tax, because individually, they're here for such a short time that it doesn't make a severe impact in their budget and besides, they're on vacation, so they expect to pay more.

The poor cannot change their spending habits -- they don't have any discretionary income, and must spend every dime to survive. However, if the tax is increased, their spending must decline by the same amount, because they have no additional income to pay the extra tax -- it has to come out of their purchases. So, no matter how small, the first result of the sales tax increase is reduced spending by those without discretionary income.

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I would agree, Don, that most vacationers are expecting to pay and that's part of why I agree that an increase in the sales tax would actually be a benefit to the state provided it included relief from the exorbitant property taxes and the flawed system currently in place. Those on fixed incomes would have additional funds as a result. I don't believe that the sales tax increase would have a dramatic effect on the buying habits of the general population because it is usage based. Staples would continue to be treated the same. You don't pay tax on unprepared foods. Most people on fixed incomes are struggling just to buy the basics.

Insurance relief is another area that needs to be addresed. Monies aquired from the sales tax increase can help to fund the pool which most of us who own property there have to participate in because there is no other option.

Lower property taxes FOR EVERYONE means business owners that serve the tourists don't have to jack up the price which makes it so more people can come to visit and spend thier money to help maintain thier favorite vacation spot.

OkeeDon said:

People who live near the state's border with Georgia or Alabama will shift their buying to those states. When I lived in northern Massachusetts, I did most of my shopping in Nashua, NH because they have no sales tax. I especially made the trip when I purchased big ticket items. Further, people all over the state will have more incentive to make purchases on line. Currently, rates for shipping are roughly equivalent to rates for sales tax, and there is no incentive to buy equally priced items on line. However, if the cost of sales tax goes higher than the cost of freight, many people will change their buying habits. Thus, the third result of an increase in the sales tax is likely to be a shift in buying habits to reduce the impact of the tax.

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People already do that. Gas is cheaper as are many other things. I even drove from Tampa to Macon and purchased a trailer because the same one was almost $700 cheaper in Ga. than Fla. and that's after paying the state sales tax you get dinged with when you register it.

The people truly affected are those who purchase the big ticket/ luxury items and thus pay significantly more tax because of the type of item it is. It behaves much like a usage tax.

The other part of the problem there and everywhere is that there are a limited number of politicians who are truly there doing the right thing. The influences are tremendous. First you have your local/primary consticuency (sp) whom you have to do things for. Regardless of whether what they want is right for the whole. Then of course there are special interests and then, there is the long term political career to think about, can't screw up my chances of being around awhile.

Needless to say there are many many more things that we could discuss here that are related to the thread topic....but with time being what it is I'll have to finish by saying that IMHO...If we the people truly wanted to make a difference we would not be having this discussion.

"The object is not to see through one another, but to see one another through."

We leave for ND next week and no word on what the legislators are going to do with the taxation issue as of yet. To make things even more interesting the state of ND is also talking some reform up there, ten per cent off for home owners and five per cent off for commercial and farm property. This would only apply to residents and be good for two years.

The only thing that I can figure out is that if the FL law changes, we will become residents down here and spend less time up north.