Who likes high property taxes? Not me. But in many ways we only have ourselves to blame for our high property taxes. In Washington state we fund our state and local governments with just two major revenue sources: sales tax and property tax. (Yes, as an owner of a small business I know that there are also business taxes, but most people don’t pay them directly). We consistently refuse to consider the idea of a state income tax, but maybe it is time to rethink.
Just think how high our property taxes would be if we didn’t have a state sales tax. We don’t like paying a sales tax but sales tax revenue helps to lower our property tax. A state income tax could do the same. Most states have a state sales tax, property tax and income tax, and together the three tax sources help to spread out the burden of funding state and local government. With a state income tax we can lower the total state tax burden on residents living on a fixed or stagnating income (in other words, most of us) while our homes continue to increase in value. It is certainly better than the alternative.