Vail Daily letter: Taxes misunderstood
Ryan Summerlin September 26, 2012
While attempting to ring-fence a county spending program from voters last week, a candidate for commissioner understated the cost of the program to families.
Assuming it was a good faith error and not simple political puffery, it reflects an whoppng underestimation of the tax bite on families.
This candidate wrote that the cost of open space is just $59 annually for a $449,000 home. That may be true as far as it goes. However, there is more to the story.
It assumes an average family does not spend a nickel with local merchants. No groceries, no gas, no nothin’.
Businesses are charged much higher property taxes than residences. Every dollar a family spends with business located in the county includes a slice that must go to Eagle County property tax.
Ultimately, every dollar of taxes falls on a person somewhere, sometime. It can be no other way.
Property tax on business is paid by customers through higher prices. It is also paid by employees and business owners through lower incomes to both. Some families pay all three ways.
The cost of open space is not $59 per family, but $290 per family per year for 2011, a misunderstanding of five times the orginal assertion.
Secondly, stating the tax as a one-year cost glosses over the fact that the tax is not charged just once. It is scheduled to be charged for 13 more years before voters have an opportunity to control the expense.
That runs the bill up to $3,500 for the average family in today’s dollars.
Viewed more completely, the cost of the open space is nearly 60 times that originally stated by the candidate for commissioner.
If taxes were regulated like consumer finance, costs would be have to be disclosed more completely and candidly. Unfortunately, they are not.
Given the weak understanding of taxes among those charging them, citizens may not be surprised that public officials have put a typical family on the hook for $600,000 to $800,000 of various forms of government debt, depending on how you measure it.
That is on top of $1.3 million in lifetime taxes that typical families already pay.
You can take things back to the local general store. Or the book store. Or the bike shop.
But in public policy, the mistakes are much more expensive. And you are stuck them. So caveat emptor. Let the buyer beware.