August 1, 2007

Strakon Lights Up

The price we pay for decivilization
      They tax; we sleep

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Indiana has been groaning through yet another property-tax crisis over the past few years, and this year the groans turned into screams in some counties — notably certain urban counties such as Marion (Indianapolis) and Allen (Fort Wayne) that harbor a disproportionate number of net tax-eaters in their population. (I say "net tax-eaters" because even productive people consume tax money. You can't avoid it unless you retire to a cave.) According to the media, the average hike statewide, over last year, is 24 percent.

In the portion of Aboite Township — prime white-flight land — that Fort Wayne swallowed up a few years ago, property-tax assessments have soared 57 percent (sic, and, yes, sick). As I noted a year ago in my column "Enemies of progress," Aboiters fought annexation with every torch and pitchfork they could lay hands on, fearing an explosion in taxes. But I strongly doubt that even they expected a nuclear detonation of 57 percent. One thing's for sure. Aboiters don't see their new municipal "services" as being 57 percent more valuable than their old county "services." Various city and county officials, meanwhile, are shrugging it all off, calmly explaining the various recondite technicalities that brewed up this perfect storm of robbery. No one, you see, actually intended to mount this particular axe-wielding episode of Viking plunder. It just happened!

As we all know, with government many bad things "just happen." And no one is ever at fault. You've got to hand it to government "planning" and government "planners."

One attempted explanation I especially like is, Hey, quit your complaining! Your house was improperly under-assessed for years! We've now switched to a market-based assessment! I always like it when looters and plunderers start using language such as "market-based." It almost provokes me to shake the mothballs off my old red-and-black anarcho-revolutionary robe, pull up the cowl, and start chanting, "Day of the Rope, Day of the Rope, Day of the Rope ..."

Some counties seem to be teetering on the edge of a tax revolt: the telescreen has even aired tape of white middle-class homeowners and landowners waving placards and chanting in the street outside government buildings, including the Governor's Mansion. In Marion County, protesters costumed as 18th-century white folk or as Indians have even re-enacted the Boston Tea Party, dropping tax bills into the river. For the benefit of those living on the periphery of the country, I should explain that demonstrating in the street over a public issue is most un-Hoosierish, so whenever you see non-minorities and non-Bolsheviks engaging in it hereabouts you know that ordinary folks are feeling the boot press especially hard on their neck.

Gov. Mitch Daniels, a bright knife-blade of a Republican technocrat, has ordered Marion County to perform a new reassessment and freeze tax billing in the meantime (who imagined he had that authority?); but more generally he proposes shuffling some tax-rebate money around, in an attempt to defuse the rebellion temporarily and win himself at least a chance of being re-elected next year. He has also invited counties to impose or increase local income taxes, under an existing law allowing them to do so "to pay for their growth in spending," in the nicely revealing phrase of Lesley Stedman Weidenbener, a reporter for the Louisville Courier- Journal ("Local officials get more time to study tax changes," July 12).

Other pols, too, including both Republicans and Democrats in the legislature, want to hike income taxes. Typical of such men is Rep. Jeff Espich, a Republican and the ranking minority member of the House Ways and Means Committee, who "hopes that if Daniels convenes a special session, lawmakers consider long-term ideas as well, including plans that would give local governments more incentives to turn to income taxes rather than property taxes for future spending," according to a July 14 story in the Louisville Courier-Journal, "Daniels wants faster property-tax relief."

Several weeks after the media officially recognized the crisis, a few would-be officeholders finally began murmuring about how it might be a good idea to halt the growth in government spending. But few of those in power now are urging such a halt, let alone a cut in spending. It stands to reason. Only people who lack the power to rob their neighbors have to think about cutting their spending when it outruns their means.

Now, in order to present a balanced view — and you know how important that is to me — I should note that the Central Government hovers over state and local pols, waving a whole forest of carrots and sticks in order to keep them spending and spending heavily. But with respect to those pols, I have once again to paraphrase the saying of that old realist in "Godfather, Part II," Hyman Roth: "This ... is the business ... they have chosen." In other words, my sympathy is limited.

