The Problem With Property Taxes

Beyond Saving
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The Problem With Property Taxes

 Alright, anyone who has read any of my posts on politics knows that I am a huge fan of drastically cutting the size and power of government. I don't really want to discuss that here. What I want to discuss is that even I will concede that government needs X number of dollars and so there has to be some way to bring in that money. Most local governments get a majority of their revenue from property taxes. I believe that the property tax is the most immoral tax imposed by our society. I would prefer almost any other tax, although in my ideal world, taxes would come mostly in the form of use fees/taxes that directly tax those who use a particular government service, and limits the burden on those who don't.

 

Full disclosure: I am heavily invested in a property tax appraisal company. It is my most profitable investment to date and the one company I draw a salary from in addition to my cut of the profits. I am engaged in its day to day operations. The bottom line is that if property taxes ended, I would lose a shitload of money- happily. I am not a particularly large property owner. My house is modest, I have a few acres of land here and there but I have never bought into the hype of real estate being the golden goose of investment. As far as taxes go, the financial burden I experience from property taxes is insignificant. So from a personal finance standpoint I have a lot to lose and little to gain from the elimination of the property tax.  

 

Now for my problems with the property tax-

1. It is an extremely subjective tax. The tax is based on the predicted sale value of a home, so people like me go out to your house and try to guess what it is worth. We try to be as fair as possible, but the real estate market is messy and the value of a home is often based on things much more nuanced than solid numbers like square footage and cost to rebuild. Even a highly skilled and experienced appraiser is doing good if they can consistently estimate the value in a range of 90%-110% of the actual sale value. With the current market, it is even harder. 

 

As a result, it is extremely easy to justify a wide range of values for the same home. A person can challenge the value, but unless measurements are wrong or there is really good evidence, they will usually get very little relief- unless they are willing to hire a lawyer. This leads to wealthy people who own a lot of property paying substantially lower property taxes on the true value of their property than your average citizen. You aren't going to hire a lawyer to save you a few hundred dollars a year in taxes. The wealthy will hire a lawyer to save them tens of thousands in property taxes. The county can't afford to go to court, so when a lawyer threatens to sue, the county will usually lower the valuation of the property. When a large property owner buys a house, they almost always pay lower taxes on it than the people they bought it from. 

 

When an auditor decides to stand up against the wealthy and tax them fairly, they are generally unelected the following election. A few thousand dollars makes a huge difference in an auditor race where the number of yard signs is the primary determinate of who wins the race. 

 

2. The property tax discourages the poor and middle class from purchasing property.

The wealthy have no problem paying their property tax bill. It is relatively small compared to their wealth, and usually they have the means available to make the property earn money if they need to. Large tracts of land are valued substantially less per acre than small tracts. A 1000 acre tract might be valued at $1500/acre, a 1 acre tract is often valued $15000+ per acre. So a middle class person that wants to pick up an extra acre or two not only has to save up the money, but they also need to come up with the extra property tax. This makes it very difficult for someone with limited income to build up significant real estate investments, and is also the main reason that there are very few family farms anymore. In a society that is based on the idea of individual ownership, I think we should have a system that doesn't penalize the middle class or poor that try to own some land. I think it is healthier for our economy and our society for a large number of people to be land owners, rather than a handful of wealthy owners. 

 

3. Property taxes continually go up forcing people to move. 

I have a huge problem with people being forced to sell their homes and move because they can no longer afford their taxes. I have seen wealthy communities increase property values and intentionally increase property taxes to force the undesirables from their community. It is simply wrong. This especially happens around lakes and other highly desirable areas. People with houses that they have owned for years are forced to sell, or they default on their taxes and it is confiscated. Generally, when they sell the house they get a very low value from it because the purchaser knows the seller doesn't have many options. I would have less of a problem if property taxes were fixed after the purchase of a home and the owner knew what they would be forever, and could therefore plan for it. When your property taxes become more than your original mortgage payment, that is a problem. And it happens, I have seen it, and one time is one time too many. I think that once a person pays off their mortgage, they should own their home and never have to worry about making another payment in order to live there. I don't understand why that is so controversial, seems like a straightforward ideal to me. Local governments do sometimes have a homestead exemption for people over 65, but it amounts to a whopping 15% cut in their tax burden.  

