76-05-A4
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Inflation and the Property Tax II
TranscriptHigher property taxes are an inevitable result of inflation because inflation itself is simply another tax. I'll be right back. It may seem uncharacteristic for me to sympathize even a little bit with property tax assessors. I regard all tax collectors as a necessary evil and I'm convinced they would be less evil if they were less necessary. However, I have some sympathy with local tax assessors for these days they're almost as much victims as they are villains. When homeowners protest against outrageous increases in assessed values and when property tax assessors try to justify such increases in relation to market values, I have to admit both sides have a point. But the increases are usually both technically justified and practically outrageous and I'm astonished that neither side of the argument tries to find the reason for this paradox. It isn't hard to find, it's called inflation and it works out of Washington D.C. Inflation occurs when the growth of the nation's money supply outstrips the growth in the nation's productivity. The Federal government controls the nation's money supply and is therefore the primary source of inflation. Inflation raises prices because more money is available but more goods and services and homes are not, thus property market values rise and property tax assessors are technically justified in raising assessments. But the homeowner is equally justified in thinking the raise is outrageous because he's caught in an unmerciful governmental triple squeeze. Higher assessments mean higher taxes at a time when all other prices are climbing because of inflation. Tax increases from higher assessments are often compounded by higher property tax rates imposed so that local government also can pay the inflated costs of goods and services. Higher wages don't help because the higher the income, the greater the percentage of it taken by income tax and, of course, the homeowner trying to live on a fixed retirement income is squeezed most unmercifully, since he has no defense at all against inflation. In truth inflation is simply another tax imposed by Washington in the name of easy money. A tax which makes the existing property tax structure unbearable, but before we throw out the property tax, the one tax over which we can at least exercise some local control, let's try an alternative. Let's put the pressure on the bureaucrats and legislators in Washington to end the needless hidden tax of inflation. Only they can do it. This is Ronald Reagan. Thanks for listening.
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