Increasing Tax X in order to cut Tax Y: Well, that's where I came in, you might say. In 1963, a property-tax crisis was bubbling in Indiana, along with a "budget shortfall." I was just coming to some political awareness, at age 13, and it was the first time anything to do with state-level taxes ever registered with me. The general shape of the thing stuck in my memory, too, though I had forgotten some nifty details by the time I started researching this piece. Democrat Matthew Welsh was governor, and to "solve" the property-tax crisis, he managed to impose the first sales tax that the people of Indiana had ever experienced. One of the nifty details I'd forgotten is that in order to do the dirty deed Welsh required the collusion of the Republican lieutenant governor, Richard Ristine, who cast his vote in favor, breaking a tie in the Senate.

That first sales tax, which evoked outcries from one end of the state to the other, was levied at 2 percent. Two percent! That's the niftiest detail of all, and I am glad to have been reminded of it.

Somehow, by the time the beloved, avuncular Republican Governor Otis ("Doc") Bowen seized power in 1972, another property-tax crisis had erupted, and the saintly "Doc" ingeniously proposed — an increase in the sales tax! Larry DeBoer, an ag econ professor at Purdue, tells the story this way:

Bowen had pledged to reduce property taxes during his 1972 campaign and now, as governor, sought to deliver. He asked for property tax relief that was "visible, lasting, and substantial." Bowen proposed increasing the sales tax from 2 percent to 4 percent to pay for the property tax cut. The debate was long, but the House passed the increase on the last day of the session. In the Senate, again, the vote was a tie. The lieutenant governor was Robert Orr, and he voted aye. The Bowen plan became law. Bowen praised Orr for risking his political future with that vote. ("Tax Restructuring Past," Capitol Comments, February 2, 2002)
(Unlike Ristine, who was defeated in his run for governor during the Lyndon B. Satan landslide of 1964, Orr seems to have risked little or nothing for helping to impose this 100 percent tax increase; Hoosier self-victimizers trooped to the polls and elected him governor in 1980.)

Absent from DeBoer's account is any expressed sentiment, on the part of the pols involved, for slashing government spending in order to slash property taxes. Instead, we get yet another example of the noxious polspeak whereby a hike in one kind of tax "pay[s] for" a cut in another kind of tax.

After the triumphant departure of the glorious "Doc" (he later became Reagan's minister of socialist welfare), things, you will not be surprised to learn, did not stay put on the official-robbery front. The pols eventually hiked the sales tax to 5 percent and then to 6 percent, which is where it stands for the moment. You will have noticed that the steady increases in the sales tax did not put an end to Indiana's periodic property-tax crises. Also falling notably short in crisis-end-putting are the state income tax, the county adjusted gross income tax (CAGIT), the county option income tax (COIT), and the county economic development income tax (CEDIT), none of which existed in 1963.

Naturally, over the years a tax or two have been repealed or "reformed" — for example, the state recently got rid of its corporate gross income tax and its business inventory tax — but if you haven't already drowned in detail you will recognize a trend, and its direction.

I hope you'll recognize something else, too. Namely, how important it is for our supervisors that the oldsters among the taxpaying population be rendered amnesiac, and the youngsters left uneducated, with respect to the tax robbery that has gone before.

They might be less amnesiac, or more interested in educating themselves, if they could recognize that taxation is robbery. And that their rulers are robbers. And that robbers always want more.

People are always complaining about taxes, but they usually do so ruefully. No one is rueful after being batted around by a mugger or terrorized by a stick-up artist. This is one reason that IRS "collection agents" are discouraged, these days, from taking baseball bats to the windshield of cars in which desperate, cowering tax-victims have sought shelter. That kind of collection technique, now that some of the media are finally willing to report it, would too closely resemble an episode of "The Sopranos." Can't have that. Much better to keep everything in the realm of bureaucratic politesse, happy-face employer collusion ("withholding"), jargon-clotted forms, and propaganda about "voluntary compliance."

Many people get bored when they read about taxes, but few get bored when they read about armed robberies perpetrated by street criminals. That's why I metaphorize about Viking raids, refer to the Day of the Rope, and remind readers of those bat-wielding IRS thugs of yore. It's probably why those aggrieved folks in Indianapolis dressed up like Sam Adams and his gang. But I'm afraid that once the technocrats complete their obscurantist rejiggering, and the currently embarrassed pols find adequate cover, most Hoosier tax-victims will once again fall back to dozing in the gray, silent fog of routine. We need to keep burning through that fog, and keep our imagination lively enough so we can remember what all taxes, and all taxers, really are.

August 1, 2007


Effective April 1, 2008, in an attempt to "pay for" reductions in property taxes, the robbers in Indianapolis raised the state sales tax from 6 percent to 7 percent.

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