 

4. CAUV laws are routinely abused. 

 

CAUV is basically discounts on property taxes for farms. Farmers pay substantially less per $1000 value than non-farmers. This is meant to preserve farms and encourage large tracts of land to be used for farm production. However, the way the laws are, large land owners might have a handful of tracts being farmed, but ALL of their property is on the program, even if it isn't being farmed. So they might own a couple hundred acres that is rented out to a farmer, and several hundred more that is woodland and used for recreational purposes. They pay the drastically reduced farm rate on 100% of their land. The person who owns an acre or two does not qualify for the special rate even if 100% of it is farmed.

 

Anyway, I have to go, but the bottom line is that the property tax is the most unfair tax we have. I hate it even more than I hate the progressive income tax (and you all know how much I hate that one). Usually on tax issues I don't side with the poor. In general, I think they should pay the same percentage of their income as I do. But I also think that everyone should pay the same percentage on land if they have to pay anything at all. It isn't right that those with more money get reduced tax rates compared to those with little land. However, with property taxes are based on the assessed value of the property, that will always be the case. If you changed it to a flat $ per acre regardless of value, you would save a ton of money not paying me, and everyone would pay the same rate. Or you can ditch the system entirely and make up for it with a different kind of tax. 

It was morality that burned the books of the ancient sages, and morality that halted the free inquiry of the Golden Age and substituted for it the credulous imbecility of the Age of Faith. It was a fixed moral code and a fixed theology which robbed the human race of a thousand years by wasting them upon alchemy, heretic-burning, witchcraft and sacerdotalism.-H.L. Mencken


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As a NJ homeowner, I pay 3X

As a NJ homeowner, I pay 3X the national average...

The problem, as I see it, is two-fold....

 

First... Past Gov's.... before my cherub cheeked angel Chris Christie got into office.... would NOT bargain in good faith with State Unions as a representative to the people... They would capitulate to every demand in return for votes...hence, betraying those they represented for political gain... Jim McGreevey and Jon Corzine should be shot for the crime of excesssive douchebaggery

Second... Bush and Obama have given all of our *federal* tax dollars to Banks.... so all of this money that was suppossed to filter back to state & Local municipalities isnt there...

 

Without doing serious research... I am of the opinion that 1% of a home's value, taxed annually.... would be fair....


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Beyond Saving

Beyond Saving wrote:

 Alright, anyone who has read any of my posts on politics knows that I am a huge fan of drastically cutting the size and power of government. I don't really want to discuss that here. What I want to discuss is that even I will concede that government needs X number of dollars and so there has to be some way to bring in that money. Most local governments get a majority of their revenue from property taxes. I believe that the property tax is the most immoral tax imposed by our society. I would prefer almost any other tax, although in my ideal world, taxes would come mostly in the form of use fees/taxes that directly tax those who use a particular government service, and limits the burden on those who don't.

 

Full disclosure: I am heavily invested in a property tax appraisal company. It is my most profitable investment to date and the one company I draw a salary from in addition to my cut of the profits. I am engaged in its day to day operations. The bottom line is that if property taxes ended, I would lose a shitload of money- happily. I am not a particularly large property owner. My house is modest, I have a few acres of land here and there but I have never bought into the hype of real estate being the golden goose of investment. As far as taxes go, the financial burden I experience from property taxes is insignificant. So from a personal finance standpoint I have a lot to lose and little to gain from the elimination of the property tax.  

 

Now for my problems with the property tax-

1. It is an extremely subjective tax. The tax is based on the predicted sale value of a home, so people like me go out to your house and try to guess what it is worth. We try to be as fair as possible, but the real estate market is messy and the value of a home is often based on things much more nuanced than solid numbers like square footage and cost to rebuild. Even a highly skilled and experienced appraiser is doing good if they can consistently estimate the value in a range of 90%-110% of the actual sale value. With the current market, it is even harder. 

 

As a result, it is extremely easy to justify a wide range of values for the same home. A person can challenge the value, but unless measurements are wrong or there is really good evidence, they will usually get very little relief- unless they are willing to hire a lawyer. This leads to wealthy people who own a lot of property paying substantially lower property taxes on the true value of their property than your average citizen. You aren't going to hire a lawyer to save you a few hundred dollars a year in taxes. The wealthy will hire a lawyer to save them tens of thousands in property taxes. The county can't afford to go to court, so when a lawyer threatens to sue, the county will usually lower the valuation of the property. When a large property owner buys a house, they almost always pay lower taxes on it than the people they bought it from. 

