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In Our View: Inevitable, Complex Taxes

Understanding how system works, what money supports lessens pain

The Columbian
Published: January 5, 2017, 6:03am

The guess here is that few people actually enjoy paying taxes. As in very few. As in a number akin to those who hope to contract gout.

And while few people send in their tax bill or fill out a 1040 form with a song in their hearts, most of us willingly, but begrudgingly, do so for the betterment of our communities — even if we don’t fully understand how the tax system works. To that end, a recent article by Columbian reporter Jake Thomas was helpful in unraveling the mystery that can be found in property taxes.

As Clark County Assessor Peter Van Nortwick explained: “When the assessed values go up, the levy rate goes down. When the assessed value goes down, the levy rate goes up.” Got it? That part sounds simple, and the gist is that even though the county has increased its levy by 1 percent for the coming year, the tax on an individual property might decline if that property’s value represents a decreasing portion of total assessed value in the county. Or it might not; as we mentioned, it’s all very complicated.

Another instructive piece of information is that there are 45 taxing districts in Clark County, ranging from school districts to cities to port districts to other entities. For a home assessed at $279,100 — the county’s median sale price in 2016 — about $335 of property taxes went toward the county’s general fund, while thousands went to other taxing districts.

Through all of this, something tucked into the graphics that accompanied the story caught our eye. According to the Washington State Department of Revenue, the average rate for state and county property taxes has dropped precipitously over several decades. In 1973, state and county taxes were assessed at an average of $18.82 per $1,000 of assessed value; last year, the average was $11.47 per $1,000 of assessed value.

This seems to support a couple other bits of information. During a recent teleconference with The Columbian’s Editorial Board, Gov. Jay Inslee noted that the state’s tax collection as a percentage of Gross Domestic Product has declined in recent decades. In addition, the state Department of Revenue last year reported that Washington’s taxes as a percentage of income are the 35th highest in the nation.

Despite that, there are persistent tropes that taxes are too high, that government has more than enough money, and that elected officials are bound and determined to dig their hands into the wallets of taxpayers. Those tropes have grown tiresome. For those who insist that making America great again includes reducing taxes upon the wealthy, we remind that the top marginal tax rate upon individuals during the 1950s was 91 percent, and many people think America was pretty great back then.

Understand, we are not advocating for an income tax of 91 percent or for any tax increase in general. But we are advocating for an increase of knowledge and for policies to be based upon factual information rather than the unfounded anti-tax mantras many politicians use to appeal to voters’ basic instincts.

Taxes, undoubtedly, can be complex and confusing — and yet they remain inevitable. Therefore, it is essential for taxpayers to have an understanding of how those taxes work and what they actually support. In Washington, for example, more than half of property taxes go to local schools through levies approved by voters.

Facts such as that might make it a little less painful when your tax bill arrives.

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