Third Party & Independents Archives

March 08, 2006

Property Taxes. Only 1 fair solution.

Politicians know it, but, they don’t appear to want you to. Millions of poor and retired Americans have been losing their homes due to market fluctuations pricing their property taxes out of their reach, over recent years. Property tax valuation has zoomed past the national inflation rate due to developer hyperinflation (as much as 1000% markup) and rural development expansion. This is important because retiree’s income is cost of living adjusted in many cases.

When their property taxes inflate 50% or even 100% in some cases and their fixed income increases only 2 or 3%, the home they worked their whole lives for, to see them through old age, is foreclosed on for non-payment of property taxes. RealtyTrac, the leading online marketplace for foreclosure properties reported: “Overall U.S. foreclosure numbers climbed steadily over the course of the year [2005], with more new foreclosures reported in every quarter,” said James J. Saccacio, chief executive officer of RealtyTrac. “This trend appears to be moving the real estate foreclosure market back to its historic levels.”

There is one fair policy which state and local governments could install that would end this dumping of America's poor and retired onto the streets, but politicians are trying to keep it a secret. The policy is the essence of simplicity. The Fair Policy would simply state that property valuation for retired homeowners shall not increase in any given year more than the national inflation rate.

When that retired homeowner passes away, the property valuation may revert to market valuation in the year following the retiree's passing. The same policy could be installed for below poverty heads of households homeowners, where the valuation would keep pace with national inflation rate until the head of household puts the house up for sale, exceeds the 1.5 times the poverty income level, or passes away. It just makes sense for a compassionate America which sends billions of dollars to foreign peoples who lack shelter. So, why are our politicians hiding this obvious solution? Could it be that cutting taxes for wealthy donors is the limit of their interest in cutting taxes?

Call them, and tell them, the cat's out of the bag, and this fair policy must be installed in your state. One day, it could well be you being foreclosed upon.

Posted by David R. Remer at March 8, 2006 08:21 AM
Comments
Comment #132062

David

It is a tough problem but I think the devil is in the details.

Not all retirees are poor and if we set some kind of income test we will end up with the equivalent of rent control. People won’t move and housing stocks will decline.

Retired people’s needs are different. I live near a metro that takes me to work every morning. When I retire, I will probably move to a cheaper location. The metro is useful to a retired person too, but since I will use it less I will make the choice based on the costs. If you “grandfather” me in, I can hold onto this prime real estate just because I got here first and didn’t move. A young couple might need the amenities more.

Beyond that, you law would actually penalize an old guy for moving. If his property taxes have gone up only with inflation, he could be paying very low taxes after a while. Even a less expensive smaller house might have higher taxes, so he does not move. He stays in a big house near a metro. It made sense when he worked every day and had kids but now he would be better off with a smaller place better for a retired couple.

Posted by: Jack at March 8, 2006 09:03 AM
Comment #132079

Jack, your argument appears to make no sense. You said: “If his property taxes have gone up only with inflation, he could be paying very low taxes after a while. Even a less expensive smaller house might have higher taxes, so he does not move.”

If the smaller house is less expensive, then he can afford higher taxes. If he owns his own home outright, and sells it, he has the proceeds of the home sale to make mortgage payments on a new house that is less expensive and afford the higher taxes.

The policy I propose in no way harms the retirees who own their own homes outright, and can afford to remain there if property taxes only go up at the national inflation rate. The policy as it stands FORCES them to sell into an inflated market they cannot afford and higher taxes in one fell swoop.

Sorry, your argument just does not hold up.

Posted by: David R. Remer at March 8, 2006 09:51 AM
Comment #132091

David,

If you’re on a fixed income, and the property taxes increase in your neighborhood by 50-100% or more, it’s time to move. Don’t expect to retire in the middle of developing land. If the land around your home is being bought up by commercial interests, read the writing on the wall, sell your house, and move someplace you can afford.

If a retiree actually OWNS his home (unlike the rest of us “homeowners” who live in houses owned by a bank somewhere), then he probably has enough money (in equity, if nothing else) to handle the difference. If not, then he’s making a monthly mortgage payment that he could just as easily use as rent on an apartment. So he’s not in danger of becoming homeless.

Most people I know live in apartments, because they don’t have the income necessary to buy a home. They have more things to concern themselves with than the plight of the helpless homeowner. If you actually own real estate, you have no business calling yourself poor and begging for government help.

Posted by: Rob Cottrell at March 8, 2006 10:26 AM
Comment #132107

Better yet, eliminate all state, local, and county property tax and sales tax, and implement a flat rate income tax.

Why? Because property tax is unfair since some people may have little or no income (only living on savings or Social Security), and some people with a lot of income live modestly, and pay little property tax.

Property tax and sales taxes hammers the poor and less wealthy, and the property tax that wealthy pay in no reflects a fair percentage based on income.

So, if the question (i.e. the goal) of fair taxation is to ensure everyone pays the same (percentage rate) based on income, then why tax property and sales?

Also, taxing property hits the elderly.
That’s why they are forced to sell their homes and downsize. They can’t afford the property tax.

Currently, my property tax is $310 per month, and rising, and payable every year (and that’s with the homestead exemption). Property tax is out of control in Texas. That’s the largest monthly expense. Larger than the electricity (that is also climbing sky high) and utilities combined.

An elimination of all property and sales taxes and replacing it with a flat rate tax percentage for federal, state, county/parish, and city is the fairest approach (with a low-income-poverty-level exemption), so that no one pays tax income tax as of 01-JAN , until their income exceeds the low-income-poverty-level exemption.

That would also save billions per year in time and money currently spent for tax accounting.

But, of course, no reforms of any kind are possible until voters finally feel the consequences of the neglect to stop voting for irresponsible incumbents, and start voting for newcomers that want badly-needed, common-sense, no-brainer reforms.

Posted by: d.a.n at March 8, 2006 11:22 AM
Comment #132125

This is nothing but a somewhat “covert” way to implement “emminent domain.”
While I totally disagree with the tired “taxcuts for the wealthy” and “protecting the wealthy” lines of BS, I am in complete agreement with your following statement: “The Fair Policy would simply state that property valuation for retired homeowners shall not increase in any given year more than the national inflation rate.”

Posted by: kctim at March 8, 2006 12:20 PM
Comment #132141

Good lord, give me the strength!
Maybe this is a local issue. I live in a Proposition 2.5% area so net local taxation can’t increase by more than 2.5% per year without an override. Let’s review:
As property values went up much more than 2.5%/year, tax rates/$1k went down. As older properties with low assesed values were sold as people retired, new homes with much higher valuations were constructed, and tax collections increased. Since those older homeowners with fixed incomes live in lower valued homes their net tax increase was reduced by the shift in home value, not the other way around. In fact, they are affected far more by increased medical costs than by less-than-or-equal-to 2.5% property tax increases. And despite maybe not wanting to move, their profits on the sale of their homes ensures a comfortable retirement in a lower priced state.

Posted by: Dave at March 8, 2006 01:01 PM
Comment #132143

I’d be curious to know what the time-of-ownership was on the foreclosures. E.g. Is it mostly new purchases of recently devalued properties or other secondary causes?

Posted by: Dave at March 8, 2006 01:05 PM
Comment #132156
Maybe this is a local issue. I live in a Proposition 2.5% area so net local taxation can’t increase by more than 2.5% per year without an override

Yes, it is a local issue.
My county has a 10% cap, but that’s a big jump !
My property taxes jumped sky high with 4 consecutive years of 10% increases before it fell below the 10% increase per year. But it is still climbing, and my wife and I are thinking about building a barn (nice on the inside) in the country reduce taxes. A barn in the country would reduce property taxes by 80% .

