Taxing lawyers, docs, Realtors

January 7, 2008
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Your lawyer probably isnâ??t complaining. Neither would your doctor, Realtor or accountant.

In all the talk about reforming property taxes, hardly a word has been said about shifting some of the property tax burden to services.

That means some of the most lucrative potential sources of revenue may stay off the table during the General Assemblyâ??s short session, which begins tomorrow.

Steve Johnson, the former CEO of the nonpartisan Indiana Fiscal Policy Institute, thinks itâ??s unrealistic to think legislators would take up the issue while it deals with property taxes and reforming local government. But he insists it should come up, if not now, then in the next few years.

The state hasnâ??t broadened its tax base in a meaningful way since it added a sales tax in the 1960s, Johnson points out.

Previous attempts to tax services were quickly slapped down by lobbyists, but, Johnson adds, â??It eventually is going to have to come to a head and be seriously discussed.â??

Should Indiana tax services?
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  • Norm,

    The last time I looked Indiana does tax services. Look at your next plumbers, cable, telephone, IPL, IWC, ups shippments, etc.

    If the State would tax services from Doctors, Lawyers (you missed lawyers), realtors, stock brokers, consultants, etc. I would just be passed on to the public. Regarding realtors, are you talking about taxing the realtor or the buyers of the new home?

    dwf
  • Politicians should devote there time to cutting structural government expenses as proposed by the bipartisan committee headed by former Governor Joe Kernan and Indiana Supreme Court Justice Randall Sheppard instead of dreaming up new revenue sources or playing a shell game with taxes?
  • DWF, a possibility that has been discussed is to tax property transactions. Sellers, not Realtors, would pay this tax. The tax probably would depress property prices, in effect cutting Realtor commissions.
  • It is unlikely that politicians will reduce their spending, eliminate township government or streamline government administration unless the states news media, voters, and business lobbyists provide relentlous public pressure on government leaders.
  • What about the self-employment tax paid by consulting professionals (of all stripes)?

    Here's a tip from a consultant for free: Streamline services and the ways in which they're delivered, institute process improvement to find waste (and reward people for its elimination), ruthlessly delete reduncancy in all areas, then consider what services are (1) critical and (2) important but can be temporarily sidelined. If we're spending more than we take in, we're what my great grandmother with her 5th grade education called broke. The stuff in the (1) pile gets saved first and then we do triage on the stuff in the (3) pile. Finally, we figure out the best way to collect taxes for the services that, in the final analysis, are needed by the people (and that we're willing to pay for).

    How's that?

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  1. to mention the rest of Molly's experience- she served as Communications Director for the Indianapolis Department of Public Works and also did communications for the state. She's incredibly qualified for this role and has a real love for Indianapolis and Indiana. Best of luck to her!

  2. Shall we not demand the same scrutiny for law schools, med schools, heaven forbid, business schools, etc.? How many law school grads are servers? How many business start ups fail and how many business grads get low paying jobs because there are so few high paying positions available? Why does our legislature continue to demean public schools and give taxpayer dollars to charters and private schools, ($171 million last year), rather than investing in our community schools? We are on a course of disaster regarding our public school attitudes unless we change our thinking in a short time.

  3. I agree with the other reader's comment about the chunky tomato soup. I found myself wanting a breadstick to dip into it. It tasted more like a marinara sauce; I couldn't eat it as a soup. In general, I liked the place... but doubt that I'll frequent it once the novelty wears off.

  4. The Indiana toll road used to have some of the cleanest bathrooms you could find on the road. After the lease they went downhill quickly. While not the grossest you'll see, they hover a bit below average. Am not sure if this is indicative of the entire deal or merely a portion of it. But the goals of anyone taking over the lease will always be at odds. The fewer repairs they make, the more money they earn since they have a virtual monopoly on travel from Cleveland to Chicago. So they only comply to satisfy the rules. It's hard to hand public works over to private enterprise. The incentives are misaligned. In true competition, you'd have multiple roads, each build by different companies motivated to make theirs more attractive. Working to attract customers is very different than working to maximize profit on people who have no choice but to choose your road. Of course, we all know two roads would be even more ridiculous.

  5. The State is in a perfect position. The consortium overpaid for leasing the toll road. Good for the State. The money they paid is being used across the State to upgrade roads and bridges and employ people at at time most of the country is scrambling to fund basic repairs. Good for the State. Indiana taxpayers are no longer subsidizing the toll roads to the tune of millions a year as we had for the last 20 years because the legislature did not have the guts to raise tolls. Good for the State. If the consortium fails, they either find another operator, acceptable to the State, to buy them out or the road gets turned back over to the State and we keep the Billions. Good for the State. Pat Bauer is no longer the Majority or Minority Leader of the House. Good for the State. Anyway you look at this, the State received billions of dollars for an assett the taxpayers were subsidizing, the State does not have to pay to maintain the road for 70 years. I am having trouble seeing the downside.

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