Amendment No. 5 on the ballot Nov. 5 is intended to mitigate the “bracket creep” inherent in property taxes.
It works the same as the bracket creep that was built into the federal income tax until Republicans under President Ronald Regan passed the Economic Recovery Tax Act of 1981. That legislation slashed the highest rate from 70 to 50 percent and indexed the brackets for inflation, which was pushing people into higher tax brackets.
Inflation also affects property values and the recent surge has increased the value of homes – and raised property tax bills as well.
Amendment 5 would alter the homestead exemption.
According to the James Madison Institute, a yes vote “supports adding an inflation adjustment to the current homestead tax exemption. There are two $25,000 exemptions available to property owners, who can reduce $50,000 off the taxable value of their home. This measure would create an inflation adjustment for the second of those two $25,000 homestead exemptions, which does not affect taxes that pay for schools . Under the measure, assessments would be indexed to the percent change in the Consumer Price Index. For example, if the rate of inflation is 8 percent, it would increase the value of the exemption from $25,000 to $27,000.”
Libers, who favor higher taxes and bigger government, oppose the amendment because it would reduce tax revenues to local governments.
Politicians, however, can increase tax rates. Liberal politicians prefer automatic tax increases that don’t require them to cast a vote.
