Geonomic Tax Shifting
|January 9, 2007||Posted by Staff under Archive, Progress Report, The Progress Report|
Geonomics Conference Focuses on Environmentally Sound Tax Reforms
Geonomics Rising in Oregon
From July 30-August 1, an important geonomics conference was held in Portland, Oregon. The conference was attended by elected officials, journalists, economists, lobbyists, bureaucrats, activists, doctors, environmentalists, professors, researchers, reformers, students and others. Representatives of the Banneker Center, publishers of The Progress Report, were also there.
A lot of important ideas were reported on at this event. Here is what the Associated Press had to say about it.
Study focuses on alternate way to collect property taxes
SALEM, Ore. (AP) — “Geonomics,” the practice of taxing only the land and not the structures on it, will be the focus of a study here as Oregon considers changes in the way people pay taxes.
The New York-based R. Schalkenbach Foundation will fund a study in Salem to determine the winners and losers of such a tax system. It hopes to have the results in time to be considered by Gov. John Kitzhaber’s task force on tax reform later this year.
In Oregon, the property tax system is based on the value of the land plus the value of any structures or equipment upon it.
But under a land tax, also known as “Geonomics” or sprawl taxes, just the value of the property itself would be taxed.
That doesn’t mean less money would be collected. But who pays more and who pays less would vary based on where their property is and whether it is being used efficiently.
Most home and buildings owners would save money. But those who own bare land, parking lots or strip mall-type developments would pay more.
In theory, it encourages property owners to develop unproductive land so it becomes profitable, said Russ Beaton, a Willamette University economics professor who will be an adviser for the Salem study.
He said it would spur activity in urban cores, where abandoned warehouses and downtown parking lots would be removed in favor of higher-density development.
“I’ve long advocated this kind of thing,” Beaton said. “I’m very curious about it.”
Versions of the concept are already in use in Taiwan, Denmark, Australia and New Zealand. It is being tried in Pennsylvania.
Studies in other cities and counties, including in Washington state, have shown that about 75 percent would see their taxes go down, 20 percent see no change and 5 percent see their bills rise, said Kris Nelson, a Salem businessman and vice president of the Portland-based Geonomy Society.
Nelson said the system also would favor businesses who want to expand or upgrade their buildings, because they no longer would be taxed on the higher value of structures. “Most of our land is not used very well,” he said.
Oregon State University economist Bruce Weber said the arguments appear sound, but he said any dramatic shift in the way taxes are determined is likely to face stiff political opposition from those who have the most to lose.
“In this case, it looks like the people who lose will lose big,” he said.
The big question remains answered, he said: “If we implement it in Oregon, would it really work? We don’t know.”
The land tax is likely to be part of a tax reform package pushed by the Oregon Environmental Council, said Executive Director Jeff Allen, who is serving on a subcommittee with the governor’s tax reform task force.
Allen said the state should consider so-called “green taxes” — such as taxing pollution or those who drive their cars during high-traffic periods. “The notion of taxing what we don’t want rather than what we do want has a tremendous potential in Oregon,” he said.
Oregon voters early this century defeated an initiative attempt to adopt a land tax, said Jeff Smith, president of the Geonomy Society.
But he blames that defeat on the influence of land speculators and said today’s disenchanted taxpayers are ready for a better model.
The announcement that Salem will be the object of a land-tax study coincides with a national conference on the same subject ending Saturday in Portland.
How would you make geonomics more popular in Oregon? Let us know!