Hiking residential tax rates is a hard-to-sell proposition at the best of times.
But doing so at the same time as possibly lowering commercial rates is bold, even if the reason behind the proposal has some justification.
While logic and outrage seldom are parallel, it’s understandable homeowners would be unhappy with shouldering more of an increasing tax burden. Although businesses do not get a vote on their taxes, there is still a popular perception that owners of local businesses have the ear of city hall.
During the last election, both mayoral candidates portrayed themselves as being friendly to the interests of local commerce. While running, Mayor Henry Braun was ironically accused by his rival for being anti-business, even as he suggested that businesses carry too high of a tax burden in the city.
The current proposal being considered by council stems, in part, from that election proposal.
As Braun notes, businesses pay higher tax rates regardless of their level of profitability. Lowering their tax burden would, in theory, attract more business and, over the long haul, either save taxpayers money or allow the city to provide more services – all while creating more local jobs.
The economic justification for cutting taxes on business is strong. After all, business builds expenses into their bottom line. When overhead rises, so too do prices, meaning that business taxes end up being shouldered by the general public, in varying degrees.
At the same time, it’s worth noting the tax burden on businesses has decreased over the past decade due to complex changes in total assessment values. Whether council should speed up the process is worthy of debate, especially when doing so comes at a cost to increasingly stretched homeowners.