But, that’s the sort of crap people resort to when there are oppressive taxes. Any type of proprety or sales tax is oppressive.

In Ireland, people used to burn the roofs off of all castles on their proprety, because they were taxed on all square feet with a roof. Never mind that it is a ruin.

Like I said, my $310 per month is a lot of property tax on an ordinary, middle-class house sitting on a measley one-fifth of an acre.

Property tax and sales tax hammers the poor and less wealthy, just like our abused tax system does, since it lets the wealthy abuse all sorts of tax loop holes and deductions.

The tax system is widening the gap between the 1% of the wealthiest of the population who have 40% of all wealth. I don’t have anything against the wealthy. That’s not the issue at all. The issue is unfair taxation. If income is taxed the same, and there is a low-or-poverty level examption, there is no reason to not tax all income at the same, fair income tax rate. 17% for the federal income tax should be more than enough. 1% or 2% for county, 1% or 2% for city, and 1% or 2% for state are more than enough.

Why should elderly people be perpetually taxed on the house they already own, when they have little or no income ?

Property tax and sales tax are very unfair taxes.

Of course we need some taxes. Government and law enforcement can’t operate without some funding. But, we could easily replace hundreds of different taxes with only 4 types of tax:

(1) federal income tax: 17%
(2) state income tax: 1%
(3) county/parish tax: 2% (for public school)
(4) city tax: 1%

Eliminate all other types of tax.

And, after Social Security and Medicare are eventually reformed, the federal income tax of 17% could be reduced by up to 6% .

Posted by: d.a.n at March 8, 2006 01:43 PM
Comment #132162

Foreclosures are very high in my county, and surrounding counties, and is climbing.
They are at an all time high since 1989.
My county has seen a 40% jump in the last 12 months. Some surrounding counties are seeing increases as high as 80%.

Also, foreclosures nationwide are rising, and have been for the last 13 consecutive months.

Like I said, the poor-to-middle class get hammered by our oppressive, abused, unfair tax systems.

All of these factors might be telling us something.

Recsssions come and go, but it’s not hard seeing the next one being worse than usual.

Posted by: d.a.n at March 8, 2006 01:49 PM
Comment #132173

d.a.n,

(3) county/parish tax: 2% (for public school)

The biggest problem with public schools is that they’re tied to local taxes. Wealthy communities get good public schools, while poor communities get bad public schools. Public school funding should be collected at a State level and apportioned appropriately on a per-student basis.

Out of curiosity, why do you consider sales taxes unfair?

Posted by: Rob Cottrell at March 8, 2006 02:28 PM
Comment #132181
The biggest problem with public schools is that they’re tied to local taxes. Wealthy communities get good public schools, while poor communities get bad public schools. Public school funding should be collected at a State level and apportioned appropriately on a per-student basis. Out of curiosity, why do you consider sales taxes unfair? Posted by: Rob Cottrell at March 8, 2006 02:28 PM

Currently, my state pays for a big chunk of school budgets. The extra comes from local taxes. Are you saying that localities should be prohibited from contributing to their schools? Or are you suggesting that state taxes be increased to pay for more money to all schools? What ever happened to “No Child Left Behind” anyway?

I do agree with your question about sales tax. In my state food and clothing below $300(?) is not taxed (since everyone needs cloths and food). It seems the ultimate in fairness, basically a consumption tax. The more money you spend on extras, the more you pay!

Posted by: Dave at March 8, 2006 03:01 PM
Comment #132190

Dave,

Currently, my state pays for a big chunk of school budgets. The extra comes from local taxes. Are you saying that localities should be prohibited from contributing to their schools? Or are you suggesting that state taxes be increased to pay for more money to all schools? What ever happened to “No Child Left Behind” anyway?

I support raising state taxes in order to provide more money to all schools. Otherwise, you get what we have now — the people who need the education the most are getting the least.

As for “No Child Left Behind”, it was a bad idea to begin with, and was never funded enough to do what it was supposed to do. Bottom line - the Federal Government should stay out of the education business. Education should be a state-level function.

As for the fairness of sales taxes vs. other taxes, I don’t think I really want a “fair” tax system. Giving tax breaks to the poor isn’t fair — it’s merciful. There’s a difference.

Personally, I prefer sales taxes to income taxes, because they reward earning and saving, while punishing deficit-spending.

The biggest problem with the income tax (as it currently exists) is the MASSIVE amount of bookkeeping and paperwork required for the system to function. Because your tax on each paycheck will vary depending on how much your total earnings are, you can’t pay the tax at the time of accrual — you can only pay an “estimated” tax. Then you have to file at the end of the year and balance things out. It’s terribly inefficient.

Posted by: Rob Cottrell at March 8, 2006 03:33 PM
Comment #132195
d.a.n, (3) county/parish tax: 2% (for public school) The biggest problem with public schools is that they’re tied to local taxes. Wealthy communities get good public schools, while poor communities get bad public schools. Public school funding should be collected at a State level and apportioned appropriately on a per-student basis.
Then poor states get better schools than rich states. But, you don’t want the federal government doing this tax too do you? But, either way, State or County is better than federal government collected tax for public school.
Out of curiosity, why do you consider sales taxes unfair?

A sales tax makes it nearly impossible to tax income equally. Even an allowance (as proposed by the FairTax (which is 23% exclusive or 30% inclusive)) can’t easily prove income is taxed about the same.

So, if most people want to know that people’s income is taxed the same, why not keep it tied to income so that it is easier to determine? Also, the income tax is already in place at the federal level.

But, any tax system needs to get rid of the ridiculous loop holes and deductions. Those help the wealthy pay less tax. I hear a lot of wealthy people bragging that they pay a smaller percentage of income than most of the rest of us do.

But, this type of reform, and all others are hopeless until voters feel sufficient pain to do something about corrupt and oppressive government.

Yes, things here are not as bad as some other nations, but that’s not a good excuse for being worse.

Posted by: d.a.n at March 8, 2006 03:42 PM
Comment #132198
Savid wrote: There is one fair policy which state and local governments could install that would end this dumping of America’s poor and retired onto the streets, but politicians are trying to keep it a secret. The policy is the essence of simplicity. The Fair Policy would simply state that property valuation for retired homeowners shall not increase in any given year more than the national inflation rate.

Yes, David, you are correct. The least they could do is what you suggest. Cap increases to the national inflation rate.

But, I would still prefer to see all property taxes abolished. Why should anyone be taxed on what they already own? That is double, triple, quadruple, …. , N-tuple taxation, for as long as you own property. I’ve already had to shell out over $30K (in 2006 dollars) in the last 10 years, and I live in an average 22 year old house on a measely fifth of an acre.

To me, raising my property taxes by $800 a year is property tax harassment. I’d like to beat the %$#!+! out of the good-for-nothin’ , bought-and-paid-for politicians that keep raisin’ my property taxes. It’s ridiculous. In 5 years, the value of my fifth acre (in Texas) alone has gone for a valuation of $10K to $32K. What a crock. That is why I am seriously thinking of building a barn in the country to live in. I don’t care if it looks like a barn, as long as it gets my property taxes lower. I know someone who did that. They built a metal barn, and finished out the inside nice, and it sits on 30 acres, and their taxes are only $700 per year (compared to my $3800 per year).

My grandmother and grandfather had to downsize after they retired just to reduce their property tax burden (on land and house they already owned).

It won’t be long before we have a poll tax too.

