Most people dislike taxes. Their discomfort level, though, depends on the type of tax being collected.
Sales taxes are relatively popular. They’re incremental — collected by the nickel or dime on most purchases. You pay the tax only when you buy something. And they’re easy to understand. The next time you make a purchase, look at the receipt. The sales tax is on there.
Sure, sales taxes hurt the poor, particularly when they’re collected on essentials like food and medicine. And on big purchases like cars or boats, they can sting. But given a choice, most taxpayers opt for sales levies over other ways of raising public money.
Income taxes are next on the popularity scale. They’re typically withheld from paychecks, making them a bit easier to swallow. They’re complicated, of course, and sometimes yield absurd results — two people earning roughly similar amounts can pay dramatically different tax bills — but the concept of paying a percentage of your income in taxes seems pretty simple, and fair.
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That leaves property taxes, which are loathed. They require advanced mathematical skills to understand. They’re sometimes paid in a lump sum. Mostly, though, people hate property taxes because they’re based on a guess — an estimate what your home or business is worth.
This seems vaguely ridiculous. Imagine a cashier guessing the value of your purchase and taxing you accordingly, or the state using an estimate of your income to levy a tax. We’d reject either approach out of hand. Yet it happens at the property tax window every year.
In most cases, a poor estimate of the value of a home or business only slightly affects a property tax bill. Sometimes, though, a missed guess can mean hundreds of thousands of dollars in higher, or lower, tax revenue.
Which brings us to the Country Club Plaza.
When news broke last week that Highwoods Properties wanted to sell the Plaza, The Star did a quick search of county property tax records. The company’s Kansas City holdings were valued at $166 million, give or take.
Does that seem significantly low? If it is, it would mean the Plaza has received hundreds of thousands of dollars in tax relief over the years, based not on a vote or a public decision but on the bad guess of the appraiser.
The opposite is also true. If the Plaza has been overvalued, the bill has been too high. In either case, the fundamental unfairness of the property tax is clear: The levy is a percentage of a guess.
Which is why taxpayers dislike it so. It’s also why we have a right to know what the final Plaza purchase price is — to figure out, for ourselves, if the appraisal process has been fair.