For Immediate Release Contact: Paul K. Ogden
March 23, 2009 (317) 531-6127 (cell)
(317) 631-0172 (work)
--Citizen Leaders Pay Call to Legislators; Demand Reforms--
Indianapolis – Attorney Paul K. Ogden, 47, today announced finalized plans regarding the taxpayer rally dubbed the “Revolt at the Statehouse” to be held on Wednesday, March 25, 2009, from 11:30 a.m. to 1 p.m. in the North Atrium.
The focus of the “Revolt” is the anger the average citizen has with government at all levels which has been captured by big money interests and does not listen to ordinary citizens.
Ogden cited the populist uprising in the country, which is noted on the cover of Newsweek that hits the newsstands today, as one of the reasons for the rally. “You are seeing a populist rage sweeping the country like you have not seen in decades. People are angry as they see their hard-earned money being taken to give out to failing companies, like AIG and others. In Indianapolis , leadership of both the Republican and Democratic Parties is deeply involved in a corporate welfare culture that silences even the most well-meaning party members who dare speak out for the interests of the taxpayers.”
Gary Welsh, author of the blog “Advance Indiana,” has tirelessly reported about the proposed Pacer bailout, the overly generous Colts-Lucas Oil Stadium deal as well as other issues related to the Capital Improvement Board and other local issues. Welsh notes, “The CIB is filled with members who have serious conflicts of interest, not the least of which is the President of the Board, who represents the Simons who own the Pacers. The individuals on the CIB clearly do not have the best interests of the people of Indianapolis in mind when they decide they need to give another $15 million of our tax money to billionaire sports owners.”
Melyssa Donaghy who runs the blog Hoosiers for Fair Taxation noted that people are fed up with the back door deals and lack of transparency in how government operates. “The Revolt will include a call for ethics reform, including more transparency. People need to know what is going on in their government,” Donaghy said. “The conflicts of interest many of these politicians have need to be exposed and ended. We should not have our elected officials using their positions to make themselves and their friends richer at the expense of taxpayers.”
The speakers will include Republicans, Democrats and Libertarians. Titles of some of the speeches include: “Increasing Debt: Mortgaging Our Children’s Future,” “The Colts, Pacers and the Capital Improvement Board,” “Run over by the Speedway Redevelopment Commission,” “Lobbying and Ethics Reform,” “Transparency and Accountability in Government,” “Pay to Play Politics, Indiana Style,” and “Fun and Games in Evansville .” A speaker list is included below.
REVOLT AT THE STATEHOUSE SPEAKERS
(Wednesday, March 25, 2009; 11:30 to 1 p.m.)
"Increasing Debt: Mortgaging our Children’s Future"
– Lisa Kelly, former Libertarian Candidate for Lt. Governor
"The Colts, Pacers and the Capital Improvement Board"
– Gary Welsh, Attorney at Law and Publisher of Advance Indiana blog
“Government Grants & Public Corruption”
– Rev. Solomon, Author and Community Activist
"Run Over By the Speedway Redevelopment Commission"
- JoEllen Dotlich, SPEED
"Pay to Play Politics, Indiana Style"
– Mark Small, Attorney at Law and Author
"Transparency and Accountability in Government"
– Diana Vice, Lafayette-area Housewife and political activist; Publisher of Welcome to My Tea Party blog
"Lobbying and Ethics Reform"
– Julia Vaughn, Policy Director of Common Cause/Indiana
"Overreaching Arm of State Government"
--Jim Premeske, Team Hammond Taxpayers' Group
"Fun and Games in Evansville "
– Frankie Neidhammer, President Vanderburgh County Taxpayers Association
"How to Get Involved & Make a Difference"
– Melyssa Donaghy, political activist and publisher of Hoosiers for Fair Taxation blog
"A Call to Action"
– Paul Ogden , Attorney at Law, and publisher of Ogden on Politics blog.
Monday, March 23, 2009
For Immediate Release Contact: Paul K. Ogden
Posted by Team Hammond at Monday, March 23, 2009
Blunt Proof of the Feasibility to Permanently Abolish Property Tax
Melyssa Donaghy 317-938-8913
Max Katz 765-409-6669
BLUNT PROOF OF THE FEASIBILITY TO PERMANENTLY ABOLISH PROPERTY TAX.
Hoosiers For Fair Taxation, Senator Delph, Representative Noe, Representative Elrod and many other legislators along with Stop Indiana, attorney John Price, Eric Miller's Advance America, and the Statewide Taxpayer Alliance know that property tax abolishment, without substantial increases in sales tax and income tax, is realistic and possible. The economist Dr. Bill Styring's 2/2/2 Plan demonstrates that the state of Indiana can completely replace property tax without changing the state's current spending habits.
Dr. Styring's plan does not account for positive changes in Indiana's economy that will undoubtedly follow the elimination of property tax such as heavy real estate investment and increased consumer spending due to increased statewide disposable income. The real estate investment in Indiana alone would cause such an economic boom that it could likely end our abandoned property and foreclosure crisis. Property tax elimination would also likely cause a surge in Indiana's population as more people locate to Indiana to take advantage of real estate purchase opportunities without the burden of property tax. With the population surge would come more sales and income taxes.
The General Assembly does not have to adopt a specific plan until the year 2011. In the meantime, we recommend that the General Assembly approves the 27steps outlined in the report prepared by the Sheperd Kernan commission. While the Governor's commission cannot forecast the savings to the state once the plan is implemented, there is no doubt that the savings would be substantial--perhaps equivalent to the the entire property tax burden currently placed on Indiana's homeowners because our legislators have not had the political will to liberate Indiana's governing structure and her taxpayers from the 19th century.