Posted by: d.a.n at March 8, 2006 03:57 PM
Comment #132229

D.a.n, but preferring to end the taxes raises the issue of how schools are to be funded. With the utter and complete breakdown in bipartisanship, no other funding mechanism for schools is possible. While I believe in national school standards for student performance on reading, writing, math, and U.S.history, I strongly oppose a national educational system. That will lead to wholesale population brainwashing. Education needs to remain the state’s providence, and let’s face it, property taxes are the only game in town unless one wants to entertain the far right concept of each family pays for education themselves according to their income (vouchers being a mid-wife to getting there).

Posted by: David R. Remer at March 8, 2006 05:56 PM
Comment #132233

I always have an urge to respond although sometimes I shouldn’t.
I’m in favor of the consumption tax. With food excluded. A 5% tax on a 20$ coat in a modest community and a 5% tax on a 2000$ coat in an affluent community raise substantially different sums of money. It’s all suppose to pay for the same government.

Also you have to remember that an income tax will tax the gross income and when that money purchased a commodity it is taxed again.

Income should not be taxed. What better way to promote savings?

An employer pays maybe 1.50$ or 2$ for every 1$ that goes to the employee. Just give it all to the employee.

Supply and demand will generate all the money a constitutional government needs.

repeal the 16th ammendment. Reinstate the original articles that fund the federal government.

All the other stuff goes to the state.


Posted by: Weary Willie at March 8, 2006 06:04 PM
Comment #132258
D.a.n, but preferring to end the taxes raises the issue of how schools are to be funded. With the utter and complete breakdown in bipartisanship, no other funding mechanism for schools is possible. While I believe in national school standards for student performance on reading, writing, math, and U.S.history, I strongly oppose a national educational system.

David,
Oh, I don’t mean to end sales or property tax. I mean they should be replaced with a flat tax. It can be either a state, county/parrish, or city income tax that funds public school. I believe public school is a good thing. I just don’t think property taxes is the right way to do it.

Posted by: d.a.n at March 8, 2006 08:05 PM
Comment #132265

“I always have an urge to respond although sometimes I shouldn’t. “

i can relate.

regardless, i would propose a net worth cap, adjusted for inflation. no individual needs billions of dollars. tying that kind of wealth up simply starves the economy. if no individual is allowed to attain that amount, then the capital is forced to circulate. incentive remains intact, unlike with socialist models. this stimulates investment, disperses the wealth, and would also make a lot of current laws unnecessary and obsolete.

the effects of such a policy may potentially address a vast array of other problems indirectly, as well. naturally, this proposal does not address the tax question, per se - however, there would be a lot less confrontation over who should shoulder the brunt of the cost of government, as the gap between richest and poorest would be far less pronounced (depending on where the cap is set).

wealth is ever-increasing, yet it remains a zero-sum game. for every dollar you stuff away in savings, that’s one less dollar i can earn.

Posted by: diogenes (i) at March 8, 2006 08:29 PM
Comment #132266

In Ireland, people used to burn the roofs off of all castles on their proprety, because they were taxed on all square feet with a roof. Never mind that it is a ruin.

Posted by: d.a.n at March 8, 2006 01:43 PM

Well danny boy, i’m pleased to advise that there is now no, repeat NO, nada, zilch, nyet zero residential property tax in Ireland. At the time of purchase there may be a stamp duty and at the time of disposal there will be a capital gains tax on non principal private residence, but apart from that, NOTHING! Ya feelin green?

Posted by: Paul in Euroland at March 8, 2006 08:30 PM
Comment #132278

Paul,
Really? Yeah! I think I am feelin’ green.
My wife’s entire family and my family too came from Ireland (ummm….a few from England (sorry), and Scotland too). Maybe Ireland would let a couple of engineers immigrate to Ireland? I have to tell ya somethin’ Paul. This country really ain’t what it used to be. Not even close. Sorry. I’ll probably be fire bombed before the week is out… but this country is in serious decline, and I’m more and more skeptical that it can stop that decline. In fact, it’s lookin’ somewhat likely that the next recession may turn into the next great depression. It’s not hard to fathom at all.

Education has a lot to do with it….something this country doesn’t place much importance on any more. We don’t graduate many engineers any more. Instead, we graduate a lot of …. guess ? If you can complete that sentence, then you know exactly what I’m talkin’ about.

I realize it is a cycle, but these cycles last for many, many, decades before (if ever) reforms and improvements come about.

Posted by: d.a.n at March 8, 2006 09:25 PM
Comment #132279

d.a.n,

A sales tax makes it nearly impossible to tax income equally. Even an allowance (as proposed by the FairTax (which is 23% exclusive or 30% inclusive)) can’t easily prove income is taxed about the same.

Likewise, an income tax makes it nearly impossible to tax spending equally. You assume that “taxing income equally” is the only way to tax fairly. Why is that more fair than “taxing spending equally” or “taxing property equally”?

Taxes have to be collected at some point. You can collect them on what we earn, what we spend, or what we have. Any of them can work if done properly. But our current income tax law is horrible. You’re collecting taxes on my income now, but you can’t tell me how much I owe on that income until the end of the year — it’s insane!

Add corporate taxes into the mix, and things get even uglier. Personally, I think we should drop all corporate taxes and just tax the people directly. The cost of the corporate taxes just gets handed down to us through higher prices anyway, so why not cut out the middle-man? That way, We The People will be able to see on a daily basis just how much of our money is going to our Government.

Posted by: Rob Cottrell at March 8, 2006 09:27 PM
Comment #132285
Add corporate taxes into the mix, and things get even uglier. Personally, I think we should drop all corporate taxes and just tax the people directly.

I agree with that. Abolish corporate taxes.
But income tax (not perfect) is the best way to tax without hammering the poor or less wealthy.
The wealthy know all about this.
This is the one thing they hope voters will never understand.
If you want income to be taxed fairly, tax income equally (e.g. the same flat percentage rate).

Here is a summary of the tax system I prefer.
It is simple and fair.

But, no such reforms will ever occur until voters suffer enough pain to be motivated to insist upon them. Even then, the chances of reforms are unlikely. Americans don’t know, and don’t want to know how it all works. That is why politicians use and abuse them, and say “voters get what they deserve”. I actually agree with that. Voters are stewed tomatoes. They’re more interested in just about anything on the opposite end of the spectrum. Only when their negligence creates considerable pain will they perhaps decide to pay any attention to the pressing problems facing the nation.

Posted by: d.a.n at March 8, 2006 09:43 PM
Comment #132307

David,
What’s wrong with just flat doing away with property taxes altogether? You’ve paid for the property once to get it. Why should you have to keep paying for it to keep it?
I know that’ll never happen as long as there are those that think that just because someone owns something that they should be punished for having it while someone else doesn’t.
But sense we’re stuck with it, it shouldn’t be increased until the property is sold. Regardless if the owner is retired or not.

Posted by: Ron Brown at March 8, 2006 10:51 PM
Comment #132349

Ron, I have yet to meet a single person who thinks that someone who owns something should be punished for having it. This hyperbole does not fairly or accurately represent the view of those, ALL THOSE, who know that society can’t be run for free, and government can’t be run for free, and education is not free, never has been.

Now your last sentence is the one I have been waiting for someone to say since this article was published. I agree wholeheartedly, once you have bought your property, taxes should be either constant from the day you bought it, or at the very least limited to the rate of inflation for the economy, for everyone, until the deeded owners sell, or die. The idea that school systems should become wasteful with windfalls in tax bases created by thieving developers who take 1000% markup on the land for development, while all taxpayers must suffer for it, is abominably bad policy in my mind.

