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Mike Freeman: Taxes
By Karen Boothe
August 6, 1998
Click for audio RealAudio 2.0 14.4
Part of Election '98

MIKE FREEMAN SAYS THE STATE SALES TAX is surprisingly progressive.

Freeman: Because we don't tax food or clothing, and significant parts of the sales tax collection is done from items that people will purchase during better times - a new washer, a new dryer, a new hot water heater, a new car, new furniture items. Not to suggest they're not important, but if in bad times, you're going to sit on that bad sofa for a couple more years. You have to buy food and clothing for your family every day.
As for the state's income tax?

Sure, he says, people will complain about it, but he plans to make up for it by proposing a reduction in the property tax. He says as he campaigns around the state, it's the tax more people complain about than any other. He understands why, calling it the state's most regressive tax.

Freeman: It's a tax based least on the ability to pay. You pay income tax if you have a job, but if you lose your job you don't pay income tax. But if you still own your home, you still have to pay that property tax.
That's why the central component to his tax plan is a proposal to permanently cut property taxes by 20 percent, but capping it at $1000. Freeman calls rebates, like those the legislature offered in 1997 and 1998, temporary relief. That's not only complicated by red tape, but more costly to administer. He says that in the last seven years the business share of property taxes has decreased by 15 percent, while residential property taxes have increased by 28 percent.
Freeman: And what we need to do is to make sure that the kind of tax relief we give to businesses on property tax we also give to homeowners.
To off-set educational funding from reduced property taxes, Freeman hikes the state's contribution for K-12 education to 70 percent - up from the 60 percent the state pays now.

Freeman pays for the tax cuts by using current and future state surpluses. He denies that if the economy suffers a downtown, the tax cuts will force the state to cut services or increase taxes again. He says any adjustments will be made in the size of government.

But experts warn candidates against getting too comfortable with making promises. As one put it, "It's really too good to be true."