With our property taxes increasing so wildly and no real solution in sight, I think it’s time to separate the wheat from the chaff on this issue. We hear some candidates for the Wyoming state legislature suggesting that the band aids applied to this nagging problem in last year’s session provided “property tax relief.” I beg to differ. All that was accomplished were a few feel good adjustments with no real answer to the problem.
The Wyoming state legislature had contracted with a private firm to conduct a study on the feasibility of adopting an acquisition-based property tax system in Wyoming. That report purported to show that acquisition value property tax systems result in “inequities to taxpayers.” The report posited that owners of identical properties face differing property tax liabilities based on when they acquired their property.
Based on that report, the legislature declined to consider acquisition-based property tax. As to “inequities,” the legislature opted to grant a major decrease in property tax to seniors over 65 years of age who have owned their homes and paid property tax in Wyoming for 25 years or more. They apparently failed to see the inequities that bill imposed on Wyoming taxpayers.
The report went on to lambaste California’s unique acquisition-based property tax, claiming that it somehow retarded educational spending. As one who lived through the Proposition 13 era, I can testify that it was a life saver for property owners during a time of rising property values not dissimilar to that many Wyoming counties are experienced.
The suggestion was that the current standard being applied to Wyoming property tax (based on fair market valuation) is “fair” and equitable. However, it rests upon a dangerously false assumption, i.e. that it’s “fair” to tax unrealized gain (current appraisal) rather than taxing the gain at the time when it is realized, e.g. when a house is sold. I believe that the current system violates very basic, longstanding, and widely accepted tax policy, i.e. that capital gains are taxed only when they are realized. Thus, while a person may have bought a house in Wyoming some time ago for, say, $100,000 and that property is now assessed in value at, say, $800,000, is it “fair” to tax them on this increase in value before such increase is actually realized, e.g. by the sale of the house? Common sense would seem to suggest that it is not.
It appears the only way that genuine property tax reform is going to happen in Wyoming is if the voters elect genuinely constitutional conservatives to office.
Permit me to suggest that as candidates for legislative offices approach you and ask for your vote, that you ask them how they intend to vote on the only truly just and equitable basis of tax reform, i.e. acquisition based property tax.
In case any of them try to tell you that the law must be changed in order to implement such a change, please remind them of the fact that the Wyoming legislature has the power to define what the basis for assessing property tax is. So, you might want to ask the candidates how they propose to vote on this crucially important issue if elected. Please also ask them to justify that vote.
Submitted by Charles Cole, Sheridan.
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