I have been an advocate for a flat tax for years now. It is the only tax reform that will meet with a majority of the public’s views of fairness. Sales tax can be made fair if investment earnings are taxed, otherwise, it becomes an immensely unfair regressive tax. But, at the state and federal level, a flat tax on income from 1.5 times the poverty rate through to the top, food and necessary medical expenses being the only 2 exemptions, appears to me to be the fairest possible means of funding government.

Posted by: David R. Remer at March 9, 2006 01:35 AM
Comment #132369

David,

Sales tax can be made fair if investment earnings are taxed, otherwise, it becomes an immensely unfair regressive tax.

I’m not sure I understand where you’re going with this. If investment earnings are taxed, then you’re taxing that money twice — once when it’s earned, and once when it’s spent. How does this make the system more fair? Or is there something I’m overlooking here?

Posted by: Rob Cottrell at March 9, 2006 07:47 AM
Comment #132371

Ron Brown,

Property tax isn’t “punishing” people for having property. When it’s used for things like police and fire protection, it’s really just requiring them to pay the upkeep cost of the property. The more property you own, the more benefit you get from such services.

I’ve often thought that the US military should be funded through a federal property tax. It’s probably not the most economical solution, but there’s a certain logic to it. You pay the government to defend your stuff. The more stuff you have, the more you pay.

Posted by: Rob Cottrell at March 9, 2006 08:18 AM
Comment #132375

Yes, if we’re stuck with property tax, it should be allowed to grow 10% per year like mine did, jumping $800 per year for 4 consecutive years. Ouch! And, if you’re retired…it’s a terrible burden. Hence, older Americans are often forced to downsize. It’s outright oppression.

All that is needed and would be more fair is a flat income tax, a poverty level exemption, no sales taxes, no property taxes, no corporate taxes, no tax on Social Security and Medicare:

(1) federal flat income tax: 17%
(2) state flat income tax: 1%
(3) county/parish flat tax: 2% (for public school)
(4) city flat tax: 1%

Eliminate all other types of tax, all loop holes, all deductions.

That would be most fair, very simple, and would not hammer the poor or those with very low income.

I loathe property tax. It is oppressive.
Of course government needs taxes.
Taxing all individual income (including investment income, earned income, etc.) the same flat rate is the most fair system.

Of course, I’m dreamin’ .
It’s not likely to ever happen.
Not while the tax system benefits the wealthy.
It took them a long time to pervert the tax system to what it is now, and they’re not likely to give it up.

No reforms are possible until voters suffer enough pain of their own negligence. Only then will they do something (maybe), and then it is always too late.

Property tax is the largest monthly bill that we have now, except for medical insurance. Bloated government continues to grow more and more oppressive every year.

I was not kidding when I said I’m going to build a barn to live in. The tax appraisal is low, because it looks like a barn, and most people don’t want to live in a barn. You can finish it out nice on the inside, but pay one fifth the tax. Fine by me. I don’t care what the outside of the house looks like.
___________________

BTW, did you notice that U.S. Senators recently rejected new controls on unethical conduct
A majority of the Senators on the Senate Homeland Security and Governmental Reform Committee rejected the Collins-Lieberman proposal to create an Office of Public Integrity in Congress?

The following voted against an Office of Public Integrity:
Senator Akaka (D-HI)
Senator Bennett (R-UT)
Senator Chafee (R-RI)
Senator Coburn (R-OK) (hypocrite)
Senator Coleman (R-MN)
Senator Dayton (D-MN)
Senator Domenici (R-NM)
Senator Pryor (D-AR)
Senator Stevens (R-AK) (that figures)
Senator Voinovich (R-OH)
Senator Warner (R-VA)

Posted by: d.a.n at March 9, 2006 08:58 AM
Comment #132381

Rob,

As for the fairness of sales taxes vs. other taxes, I don’t think I really want a “fair” tax system. Giving tax breaks to the poor isn’t fair — it’s merciful. There’s a difference.
I think this ignores the “marginal value” of money. Your first dollar is worth alot more than your 10 millionth. You can live without being a millionaire, you can’t live on $5k. BTW; the poor don’t get real tax breaks, they get the pretty much the same deductions everyone else does with very minor net differences. It’s just that those deductions seem like a lot more on the lower end of the pay scale. Posted by: Dave at March 9, 2006 09:32 AM
Comment #132398

Dave,

I’m not ignoring the “marginal value” of money. I’m just pointing out that we don’t really want a “fair” tax system. A system that doesn’t require a poor person to pay his or her “fair share” isn’t fair.

There are several aspects of life in civilized society that thankfully aren’t fair. Bankrupcy — letting people write off their debts because they can’t seem to figure out how to pay them — isn’t fair. Welfare — giving people food and housing because they can’t figure out how to get it themselves — isn’t fair. I’m not saying that these things are bad… just that they’re not “fair”. Thankfully, we live in a merciful society, and not a fair one.

Posted by: Rob Cottrell at March 9, 2006 10:40 AM
Comment #132410

I realize that Government has to have money to run. I just don’t think that what you own should be taxed.
You’ve paid tax on it when you bought it. You pay tax on it while you own it. And in some cases you pay tax on it when you sell. You also paid tax on the money you paid for it with. Makes you wonder if you really own anything.

I just got my property tax bill the other day. My tax has gone up $2500. When I called and asked why they said that due to road improvements in my area they had to levy a sir tax on my property.
What road improvements? I reckon the new pot holes are the improvements. I also don’t recall them holding an election for this sir tax.
They also claimed that due to the subdivision that went in up the road from me that my property is worth more. Five yuppies building houses by the river is a subdivision? They’re a pain in the ass, but hardly a subdivision.
Now, I can afford to pay the extra money. Don’t want to, but then I don’t really have a choice. But my neighbors up the road had their taxes go up too. By about $1550. This is an elderly couple that is on fixed income. They have a hard enough time making it as it is. The extra tax is going to kill them. I reckon unless some miracle happens the county will take the land and sell it for the taxes.
The sad thing is this property has been in his family sense around 1840.
If property tax was done away with altogether this wouldn’t be happening.

Posted by: Ron Brown at March 9, 2006 11:57 AM
Comment #132412

Rob Cottrell, enormous sums of investment money will never be spent. How do you think the wealthiest 1% of folks in this country accrue 15% of the nation’s entire annual income? Not by spending it. But, by loaning it out, which earns more money back. We saw this kind of concentration of wealth back in the 1920’s. And the outcome was the same as occured in Russia, France, Italy, Germany, and many other countries where massive national wealth was concentrated in the hands of just a few. Economic depression or revolution is the end result.

Posted by: David R. Remer at March 9, 2006 12:01 PM
Comment #132416

Rob, it isn’t the bankruptcy of the poor you need to worry about. The vast majority of those bankruptcies result from events the wage earner has no little to no control over. The bankruptcies you need to worry about are the Enron’s, GM’s, Delphi’s, Chrysler’s, Adelphia’s. Those bankruptcies do the nation and the economy far, way far more harm.

Debtor’s prisons are the alternative to bankruptcy. Where bankruptcy occurs due to the loss of a job, or unexpected massive medical bills, laws were not broken. Debtor’s prisons were an abomination in England and here for a short while. If you are concerned about our nation’s loss of wealth, you should be protesting the massive transfer of American wealth today overseas to foreign investors and nations. That is wealth that will not be recirculated in our economy if the foreign nation’s in the Asia-Pacific rim reach their potential for global marketplace dominance.

Posted by: David R. Remer at March 9, 2006 12:10 PM
Comment #132426

Ron Brown, you make a valid point about double and triple taxation on income. The huge hurdle with any tax scheme is dealing with the enormous and fundamental difference between poor and middle class income and asset wealth vs. wealthy individuals and corporate income and asset wealth. Working people can’t become monopolies, and 100% of their income is recycled back into the economy. This is fundamentally different from corporate and very wealthy person’s income, much of which is not recirculated and can, and will leave our nation entirely in search of better yields as the Asian-Pacific Rim begins to offer better competitive investment advantage.

