Property Taxes Pave the Road to Serfdom

[ScreamingEagle]

if you own or rent a home you pay a bundle in property taxes....politicians control these taxes and they seldom talk about them.....it's like a feudal system and you are the serfs....in cities property taxes are used to pay for fat government pensions and union benefits......property taxes continue to rise even as wages fall....is that fair...?

is it right that you never really own your home or property outright because the government always has a 'lien' like a mortgage against it in the form of taxes.....if you don't pay the property tax they will take your home...it's like they are on the deed with you....why should the government essentially 'own' your home....?

the median property tax is $2,043 per year.......so why aren't these huge chunks of your outgo included in the Federal cost-of-living measurements...?

Property taxes are an open doorway to administrative corruption, since the assessors, auditors, and tax appeal boards answer to no one. In reality these assessments are a violation of the due process clause of the Fourteenth Amendment, but they are allowed to go on. At some point their constitutionality should be challenged. The homeowner has no option but to pay the new tax or move away, and potentially lose all the equity in their home.

Politicians do not want the property taxes challenged in regular court. After all, most jurors would let their neighbors off of their property tax burden. Cities stubbornly, and arrogantly, refuse to write property taxes off the books when homes are abandoned. For example, in Detroit someone can buy a house for ten dollars, but they still have to pay the back property taxes. The local pols want their money.

Property taxes are the province of politicians, their campaign contributors, and their families and friends. And human nature being what it is, the elites make sure they themselves often pay much less than the masses who have no power. For example, Chicago Tribune columnist John Kass once wrote how in 1998 how the Hispanic political leader of Chicago, Congressman Luis Gutierrez, only paid $274 a year property taxes on a home valued at $350,000. His neighbor paid $5,000 for the same size home, built by the same builder. Gutierrez was a former chairman of the Committee on Real Estate.

So those who profess to advance the cause of social justice above all things end up taxing the middle class to support themselves and their campaign contributors. Of the 12 largest campaign contributors in the past 23 years, four are public sector unions, who earn their salaries and pensions largely, and often exclusively, through property tax assessments. So this motivates politicians and their media supporters to remain silent about the property tax issue.

And property taxes are not trivial. In 2010 the median real estate tax in the U.S. was $2,043 per year. But the term "median" means that half of the taxes are higher.

Working Americans are fortunate that home values have dropped. This enables them to be able to afford both a mortgage and the home's property taxes. But the long-term trend doesn't look good for working Americans. If property taxes continue to rise, and the incomes of Americans continue to fall, home values will have to fall as well. Supply and demand works both ways; as people earn less they can afford to pay less for homes.

Property taxes went up from 2005 to 2010. This happened during the housing bubble, when home values skyrocketed. But when home values collapsed, the property taxes did not go down in many areas. In fact, in many areas, particularly large urban areas, property taxes continue to rise, while the average American has seen their income drop to where they now earn as much as they did in 1996.

What is sorely needed is a national dialogue on the issue of property taxes, and the fact that taxpayers, who foot the bill, must have some say, not a tax board that is entitled to give themselves pay raises through coercion. This is clearly a violation of every Democratic concept of taxation and self-governance. American property taxpayers -- and renters pay property taxes as well through their rent -- must take back their local governments. A political mechanism must be found to restrain the outrageous behavior of local tax appeal boards.

The situation is set up for greed and corruption: those who raise taxes have no one to answer to but themselves, and they, unlike corporations, can give themselves raises, have conventions in Hawaii, and use employees for chauffeurs and maids, all while extorting the money from local homeowners, who are already suffering from excessive taxation, higher costs of living, and lower incomes. It is a more subtle but real duplicate of the feudal system: a few elites own all the property and demand annual payments or they will seize the land.

The property tax issue in the U.S. today is a clear illustration of what Friedrich Hayek referred to in his book The Road to Serfdom. Today, that road is being paved by property tax bills throughout the entire U.S.



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