Okay, so I have this idea about how a school district or local government could raise a bit of extra revenue. I have no idea whether the tax code would allow it or not; that's for the lawyers to decide.
Basically it goes like this:
Right now your average consumer is strapped for cash, and would pay 20% or higher on an unsecured loan. Yet property taxes are payable all at once each year. On the other hand, governmental entities collect all this money at once, and end up spending it slowly over the course of a year. All of this money sits in bank accounts earning much less than 1% per year in interest.
My idea is to offer taxpayers an "amnesty" of sorts when taxes come due. Basically, the governmental entity would waive penalties and let the taxpayer defer paying the taxes without penalty. You'd charge a 12% annual rate (1% per month) on the outstanding balance, and allow it to be paid out within 8 - 10 months. As long as the taxpayer pays the bill completely within that timeframe, they pay no penalty and are not judged to be in arrears. If they miss it, then all penalties apply.
This way, the governmental entity earns much more interest, and in a win-win situation, the consumer pays much less interest than they would if they had to borrow the money to pay the bill.
Of course, there would be some cost to implement such a program, and state law may not allow it. But if it could be worked out, I think it would be a good idea. Maybe it's only a drop in the bucket though. |