Then there is the issue of capital wealth of corporations who consume immense national resources in their demand and need for top notch infrastructure expenditures and publicly funded R&D seed money like Bush is now handing out to the energy industries, not to mention their lobbying ability to shield themselves from obligations to sustain the cost of governance.

The point is, there is a fundamental qualitative difference between earned wages and investment principle and income. The former is 100% recycled through the economy, the latter only partially so as more and more of it ends up funding foreign nation’s competive advantage over the U.S. in the global marketplace through off-shore investments and international capital development from American dollars.

A flat tax or even sales tax does not acknowledge nor account for this fundamental difference. Accomodations for this difference must be made in any new tax system or the U.S. economy will bankrupt down the line in the face of the rise of the Asia Pacific rim’s global dominance in international economics.

While we waste our time and fiddle with abortion, the Asian Pacific Rim is focused on their domination of global economic domination throughout the latter half of this century and beyond. Two things policy makers should be focusing on in America as top priorities: 1) How to keep American dollars recirculating in the American economy and 2) how to compete with the Asian Pacific Rim while avoiding civil strife and conflict here in the U.S. due to steady erosion of quality of life for America’s workforce and their dependents. Oh, and 3) how to seriously curb the growing and already immense black and off-book marketplace in America. If the U.S. could come close to eliminating black markets and force cash only businesses back onto the books for tax purposes, we could come very close to ending deficits today without raising taxes or cutting spending.

Posted by: David R. Remer at March 9, 2006 12:34 PM
Comment #132430

Rob,
Maybe we agree here and perhaps it’s just that I equate “fair” with words like “compasion”, “considerate”, and “merciful”. Fair to me means including more than just numbers and percentages into the equation.

For your property tax problems, it sounds like you need a Prop 2 1/2.

Posted by: Dave at March 9, 2006 01:00 PM
Comment #132460

Courtesy of Christian Science Monitor:

In Orford, N.H., a tin-roofed hunting cabin worth $10,000 was recently assessed at $200,000, just for its mountain view. Taxes on the cabin and its outhouse skyrocketed.

Around Lake Tahoe, along the California-Nevada border, property taxes have shot up 135 percent in the past four years.

Residents of Beaufort, S.C., pay $17 million more in property taxes today than in 2000.

Posted by: David R. Remer at March 9, 2006 03:27 PM
Comment #132462

David,

NH has what’s called a “view” tax. If you knock down trees on your land and a make a view, your value goes up since that view is now an element of value to your property, no matter the structure placed on it. The land itself is probably worth $200k. Property tax is a major income source for the state. They have to do something to compensate for their lack of sales and income taxes and it is a controversial rule there.

Posted by: Dave at March 9, 2006 03:34 PM
Comment #132477

David R. Remer

I usually agree with you, but here you are fear-mongering. The taxpayer can dispute the assessed value, but I suspect it was the land, not the cabin that had that value. The argument that a person can’t afford his or her $1M home because of taxes is bogus. Reverse mortgages can easily handle the taxes and still retain most of the value of the house until death. This is a trumped-up issue to make it seem like property taxes are unfair. They aren’t.

Posted by: mental wimp at March 9, 2006 04:30 PM
Comment #132514

mental wimp, the reverse mortgage is a theft of inheritable assets from the elderly. You really should research it deeper. Tell me how the poor and the elderly are going to drive miles to a courthouse and contest the valuation before a board of government charged with such appeals. I went through that process at 48 years of age and some law courses in college, and I was intimidated by the process. And you expect the working poor and seniors of America to go through that process on an almost annual basis to fight a battle they will certainly lose without the new policy I proscribe?

Posted by: David R. Remer at March 9, 2006 06:17 PM
Comment #132552

Property taxes are oppressive and I loathe them.
But, David is absolutely correct.
While I would like to see an end to property tax, he, wisely, says: “Hey! Property tax should be limited, at the very least, to the increase in inflation for those over 65”.

At the very least, what’s wrong with that.
But, of course, we’ve got so many brain washed Americans, they think it is quite normal to bend over and get screwed by government, no matter how oppressive it is. What is right and what really happens, and what we all think is right is vastly different.

And, because of that, we’re all screwed by the elitist, bought-and-paid-for government that preys upon us. We are so disorganized and complacent. But we pay them daily to use all of that against us.

Posted by: d.a.n at March 9, 2006 09:42 PM
Comment #132584

David
the reverse mortgage is a theft of inheritable assets from the elderly.

Ain’t that the truth. While the reverse mortgage lets a person draw money base on equity and the value of their property, it has to be paid back sometime. This is usually at death. The heirs are the one that have to settle with the mortgage company. Most the time they end up either selling or loosing the property to the mortgage company. The only one who makes out here is the company holding the note.

Posted by: Ron Brown at March 10, 2006 12:34 AM
Comment #132615
In Orford, N.H., a tin-roofed hunting cabin worth $10,000 was recently assessed at $200,000, just for its mountain view. Taxes on the cabin and its outhouse skyrocketed.

Oh, give me a break! Somebody buys a cabin for $10k, and it’s now worth $200k, and I’m supposed to feel sorry for him??!! The solution here is simple… sell the place, take your $190k in profits, and go buy a new tin-roofed cabin somewhere else!

This guy basically won the friggin’ lottery, and I’m supposed to feel sorry for him because the State’s taxing his winnings??!! I don’t think so!

I can understand complaining about increased property tax RATES… but complaining about increased property VALUES is insane.

Posted by: Rob Cottrell at March 10, 2006 09:23 AM
Comment #132630

Rob,

Why should people be forced off their land because they don’t want to sell, but can’t afford the tax? Sure, it’s a landfall if he wants to sell. But property tax should not be running people off their property. That is what is happening. Also, a lot of those high appraisals are inflated. That is why I go every year and fight the increases. Every year they try to raise my property appraisal, and every year I go protest it, show the sales of similar homes in the neighborhood, and they have to lower it again. But, to me, that is tax harassment, and I’m sick of it. Property tax is oppressive and unfair. It’s like a poll tax. You’re getting tax on what you already own every year! Not fair !

That’s why I’m seriously going to build an ugly barn (nice on the inside) to live in, so that my taxes will be very low. This is the ridiculous things oppressive taxes drive people to do.

But, since the tax systems are all unfair and oppressive, I begrudge no one for tax evasion. That’s what should happen. No respect should be paid to any unfair and oppressive tax system.

In the last 10 years, I have paid out over $31K to property tax alone on an ordinary middle-class home on one-fifth acre lot. But, a barn on 30 acres only had to pay $7000 in ten years. Big difference. That’s why I’m going to build an ugly barn in the country (nice on the inside). Lets try and see the scum-bag tax appraiser prove that anyone would pay $150K to live in an ugly metal barn?

Like David Remer said…the very least bought-and-paid-for incumbent politicians could do is limit the jump in property tax to that of the national inflation rate.
But, we know that ain’t gonna happen. Bought-and-paid-for incumbent politicians can vote themselves a raise, and cu$hy perk$ and retirement plans in a heart-beat, but they can’t ever seem to ever pass any common-sense reforms to eliminate or reform things like the marriage-penalty tax, huge jumps in property tax, eliminate tax loop holes and deductions, etc.

Property tax and the people that invented it deserve to be loathed and despised.
Likewise for crooked, bought-and-paid-for incumbents in government.