Our citizen networks will work to replace all legislators who do not support property tax repeal in the November 2008 election.
The 2/2/2 Plan, to replace property taxes in Indiana based upon the latest revenue forecast (07/08 fiscal, estimate):
1) Current IN sales tax (state level rate of 6%): $5.601 billion2% increase would yield an additional $1.867 billion
2) Current corporate profits tax: ~$2 billion
2% increase would yield an additional $.286 billion ($286M)
3) A 2% statewide average of the COIT would yield $2.705 billion to cover local civil units of gov.
By adding these three together ($1.867 billion + $.286 billion + $2.705 billion), a total of $4.858 billion is realized; enough revenue to replace property taxes.
PROPERTY TAX HISTORY PREPARED BY DR. BILL STYRING
Indiana has a 70-plus year history of attempts to lower property taxes by raising other, non-property taxes. In every case these have failed miserably. The new taxes, or higher rates on old taxes, remain in place. And, in short order, property taxes rise back to their old levels, poised to roar even higher.
--1933. General Assembly imposes two new taxes: an individual gross income tax and a corporate gross income tax. The morgue of the Indianapolis Star indicates that the political leadership at the time said this was for property tax relief (1933 was the pits of the Great Depression, and people were losing their homes. Home prices declined by over 40% in the 1929-1933 period). Property tax relief was nonexistent. The state used the money to bail out the state's own finances.
--1963. General Assembly imposes a new sales tax at a rate of 2% and changes the 1933 individual gross income tax (from 1933) to an adjusted gross income tax (the one we have now) at a rate of 2%. Again, the ostensible reason was for property tax relief and again little PTR was forthcoming.
--1967. Those 1963 tax changes were raising more money than projected. The GA decides to give back 8% of sales and income tax revenue to local government for property tax relief. Local units spent the money. No PTR.
--1973. Gov. Otis Bowen launches the most determined PTR offensive yet. The sales tax goes to 4% and a new corporate supplemental net income (profits) tax is imposed. Strict property tax levy controls are imposed. It works... for a time. By 1980, property taxes adjusted for inflation are some 30% lower than in 1973. When Bowen leaves office the levy controls are relaxed. By the end of the decade, property taxes (adjusted for inflation) are back to 1973 levels. The doubling of the sales tax rate from 2% to 4% remains in place, along with the new corporate SNIT.
--2002. More fiddling with the sales tax in the hope of property tax relief. The results of this are obvious, or we wouldn't be debating the current property tax mess. All of this suggests that unless the property tax is totally ripped up by constitutional amendment, the assessment and collection mechanism dismantled, it will grow back. The PTR-inspired hikes in other taxes remain. That is our history. It is a terrible deal for taxpayers.
2. A vote in the 2008 legislative session for a constitutional amendment to repeal property taxes does not amend the constitution. It merely starts the amendment process. Amendments must be passed by two consecutively elected General Assemblies, then submitted to a referendum. Thus any amendment passed by the '08 Assembly must be passed by either the 2009 or 2010 legislatures, then submitted to the voters at the 2010 general election. The General Assembly does not need to decide on a "replacement revenue" package until the 2011 session.
3. What might such a "replacement revenue" package look like? The particular answer will come from the 2011 General Assembly and cannot be determined now (if for no other reason than forecasting state level taxes and property taxes out that far would be a most unreliable exercise. No one need be locked into any particular plan just yet. However, as an illustration that a replacement plan is feasible and less scary than many fear (we don't need to be talking about a 12% or 13% sales tax ... in fact, we should not be), consider just this one possibility.
Local sales taxes are generally very bad policy, for a whole host of reasons too numerous to mention in this short sketch. Sales and corporate taxes are best levied at the state level. It happens that roughly a 2% increase in the sales tax and a 2% increase in the corporate profits tax roughly take care of school propertytaxes. The loss of local control by the state assuming school property taxes is minimal. About the onlylocal control left is on building projects.
For local civil units, a statewide average increase in the individual adjusted gross income tax of about 2% suffices to replace local civil government property taxes, higher than 2% in some units, less than 2% in others.
Thus, a "2-2-2" plan~2% sales and 2% corporate profits at the state level for schools and a 2% average on personal income taxes for civil units—is about what would be needed. This is merely a ballpark projection to 2011.
There may be better plans, it's really a policy question for the General Assembly: do you want to make the trade of something like this in exchange for no-property-taxes-forever-on-anything? Everyone understands "zero."
4. Are there "practical problems? Of course. The two identified are how to make the civil government transition from a property tax base to an income tax base, and how to handle debt backed by property taxes. Without elaborating, the former can be handled using locator software (Map quest-type programs). The debt problem might be handled by treating the current state paid PTRC's as in lieu of property taxes (which they are) and paying PT-backed debt service from each unit's own PTRC.
Conclusion: Total elimination of the property tax via constitutional amendment is the only way to give property tax relief that will stick. The other tax action necessary to achieve this goal—in 2011-are large but not so scary as "a 13% sales tax." They are feasible. The question is for the General Assembly. Are we going to once again go down that 70-odd year path of failed PTR policies or are we going to rip the property tax up by the roots?
Posted by Hoosiers For Fair Taxation on Friday, January 4, 2008.