Instead of taking advantage of the nation’s broad support for tax reform, many congressional Republicans want to tax me and millions of others for money we never had.
When we pay state, county, and city taxes, we have no choice — other than to move, and many Americans can’t move because of their jobs. We never get to use that money, and in most cases, it more resembles a direct transfer payment to these local governments in our mortgage payment. Yet, for some reason, some Republicans think we should have to pay taxes on our taxes.
Paying taxes on our taxes that we already paid. Since when is that conservative?
If you listen to some commentators and administration officials, eliminating the tax deduction for state and local taxes is a way to punish liberal tax-and-spend states into becoming fiscally responsible. That’s a nice talking point to bash New York, New Jersey, and California, places that no doubt have bloated governments and could use some better fiscal management.
However, removing this tax deduction hurts far more than just liberals or even liberal areas. On the contrary, it also hurts areas forced to build schools and roads due to positive economic growth.
Consider Loudoun County, Va., where I serve on the elected Board of Supervisors as a Republican. The county government is run by a Republican majority. The median real estate tax homeowners pay in the county is well more than $5,000 per year, compared to nearly $3,300 nationwide. That high number isn’t because me and my colleagues on the board are a bunch of liberals. This year, we voted for a tax cut for the first time in years, lowering the rate to 1.125 percent, below the 1.15 percent national average.
So, why can’t we cut even more? Because our county is one of the fastest growing in the nation, both in population and with jobs.
In 2000, Loudoun had fewer than 170,000 residents. Today, it has more than 380,000 residents and more than 81,000 school children. Each child costs more than $13,000 to educate, just in operations expenses. If each new house pays $5,000 in taxes, yet has two or more kids, the budget math goes upside down quickly.
Which might explain why 67 percent of our county budget is school funding. Our county is investing more than $100 million per year in school construction and renovations to keep up with growth. Add that to the operations of funding a system that grew at 3.8 percent.
Can we cut the remaining 33 percent? Not unless we want to stop building roads in one of the most congested regions in the nation or stop operating the sheriff’s department, fire and rescue, parks and recreation, and other basic services. In fact, most of my colleagues would argue we under-fund these services. If you ask any of the other board members, they will tell you I’m a budget hawk who makes motions (which rarely pass) to cut new positions routinely during budget season. I believe in limiting the growth of the county government.
However, I also believe in federalism. Federalism means that government which is most local governs best. This proposal to tax Americans on their taxes they pay to local governments undermines federalism — incentivizing smaller local governments, all while the federal government continues its record-smashing expansion. If followed to its logical conclusion, the proposal takes money away from local governments and increases the funding for the federal government. It would take money away from local school systems and send it to the federal Department of Education.
Governments such as Loudoun County would be pressured to cut school funding, while the federal government would be getting more revenue from Loudoun to expand its reach. Counties where good economic growth is occurring will be hammered by higher federal tax bills.
Again, how is that conservative tax reform?
Growing counties that properly invest in education and transportation shouldn’t be punished by federal tax policy. If you add our local taxes to other county property taxes and the state income tax, our residents provide a significant amount of their incomes to localized government. We shouldn’t be taxed on that money twice. If we’re not going to eliminate the IRS altogether and if Republicans plan to keep the charitable and mortgage interest deductions — gifts and purchases which are voluntary — we should also be able to deduct taxes, which are involuntary.
Ron Meyer (@Ron4VA) is a Washington Examiner columnist and the editor of Red Alert Politics (a sister publication of the Washington Examiner). He’s also a supervisor of Loudoun County, Va. (R-Broad Run).