Until the tax system is reformed to be fair, it will not be respected….especially by those the benefit by all the loopholes and deductions.

Posted by: d.a.n at March 10, 2006 10:51 AM
Comment #132636

Dan makes a great, and crucially important point. The underground economy which has been growing for decades, the black markets, the cash only businesses, and the creative tax protesters all are a predictable response to an unfair and for far too many, oppressive tax system in this country.

What’s up with this law that allows tax dodgers owing $10,000 or more to the IRS to come clean with payments of dimes on the dollar and walk away scott free. How fair is that to the rest of us who pay in full?

Dan, the Barn idea is great. I know someone who has been building their own home for 10 years now, and it appears there home will never be finished, because the law stipulates they can’t levy tax on an unfinished structure. An unfinished home has no market value.

But these are the very kinds of activities that erode the fundamental concept of the rule of law and the people’s will to abide it. We are a nation of people with growing disrespect for the law. That is the consequence of unfair and unjust laws that permit so many people to be more equal in the eyes of the law than others. It does not bode well for America’s future.

And the Law Makers, as you so rightly point out, are the responsible parties though they would deny it with every dollar of lobbyist and special interest money.

Posted by: David R. Remer at March 10, 2006 11:12 AM
Comment #132641

d.a.n,

Why should people be forced off their land because they don’t want to sell, but can’t afford the tax?

Let’s look at it another way. Should people be forced off their land if they don’t want to sell, but can’t afford the UPKEEP? If someone’s home is falling apart, bringing property values down around them, should they be forced to do something about it? In most neighborhoods the answer would be YES.

Property tax is just part of the cost of upkeep on real estate. If you can’t afford it, you shouldn’t be buying land. If you actually OWN your home, you have the money (in equity) to pay it.

If they’re appraising your land for more than it’s worth, fight them on it. If they’re doing it consistently for everyone, for a citizen watchdog group to fight them.

Like David Remer said…the very least bought-and-paid-for incumbent politicians could do is limit the jump in property tax to that of the national inflation rate.

So, if someone buys a piece of land for $10k and builds a $500k home (or a $500m skyscraper)on it, their property taxes shouldn’t go up?? They should pay taxes based on $10k + rate of inflation?? That doesn’t make sense.

Let’s look at it from the other side. If your property value goes DOWN (say they build a landfill or a coal plant next door), do you think your property taxes should drop accordingly? Or should they remain as they were when you bought the land? After all, if you’re on a fixed income, you must have budgeted for the existing taxes, and have no need for tax relief.

Ron Brown,

Ain’t that the truth. While the reverse mortgage lets a person draw money base on equity and the value of their property, it has to be paid back sometime. This is usually at death. The heirs are the one that have to settle with the mortgage company.

The solution here is simple, too. Instead of the reverse mortgage, sign the home over to the person who would inherit it anyway, and let THEM pay the property taxes. Chances are, they’re not on a fixed income and, if they can afford it AFTER the elderly person dies, they can probably afford it beforehand, too.

We have to collect taxes somewhere. If you want government services, you have to pay for them. Every tax has a downside — property taxes discourage people from owning property, income taxes discourage people from earning income, sales taxes discourage people from spending money, etc. Raising ANY tax rate to an unhealthy level can ruin a society. But raising taxes on property when the property actually appreciates in value just makes sense.

Posted by: Rob Cottrell at March 10, 2006 11:32 AM
Comment #132676
income taxes discourage people from earning income

Posted by: Rob Cottrell at March 10, 2006 11:32 AM

Do you seriously believe that?

Posted by: Dave at March 10, 2006 02:24 PM
Comment #132678

Dave,

income taxes discourage people from earning income

Do you seriously believe that?

To a certain extent, yes. Exceptionally high income taxes (close to 100%) would certainly discourage people from earning income. Likewise, taxes on certain types of income discourage people from earning that type of income, while encouraging earning different types. Consider CEOs who receive a salary of $1/year (and thus avoid payroll taxes), but get all sorts of stock options and perks that they don’t pay those taxes on. Heck, my 401k is tax-deferred… income tax laws discourage me from using that money as “income” now, and instead saving it for retirement. (Never mind the fact that I’m in debt up to my eyeballs, and could use that money today to pay that debt off…)

And, as has been addressed by David and d.a.n, income taxes certainly discourage people from earning DECLARED income. Cash-only jobs rarely get reported as income.

Posted by: Rob Cottrell at March 10, 2006 02:41 PM
Comment #132684
Dan, the Barn idea is great. I know someone who has been building their own home for 10 years now, and it appears there home will never be finished, because the law stipulates they can’t levy tax on an unfinished structure. An unfinished home has no market value.

Really? Thank you very much for that piece of information.

Rob,
Sorry, but it will take a much better argument to ever sell me on property tax of any kind.

All property tax and sales tax systems should be abolished, and replaced with a simple, fair, flat income tax:

(1) federal flat income tax: 17%
(2) state flat income tax: 2% (for public school)
(3) county/parish flat tax: 1%
(4) city flat tax: 1%

Eliminate all other types of tax, all loop holes, all deductions.

That would be most fair, very simple, and would not hammer the poor or those with very low income, or run people off their land.

But, I realize it may be unrealistic to ever expect crooked, bought-and-paid-for politicians and their big-money-donor puppeteers to ever allow any such fair, common-sense reforms.

That’s why Americans should vote out (or recall) all of the corrupt, bought-and-paid-for incumbent politicians.

BTW, that 17% federal tax could be lowered someday when Social Security ($12.8 trillion) and Medicare are no longer in the hole. If it weren’t for that, 8% would be sufficient.

Posted by: d.a.n at March 10, 2006 03:23 PM
Comment #132693

d.a.n,

Sorry, but it will take a much better argument to ever sell me on property tax of any kind.

And it’ll take a much better argument to convince me that property taxes are evil. Or that any tax other than the report-every-cent-you-make-to-the-gigantic-beaurocracy Income Tax is evil. In my opinion, any tax that can’t actually be calculated and collected at the time it is incurred is a bad tax. You may think that the IRS is efficient, that estimated taxes with refunds later are a good idea, and that America is better off spending millions of dollars on tax preparation every year, but I disagree.

And I certainly am not going to shed a tear just because the people who actually own a piece of this country are being taxed to support it. In my opinion, they’re the ones who SHOULD be taxed, instead of the poor bastards out there who can’t afford a house.

Posted by: Rob Cottrell at March 10, 2006 04:04 PM
Comment #132700

Rob,

Let’s skip the “discourage income” vs. “avoid tax” discussion I was about to embark on…

Do we actually agree that a wealth tax should replace an income tax?

Posted by: Dave at March 10, 2006 04:36 PM
Comment #132705

Dave,

Do we actually agree that a wealth tax should replace an income tax?

That would depend entirely on what kind of Wealth Tax you had in mind.

I’m not opposed to income taxes per se. I just think that any income tax should be a flat tax, with no exceptions, so we can get rid of this filing-taxes-after-the-fact nonsense.

Posted by: Rob Cottrell at March 10, 2006 05:16 PM
Comment #132781

Rob
Deeding the property over to the heirs is one way to solve the problem. But what if they don’t have any heirs to deed it too? Should they lose the property they’ve worked all there lives for because they can’t afford the higher taxes?
I’ve talked to my lawyer about the couple up the road from me that I mentioned earlier. She going work with then pro-bono to see what can be done for them.
BTW, I have a really great lawyer. Not only is she intelligent. She a very sweet girl. Not to mention very good looking. But then I might be just a little bias there.

