Tax laws need a wrench, not hammer

Nevada's property-tax laws could use some fixing, but the proposal launched last week by Sharron Angle and Don Gustavson would take a hammer to a problem that requires a precision wrench instead.

Fortunately, the initiative petition the Northern Nevada Republicans are circulating stands a small chance of actually getting on the November ballot. And if people look closely at the proposal, they won't jump on this "let's cut taxes" bandwagon.

First, give credit to Gustavson and Angle for putting forth a serious tax-cutting proposal. They believe strongly in the issue, and it's not enough to simply wax philosophical without some specific plan of action.

This plan, though, has some flaws. Start with the fact that property taxes are not the most troublesome burden for most people in Nevada, and some local governments - school districts being the most important - depend heavily upon them. Although there's no clear picture yet on how much property-tax revenues would be decreased by the initiative, one estimate puts it in the $200 million range.

Angle and Gustavson would freeze the tax rate at 1 percent of the assessed value based on the 2001-2002 tax year. They would allow no more than a 2 percent increase in tax bills a year. While it may be nice to turn back the clock, the net effect of ignoring fast-rising real-estate values would be to create widening disparities in the tax burden.

That doesn't help people such as Lake Tahoe residents, where real-estate values have risen so much that property taxes are unbearable to any but the rich. But that problem needs to handled by controlling local levies, not by a statewide freeze.

In Carson City, for example, of $28 million in property tax only $1.8 million goes to the state. The rest is local government.

One area where Nevada's property-tax code needs changing is the 1.5 percent depreciation on homes. It's a nice benefit, but over the years it spreads an unequal burden on newer homes while allowing older homes to pay a smaller share of property taxes.

Gradually lowering the depreciation percentage wouldn't raise taxes for anyone - but it would tend to even out the load. That's the kind of tinkering appropriate for the state's tax laws.