Dear George,

With all three of the candidates for the 57th district shouting "progressive" from the top their lungs, I am surprised not to see them taking time to distance themselves from Tim Kaine's homeowner tax relief plan.

It is a demonstrable fact that in Virginia those of low and modest incomes bear, proportionally, a larger burden in state and local taxes than those of higher incomes (See http://www.ctj.org/whop/whop_va.pdf, produced by Citizens for Tax Justice, http://www.ctj.org). Sales taxes, meals taxes, real estate taxes and local utility taxes are all applied without regard to one's ability to pay - and the income tax is barely progressive. As property assessments have risen, the situation has become worse - there exists the real prospect that those of limited income might be forced out of their homes because of rising local real estate taxes.

Tim Kaine wants to extend to localities the authority to provide a homestead exception not exceeding 20% of the assessed value. Setting aside the (critical) question about how localities would make up for the lost revenue, this plan, in my view, is unworthy of support.

An example can be illustrating. Using city on-line records I looked at two houses, one on Hinton Ave and one on Evergreen. The owners of the former home, assessed at $148,000, would receive a tax break of $322/yr. under Kaine's plan if fully implemented. The owners of the latter, assessed at $450,000, would receive a tax break of $981/yr!

I am convinced that most homeowners are deserving of a tax break but I am even more convinced that when summed over the city, the lion's share of the tax relief will flow to those with the highest incomes. George Bush would be proud!

Alternatives exist that can provide some relief from rising assessments and are truly progressive. One would be to provide to all homeowners the same dollar exemption, ( $40,000 for example) independent of their assessment. This would provide, proportionally, a larger tax break to those living in modest homes.

I prefer a plan that is called a "circuit breaker." In this scheme, localities could enact ordinances that would limit real estate taxes to a fixed percentage of home owner's income, for example 2 or 3%.

Once the taxes on your home exceeded this amount the "circuit breaks" and your taxes would remain fixed. Unlike Kaine's plan, when localities raise the tax rate or assessments rise, those of limited incomes would be protected and, effectively, the local burden would shift to those best able to pay.

The alternatives are not completely free of problems - those interested can read about them at http://www.itepnet.org/ - but they are used successfully in other states.

Local Democrats take pride in their candidates being forward-thinking. Unfortunately when it comes to Tim Kaine's tax plan, some are stuck in reverse.

Donal Day (electronic mail, May 9, 2005)