Posted by: Ron Brown at March 11, 2006 02:57 AM
Comment #132806
And it’ll take a much better argument to convince me that property taxes are evil.
Well, in my opinion, I can state a much stronger case for a flat rate income tax (with a poverty level exemption), than a combination of income tax, property tax, and sales tax (not to mention hundreds of other taxes we all get hit with daily). Maybe where you are, the property taxes are low? Mine are not. I pay $310 per month for a ordinary 2100 sq.ft., 21 year old house, on a measlely one-fifth acre. That’s too much.

That’s why I am going to sell it and build an ugly metal barn (nice on the inside) that will be taxed much much less. I am looking for a few acres now. I don’t care what the outside looks like. I don’t like being taxed every year on what I already own. It is oppressive, and people should loathe it and those that support it.

Or that any tax other than the report-every-cent-you-make-to-the-gigantic-beaurocracy Income Tax is evil.
First, you have to eliminate all the income tax loopholes. Then, you must not collect any tax until until income exceeds the poverty level. And, then, only on income above the poverty level. That is the fairest way to tax. It is the easiest to calculate. It is as simple as possible. It would reduce 90% of the paper work. Returns would not even be necessary. I have stated many times it should be a simple flat tax, with all complicated deductions and loopholes eliminated, a poverty-level exemption, and no tax until the poverty level threshhold is exceeded, and tax is only paid on the income above the threshhold.

Why keep trying to characterize the flat rate income tax as comlplex and requiring a lot of calculation? It doesn’t require any reports or refunds. There are no refunds in the plan I propose. There are no deductions. It is the most simple plan of any tax plan. And it is the most fair too. But don’t worry. Scum bag politicians will never abolish property tax, sales tax, or income tax. If anything, they will dream up more things to tax.

BTW, how much time and effort to you think it takes to go around and do property appraisals, track sales, etc.? How much does it cost all of us when people like me have to go protest unfair taxation appraisals every year? Every year I have to go and protest the high appraisals, and always get it lowered. That is tax harassment. But, I’ll keep fighting it, and keep working on my ugly barn to live in, so that I can get around that oppressive property tax. Perhaps I should put a junk yard on it to lower the tax appraisal even further?

In my opinion, any tax that can’t actually be calculated and collected at the time it is incurred is a bad tax.
Agreed. My tax plan does calculate tax and it is sent to the IRS. It’s a flat rate 17% income tax. But, no tax is sent as of 01-Jan until the persons income exceeds the poverty level threshhold. All the government has to do (which it already does) is track income since 01-Jan.
You may think that the IRS is efficient, that estimated taxes with refunds later are a good idea, and that America is better off spending millions of dollars on tax preparation every year, but I disagree.

Nope. I never said that. Again, you are trying to twist the debate. The IRS could be much smaller if the tax system were simplified as I recommended.

And I certainly am not going to shed a tear just because the people who actually own a piece of this country are being taxed to support it.
That’s fine for you. Not for me. Wait until you’re largest monthly bill is property tax. Wait until you have to move because you can’t afford the tax.

The more fair way to tax is to tax income the same flat rate, and only tax anything above the poverty level threshhold, eliminate all loopholes, and eliminate sales taxes and property taxes. You say the government must get taxes from somewhere. I never argued that they didn’t. The point is where it comes from. Sales tax and property tax are unfair, and there are many examples to prove it. People being forced to sell land their family owned for generations. Sales tax hammers the poor, because the sales tax is a higher percentage of their income. These are no-brainers. To say that is OK or allow it is to condone or accept oppression.

In my opinion, they’re the ones who SHOULD be taxed, instead of the poor bastards out there who can’t afford a house.
Under the tax system I suggested, they would not be taxed on their property, or purchases (via sales tax), or any income until they exceed the poverty level. That’s plenty fair.

No tax system will be perfect or liked by all.
But, that is no reason to accept a bad system.
And there is no way to defend the way sales tax and property tax hammer the poor. Income tax, with a poverty level exemption can not possibly hammer the poor.

And finally, no reforms will ever be possible, until the voters finally get fed-up enough to finally start voting out (or recalling) all irresponsible incumbents, always, every election, until no more irresponsible bums are left, and government is finally transparent, accountable, and responsible too !

Posted by: d.a.n at March 11, 2006 01:07 PM
Comment #132808

Ron Brown,

If they don’t have any heirs to deed the land to, then they shouldn’t be worried about using the equity in their home to pay the property tax.

What if your couple up the road didn’t have to pay property tax, but was in danger of losing their home because they couldn’t afford the upkeep? If their yard was overgrown, the paint was peeling off of their house, and the shingles were blowing off of their roof into their neighbor’s yard, and bringing the property values of the neighborhood down with them, would you still be defending them, and claiming that it’s unfair that they’re losing their house?

Posted by: Rob Cottrell at March 11, 2006 01:10 PM
Comment #132811

Rob, the main point of argument is the forcing of Americans from their homes through taxation which these seniours or low wage workers worked a lifetime to acquire and own for their retirement years.

It doesn’t need to be this way.

Posted by: David R. Remer at March 11, 2006 01:18 PM
Comment #132820

d.a.n,

Explain to me how this 17% flat tax of yours would work. If, for example, I’m working three jobs, and get a paycheck from one of them today for $500, how much should they withhold for taxes? They have no idea how much I’ve earned in my other jobs, so don’t know if I’ve passed the poverty limit or not.

Posted by: Rob Cottrell at March 11, 2006 02:21 PM
Comment #132822

David,

If they didn’t plan well enough to be able to maintain a home in a high-property-value area, then they shouldn’t expect to be able to live in a high-property-value area. If the property value increased after they bought the land, then there’s an upside (increased value of their asset) and a downside (increased property taxes). That’s part of life. Use the extra equity to pay for the extra property taxes, and you’ll probably still come out ahead (especially if you’re near the end of your lifespan anyway).

You still haven’t addressed some of the more fundamental objections to your proposal. First, how would it handle improvements to the land (such as building a multi-million dollar skyscraper on it)? Second, how would it handle property value DECREASES (especially if they were followed by increases in future years)?

Posted by: Rob Cottrell at March 11, 2006 02:30 PM
Comment #132827
What if your couple up the road didn’t have to pay property tax, but was in danger of losing their home because they couldn’t afford the upkeep?

Weak. So, since they are not able to maintain their home, they should be forced out of their home via property tax? So, you seem to be saying that the property tax system is a good tool for removing people from their home? And, you are in favor of it if it will keep out the riff-raff ?

BTW, zoning laws, safety and building code laws, potential hazards (e.g. swimming pool with no fence), etc. already deal with the problem you speak of, and really should have no connection with the issue property tax. Like I said, it seems you are trying to say that property taxes are a good way to keep out the lower-income people. And, I do not abide by that at all, which is another reason I loathe property tax.

So, it doesn’t matter that people who just happened to buy a home on a piece of land that quadrupled in value should be forced to sell it simply because they can’t affort property tax? Now, you see one really huge problem with property tax.

And, why should people be taxed on property at all (much less every year)? Didn’t they already pay tax on the income that bought it? And, you know it is all about location. 1 acre in the city will be taxed

Because, if you are, you are endorsing a system of methodically removing people with low incomes from their land. It is forcing a change of ownership.

Sorry, Rob. Sure, we need some taxation. But, it must be fair, or it won’t be respected.

And, since I have no respect at all for property tax, I’m designing my new ugly barn now to build on an acre north of Dallas (I already have a 2 story cabin on 30 acres in New Mexico with 3200 square feet, and the tax is only $600 a year because it looks like a metal barn on the outside, but is nice on the inside, and getting nicer).

After my new metal barn is finished, my property tax will go from $310 per month to only $50 per month.

