Galt's Gulch

False Premises

Posted by $ blarman 9 years, 9 months ago to Economics
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I hate property taxes - mostly because they are based on a purely fictitious number: property "value".

Ask any accountant what a property's value is worth and what will they tell you? What was PAID for it. Not what some bureaucrat sitting in an office somewhere thinks it MIGHT be worth #1 IF it was up for sale and #2 IF someone were willing to purchase it! The problem is that NO SUCH TRANSACTION HAS ACTUALLY TAKEN PLACE!

If it were up to me, ALL property values would be the ACTUAL purchase price. Period. No indexing for inflation, no adjustments being made by self-serving bureaucrats and politicians. The value of something is determined by what the owner was willing to PAY for it - not some theoretical amount someone else wants to extort them for!

PS - did you catch the nice little play on words in the title?
SOURCE URL: http://www.twincities.com/localnews/ci_26165024/minnesota-farmland-taxes-expected-rise-report-says

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  • Posted by $ rockymountainpirate 9 years, 9 months ago
    People just don't seem to understand that they are only renting the property from the government. Don't think so? Try not paying the taxes and see who owns it. Without property rights there can be no freedom, but do we really have property rights on real property?
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  • Posted by flanap 9 years, 9 months ago
    Value isn't the problem here. The problem is that property taxes result in the government always owning the land. Any taxes you have to pay for simply existing result in perpetual ownership by the governing authority.

    Wow, via the Affordable Care Act, we are now owned by the gov't as well!
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  • Posted by Zenphamy 9 years, 9 months ago
    The entire concept of property taxes is an abomination. Charge for the actual services rendered make a lot more sense for a free society.
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  • Posted by robertmbeard 9 years, 9 months ago
    How many forms of taxation can you think of, where your income or purchased property is taxed a 2nd time or multiple additional times?

    Off the top of my head, I can think of 2 such taxes: (1) annual property taxes, (2) death tax.

    Property tax rates average about 1.2%, but range from 0.3% to well over 2% each year. If you assume an annual housing value appreciation equal to the inflation rate (to simplify the analysis), property taxes confiscate an average of 36% of your property's value over the life of a 30-year mortgage. Using the rates above, the range of confiscation is 9% to well above 60%.

    What else can you call this, other than legalized theft?
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    • Posted by Zenphamy 9 years, 9 months ago
      That's true of everything you own. The mining of the elements from nature are taxed, the labor to get them is taxed, the equipment to get them are taxed, the fuel or energy used are taxed, the profits are taxed, same thing on the processing into a usable form, then again in the manufacturing, then again at the wholesale level, and then at the retail level - trying to detail all the taxes taken on anything simply staggers the mind.
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  • Posted by Technocracy 9 years, 9 months ago
    I agree the values they use are fictitious.

    If they were required to purchase your property at that price if you decided to sell, then they might have some bearing on reality.
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  • Posted by $ Abaco 9 years, 9 months ago
    American citizens actually don't own any real estate. It's all a sham. Oh sure...if you're a very wealthy and well-connected person you might be able to work out a deal. But, in general, it's all a sham.
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  • Posted by $ johnrobert2 9 years, 9 months ago
    I guess if it came to condemnation or eminent domain issues, you could hold up their taxable value as to the minimum you would accept. Hoist by their own petard, so to speak.
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  • Posted by khalling 9 years, 9 months ago
    It's a fair amount of work but in our city you can petition to have valuations reduced by supporting your claim with sales in the area. This was especially helpful after the housing meltdown. In fact the city did a one time reduction of all property based on the sharp decrease in property values.
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    • Posted by Bobhummel 9 years, 9 months ago
      True KH, but if you question a municipality's valuation you must provide the appraisal (usually 2 are required) at your expense and they don't have to except them. It really depends on the county. We had a similar reduction on our valuation during the Fannie Freddie meltdown but it was still small relative to the amount due to the county treasury. The poor bastards that live in the counties in and around Denver are constantly being taken by their heels and shaken by the municipalities for ever loose penny in valuation, mil levy, or bond issue.
      Cheers
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