There are only two things in life that we can all count on, dying and paying taxes.
But what good are taxes? What do they do? Are they even really important?
The short answer here is a resounding yet tired yes. Taxes are a critical part of any reasonably advanced society and play a key role in helping fund many of the things we know and love.
At its simplest, taxes are important because of what they provide for the country, revenue.
As the lifeblood of an economy, revenue drawn from taxes helps provide everyday necessities that many of us take for granted such as a fire, police, education and trash services.
According to Dr. Maria Cruse, professor of political science at Chemeketa Community College, taxes are essential for the functioning of society and the economy.
They provide the necessary resources for governments to carry out their responsibilities to their citizens and are the primary source of revenue for governments to fund public services such as education, healthcare, infrastructure and public safety.
Taxation has been a part of American history since its inception when colonists opposed taxation (no taxation without representation) due to the perception that they were a form of forced dependence to England.
After the Revolutionary War, taxes became a symbol of independence as it was the newborn county’s first time establishing taxation of its own accord, according to the Internal Revenue Service (IRS).
Not only did this mark a major shift in how our infant country was able to fund itself, it displayed a shift in attitude towards taxation as this time, taxes went towards funding the country itself rather than a colonizing force.
The World Bank, an international financial institution that provides loans to various governments around the world describes taxation as “a fundamental way for countries to generate public revenues that make it possible to finance investments in human capital, infrastructure and the provision of services for citizens and businesses.”
In terms of fair taxation, governments need to balance goals such as increased revenue mobilization, sustainable growth, and reduced compliance costs with ensuring that the tax system is fair and equitable.
Fairness considerations include the relative taxation of the poor and the rich; corporate and individual taxpayers; cities and rural areas; formal and informal sectors, labor and investment income; and the older and younger generations.
Multiple types of taxation exist such as income tax, payroll, state and federal, excise taxes, corporate and property tax, individual income and capital gains taxes, just to name a few.
Here in Keizer taxation takes several forms such as property taxes, special funds (water, sewer and police funds) and levies, which is how the Keizer Fire District is supported.
While taxation is important, a growing social and economic sentiment, one that has been percolating since the 1960s when Congress first lowered the top marginal tax rate to 77%, is that taxation is akin to theft.
While in many cases the taxation of people based on income remains regressive, it still fuels what we hold dear in this city and without it, troubles only grow.
During the Keizer City Council’s long range budget meeting held in two sessions earlier this year, City Manager Adam Brown and Assistant City Manager Tim Wood discussed the precarious state of property taxation in the city and how it affects Keizerites overall.
For property taxation, rates in the city are accessed using a levy rate which takes a percentage of each $1,000 of a home’s assessed valuation.
The city’s levy rate is a function of the permanent tax rate and here in Keizer is $2.08 of every $1,000, half the state tax average and in the bottom five lowest property tax rates.
This lowered rate, which was cemented by Measure 50 in 1998, allows lowered tax rates for homeowners but negatively affects how the city can afford and manage its budget as well as provide needed services to citizens such as waterways, streets and schools.
The task force highlighted an issue in that new construction in Oregon is not added to property tax rolls at its construction or at real market value but instead reduced to an assessed value via the change property ratio, a method of determining how a property should be monetarily assessed based on the combined assessed rates of surrounding properties.
An example given at the meeting took a three bedroom, two bathroom house originally valued at $490,000 with a .50% change property ration added, which brings the assessed value to $249,263.
The assessed value is what the city will tax which for Keizer is $2.08 per $1,000, which means this property would only net only a little more than $500 a year.
Ultimately, this creates a scenario where there are an increasing number of people in Keizer that all require services that the city will struggle to provide based on what taxes are collected.
Contact Quinn Stoddard
[email protected] or 503-390-105
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