Posted by: d.a.n at March 11, 2006 03:24 PM
Comment #132830

d.a.n,

You completely misinterpreted what I was saying. I’m not suggesting that property taxes should be used to “keep out the riff-raff”. I’m just pointing out that owning a home has a periodic upkeep cost EVEN IF PROPERTY TAXES DON’T EXIST! You still have to mow the lawn, paint the fence, fix the roof, etc. If you don’t pay those periodic costs, your house becomes unliveable, and eventually drives down the values of the properties around it. Because of building and safety codes, someone who worked their whole lives for their house could lose it simply because they can’t afford to maintain their property to the standards set in the community. Is that fair? Why aren’t you campaigning against that, d.a.n?

Posted by: Rob Cottrell at March 11, 2006 03:37 PM
Comment #132834
d.a.n, Explain to me how this 17% flat tax of yours would work. If, for example, I’m working three jobs, and get a paycheck from one of them today for $500, how much should they withhold for taxes? They have no idea how much I’ve earned in my other jobs, so don’t know if I’ve passed the poverty limit or not.

Rob Cottrell,
Income is a very easy thing to track.
Employers (W-2, 1099, etc.) would simply log on, enter the income amount, and get back the tax amount. It will be $0 ( 0% ) until their income as of 01-Jan exceeds the low-income-exemption level.

Privacy is maintained. The employer does not ever need to know what the employee’s total income is. The employer only needs to know what the tax is on the income amount immediately in question. Usually, it will 17%. Sometimes, the 17% may only apply to a portion of the income amount, since only a portion was over the low-income-exemption level.

Self employed people would continue to do as they do now. They pay income tax many times per year. Not much changes there, except that the self-employed person would not have to pay tax until their income as of 01-Jan exceeds the low-income-exemption level.

It’s really very simple.

It is much more simple than the costly, complicated sytem we have now, which is estimating, calculating deductions, depreciations, interest deductions, etc., etc., etc.

With a flat 17% income tax, and a low-income-exemption level, there’s no need to estimate.

Therefore, in the very simple, common-sense system I have described, the IRS knows everyone’s total income as of 01-Jan at any instant. Privacy is maintained, because the IRS never tells what anyone’s income is; it only indicates what the tax is on the current income amount in question.

Already, employers pay part of each income employee’s income to the IRS. Nothing would change there. In fact, in the new system, the employer does not need to know much about the employee at all (such as now, they have to estimate a withholding amount based on number of exemptions, etc.; why burden employers with that? It’s not necessary).

The IRS always knows, up to the minute what a person’s income is since 01-JAN.

If a person has multiple income streams, the IRS will always know what it is since 01-JAN.

It is all computerized. Much like your bank balance. It still allows for the current accounting required for Social Security and Medicare.

Also, this new tax system would require that all deductions, loop holes, and tax shelters be eliminated, completely.

Also, the 17% could become smaller later.
Unfortunately, based on current revenues, population, etc., 17% is necessary to fund the Social Security (currently $12.8 trillion in the hole), Medicare, Military, Welfare, etc.

Now, it would be great if states, counties, and cities also eliminate all sales and property taxes, and adopt a similar flat-rate income tax system (each only 1% or 2%) on income above a specified low-income-level-exemption.

To me, until I hear something better, is the most fair tax system. No tax system will be perfect or loved, but the most fair system will be respected, and possibly raise more revenues than the current perverted system does.

Posted by: d.a.n at March 11, 2006 04:29 PM
Comment #132837
Because of building and safety codes, someone who worked their whole lives for their house could lose it simply because they can’t afford to maintain their property to the standards set in the community. Is that fair? Why aren’t you campaigning against that, d.a.n?

Well, that’s not a very good analogy, because in most places, you can not be evicted from your home unless it is condemned. A person might get fined letting his grass grow tall, or his old fence falling apart, but those things are easily remedied. Some people get fined for doing stupid things like painting their house or fence purple or many colors to irritate the neighbors. But, getting evicted from a home for it being run down is not something I’ve heard of happening anywhere, except in a very few isolated cases where some areas have covenants that everyone agrees to per contract. So, what you’re talking about (being evicted for insufficient maintenance) is a bit of a stretch. The issue of maintenance is usually not important, unless there is some related safety issue, like the house next door that burned, and left an unfenced-in swimming pool in the back yard.

But, these are somewhat rare, and in many places, not even strictly enforced.

In the case in which a property becomes a hazzard to the surrounding community, the owner would not lose the property, but they may lose access to it temporarily until they are able to make it safe. That type of scenario doesn’t happen that often, and it is more of a safety issue, instead of a tax issue.

In reality, there are very few cases where a person’s property was deemed hazardous to the neighboring community, unless they, or someone else nearby was doing some serious polluting, or something illegal.

So, the issue of people being forced off their property because it isn’t well-maintained may be a red herring, and if the property is unsaafe, then the community is justified to do something to make it safe (e.g. fine the owner, or put a fence around it to restrict access to it), but even then, the owner of the property can not be forced to relinquish ownership.

Posted by: d.a.n at March 11, 2006 04:49 PM
Comment #132907

Very good question. Actually, their house isn’t in that good of shape. The shingles aren’t blowing into their neighbors yard, they have a tin roof and we’re their closes neighbor 3/16 mile away, and their yard isn’t over grown. The house does need paint real bad. And the roof leaks a bit. The place might be considered an eye sore if it was in some city. But out herein the boonies no one pays it much mind.
The only ones I’ve heard bitch about it are the yuppies over by the river. But then they bitch about everything.
I’ve known the folks all my life and would hate to see them loose their home under any conditions. So yeah I reckon I would defend them if they were fixing to loose it under the circumstances you described.
A group of us neighbors are fixing to go over there and fix the place up for them. This is what neighbors do in the rural South. Not try to get the owners thrown out.

Posted by: Ron Brown at March 12, 2006 12:11 AM
Comment #132908

BTW, The above is responding to Rob.
Forgot to note that.

Posted by: Ron Brown at March 12, 2006 12:15 AM
Comment #134108
d.a.n,

You completely misinterpreted what I was saying. I’m not suggesting that property taxes should be used to “keep out the riff-raff”. I’m just pointing out that owning a home has a periodic upkeep cost EVEN IF PROPERTY TAXES DON’T EXIST!

Rob Cottrell,
I did misinterpret what you were saying. I apologize. True, property requires up-keep. Some can be a money pit, and begin to own you. My next home will be designed to be very low maintenance and energy efficient.

As for the topic of property taxes, the very least government could do is limit the increases per year. Where I live, it is 10% per year of appraisal value limit (not the tax, the appraised value), and the governments met that limit 4 years in a row: 1998=$2115
1999=$2487 (increased $174, 7.5% tax increase)
2000=$2805 (increased $318, 12.8% tax increase)
2001=$3071 (increased $255, 9.48% tax increase)
2002=$3537 (increased $467, 15.2% tax increase)
2003=$3731 (increased $193, 5.5% tax increase)

So, in five years, my property tax jumped 50% !

But they have another tactic. If the 10% cap on appraised value is insufficient, they simply raise the property tax rates, because there is no cap on tax rates (only a 10% cap on appraised value).

Now, you can understand why I want to go live in an ugly barn (nice on the inside) that no one wants to buy.

Posted by: d.a.n at March 17, 2006 12:00 PM
Comment #218571


Where do you find this law?

Dan, the Barn idea is great. I know someone who has been building their own home for 10 years now, and it appears there home will never be finished, because the law stipulates they can’t levy tax on an unfinished structure. An unfinished home has no market value.

Posted by: Richard at April 27, 2007 12:09 AM
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