Plus, most businesses can't get their returns done by April 15 anyway. Where I work, we start working on our tax returns on January 1 (actually, we work all year, providing information to our accountant and answering questions on a bi-monthly basis). Due to the complexity of the tax code and our specific situation, it is impossible (I am not exaggerating) to complete our returns by April 15. Once we grew beyond a certain size, the interest tracing (an arcane accounting thing that I'm pretty sure most companies to whom it applies don't even bother doing) alone was enough to put us on extension. Extension now means October 15, so if we were getting a refund (ha ha), it would be just in time for Christmas.

Also, extending the deadline would (hopefully) give tax preparer accountants a more balanced working season (instead of working flat out for three months and then a little bit here and there the rest of the year). Of course, there would still be loads of last minute filers no matter what the date.

"directed toward the common good"?

Isn't that what our president told us, that if we wanted to serve our country after 9/11, it was our duty to shop?

Let's see. Retailers operate in the red from 1/1 to Thanksgiving Day. For all those months, they are paying their landlords for the use of a choice spot downtown (probably a local landlord, though he may have long ago retired to Florida on his "earnings") or in the mall (the landlord is probably an absentee REIT and its shareholders, who also don't spend much locally), and paying a skeleton staff of retail employees a wage that it is tough to live on.

That Friday, the consumer demand kicks in, under the guise of buying suitable presents for others to be exchanged in December. That's why they call the day after Thanksgiving Black Friday -- retailers start to operate in the black. They take on more staff, who need the jobs in order to have the cash to be able to buy gifts for others (and, perhaps not so incidentally, themselves) during this 5-week buying fest.

Suppose we shifted the tax base, so that instead of the landlords (local, once-local or absentee) pocketing all that rent for their well-located spaces, and paying some portion of it to the commons in income taxes once a year, the owners of those buildings in choice places paid to the commons, in the form of a property tax that was a function of the site value -- not the building, but the location -- all year round, just the way the rent comes in.

That way, the absentees wouldn't be collecting what is mostly locational rent and spending it, wherever they live on it, but recycling those funds locally, where they could be used to fund local efforts.

If we did that, most of us would probably be better off.

Maybe if we didn't go into debt with December spending, we'd all be better off, too. Maybe if we knew that our loved ones' real needs were being met, we wouldn't be spending huge amounts on items that they might or might not want or need. Maybe.

Dawn,

I grew up in the area (my senior prom was at KofP, next to Gimbels and, IIRC, E.J. Korvettes -- does that date me?)

Local income taxes are a terrible thing, as I'm sure you know. Philadelphia's is responsible for many of Philly's worst problems, and for the urban sprawl that extends way out into Chester County. I see signs that Philly may finally be ready to eliminate it, and tax what they SHOULD tax, the land value. Not one lot will cross City Line Avenue or the Delaware River. But the jobs leave, and the residents leave, because of that foul wage tax. Look what they've had to do to 202, and listen to the traffic reports of the sprawl that extends well into western Chester County. Argh!

Without knowing specifics about the owner of KofP, let me make a couple of comments. First, properties like that are usually underassessed. Local government does not want to get sued by deep-pockets corporations, and will just underassess the properties. This means that residential property owners end up paying more than their fair share of the local tax burden.

Commercial assessment is often done not on the basis of the value of the land plus the depreciated value of the improvements, but on the income it is producing in its current use. Is a store empty? Tell the assessor, and he'll lower the assessment a bit.

I agree that KofP is generally very well developed, and I don't recall seeing empty stores when I've been there. So retailers must be willing to pay the rent the owners are asking. And I agree that it is beautifully maintained, which is not inexpensive.

KofP Mall is on valuable land. It is valuable because it is where the Schuylkill Expressway meets the PA Turnpike, and because US 202 also passes through, and the Blue Route is not far away. Taxpayers have paid for all those roads. Maybe not local taxpayers, necessarily -- I'm guessing a lot of the money for those roads was federal, through earmarks and pork. Those interchanges have been expanded, the roads widened. This allows people to come from further and further to shop at KofP.

Pennsylvania has an interesting property tax option that other states don't. For about 90 years, there has been the enabling legislation that allows municipalities to tax land value and buildings at different millage rates. I think this is both smart and just. Harrisburg has been using it for at least 20 years, and is thriving, with its former boarded up storefronts gone and replaced with businesses and residences. 17 or so towns and cities are using it. Some tax land values at 6 times the millage rate they use on buildings!

Under such a set up, KofP Mall could be taxed not for the improvements, but for the land value. In other words, to the extent that its owner upgrades and expands it, they should not be taxed on the capital they put into it, or, alternatively, be taxed at a lower millage rate. Why penalize them for making good use of a good location -- they're creating jobs and prosperity. But, on the flip side, they should be charged a tax on the value of the land they occupy.

And every time they improve the mall in some way that draws more people to KofP, the value of the land that the surrounding businesses are on increases: they get more traffic, more potential customers. Some of them will not be able to afford to stay, and will be replaced by more intensive uses of those awesomely prime locations. That makes good use of the infrastructure that we-the-taxpayers are paying for, instead of developing more infrastructure at the fringe -- say, Coatesville.

The REIT's offices may be local. That's certainly good, and it may very well be a good part of why that mall is so appealing, unlike the one in my town, which is having a tough time. (There is an old saw that goes something like "the best fertilizer for soil is the shadow of its owner.")

But are the shareholders local, spending their gains locally, or are they in Florida, or London, or Dubai, where little of their profits (a portion of which come from the value of that site, that location, made valuable by publicly-funded infrastructure) will benefit the tri-county area?

That land-rent revenue should be recycled locally, not dissipated to wherever rich folks happen to live, and not pocketed by rich folks as if they had created the land and built the roads themselves.

And this gets at my big issue with the Dubai ports deal: aside from the security issues, what such deals mean is that the rent from those unique sites -- the profits from our ports, served by our roads and our railroads and our dredging and our Coast Guard, are leaving the local area, leaving the US. That horse was out of the gate a long time ago, not with the recent P&O transaction.

But if we-the-people collected the rental value of the land, as our common treasure, we could lower or even eliminate the income taxes and sales taxes that prey on us!

Dawn, this is much longer than I planned -- sorry for the wandering rant!

lvtfan

http://www.wealthandwant.com ... if you'd like to see an end to poverty