August 25, 2010

Neumann's property tax scam.

Mark Neumann is trying to sell a cost shifting plan on property taxes that he claims is the largest proposed tax cut in Wisconsin history. I thought it would be a public service to explain this in easy to understand terms.

Right now if you have a utility circuit it is paid one month in advance. (Cable TV for example) You actually pay for your August service in July.

Property taxes work in the same way, you pay a year in advance instead of by the month.

Now let us say the cable TV company changes their payment policy and asks you to pay for your service in the month it is delivered instead of a month in advance. You would now pay for your August service in the month of August instead of July as it is now. However since you have already paid your August service that new policy would not kick in until September.

In essence you "skip" a payment since you are already paying in advance.

However, you do not save a dime as you still wind up paying for each month of service. What you are doing is altering when you pay for those services.

Neumann's tax proposal is just like that, he wants to take people from paying a year in advance to the current month of service. There would be a calendar lag involved but you don't get to skip to save any taxes at all. That plan would also make you pay that month instead of the yearly payment and could screw up deductions for some people that itemize their tax deductions based on what year they pay their property taxes in.

Selling this as a tax cut is a lie.

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