 

When an auditor decides to stand up against the wealthy and tax them fairly, they are generally unelected the following election. A few thousand dollars makes a huge difference in an auditor race where the number of yard signs is the primary determinate of who wins the race. 

 

2. The property tax discourages the poor and middle class from purchasing property.

The wealthy have no problem paying their property tax bill. It is relatively small compared to their wealth, and usually they have the means available to make the property earn money if they need to. Large tracts of land are valued substantially less per acre than small tracts. A 1000 acre tract might be valued at $1500/acre, a 1 acre tract is often valued $15000+ per acre. So a middle class person that wants to pick up an extra acre or two not only has to save up the money, but they also need to come up with the extra property tax. This makes it very difficult for someone with limited income to build up significant real estate investments, and is also the main reason that there are very few family farms anymore. In a society that is based on the idea of individual ownership, I think we should have a system that doesn't penalize the middle class or poor that try to own some land. I think it is healthier for our economy and our society for a large number of people to be land owners, rather than a handful of wealthy owners. 

 

3. Property taxes continually go up forcing people to move. 

I have a huge problem with people being forced to sell their homes and move because they can no longer afford their taxes. I have seen wealthy communities increase property values and intentionally increase property taxes to force the undesirables from their community. It is simply wrong. This especially happens around lakes and other highly desirable areas. People with houses that they have owned for years are forced to sell, or they default on their taxes and it is confiscated. Generally, when they sell the house they get a very low value from it because the purchaser knows the seller doesn't have many options. I would have less of a problem if property taxes were fixed after the purchase of a home and the owner knew what they would be forever, and could therefore plan for it. When your property taxes become more than your original mortgage payment, that is a problem. And it happens, I have seen it, and one time is one time too many. I think that once a person pays off their mortgage, they should own their home and never have to worry about making another payment in order to live there. I don't understand why that is so controversial, seems like a straightforward ideal to me. Local governments do sometimes have a homestead exemption for people over 65, but it amounts to a whopping 15% cut in their tax burden.  

 

4. CAUV laws are routinely abused. 

 

CAUV is basically discounts on property taxes for farms. Farmers pay substantially less per $1000 value than non-farmers. This is meant to preserve farms and encourage large tracts of land to be used for farm production. However, the way the laws are, large land owners might have a handful of tracts being farmed, but ALL of their property is on the program, even if it isn't being farmed. So they might own a couple hundred acres that is rented out to a farmer, and several hundred more that is woodland and used for recreational purposes. They pay the drastically reduced farm rate on 100% of their land. The person who owns an acre or two does not qualify for the special rate even if 100% of it is farmed.

 

Anyway, I have to go, but the bottom line is that the property tax is the most unfair tax we have. I hate it even more than I hate the progressive income tax (and you all know how much I hate that one). Usually on tax issues I don't side with the poor. In general, I think they should pay the same percentage of their income as I do. But I also think that everyone should pay the same percentage on land if they have to pay anything at all. It isn't right that those with more money get reduced tax rates compared to those with little land. However, with property taxes are based on the assessed value of the property, that will always be the case. If you changed it to a flat $ per acre regardless of value, you would save a ton of money not paying me, and everyone would pay the same rate. Or you can ditch the system entirely and make up for it with a different kind of tax. 

Beyond, I am going to give you some credit here. You rightfully admitted that government is needed and taxes are needed. THANKS.

But we still are on opposite sides of the fence.

EVERYTHING, sounds good on paper in a utopia. Which is why I think the founders were brilliant in understanding what one person's idea of a utopia would not be the next persons, and that the only way to make progress was common law.

In principle I agree less government would be nice, IN PRINCIPLE. In reality because people can be greedy and selfish FOR WHATEVER REASON, be it religious power, political power, or economic power, I think the founders came up with the best thing they could knowing people wanted different things. ANTI TRUST LAWS to prevent monopolies of power.

I would lean toward your position IF IF IF IF IF IF IF IF IF IF IF, those who had the power had self introspection, which I do not see in our current climate.

The government is not there for one political party or one class and as long as power shifts change over time you must have some sort of check on any combination that may arise to insure a way to prevent absolute power.

Now as far as property tax.

I am not sure how lopsided the law is because I pay my taxes on time so in reality I don't know. I don't think if you are a dollar short they should be able to keep ALL the proceeds of the sale. I think they should be able to kick you out, sell the house and GIVE YOU BACK whatever is left over minus the penalties based on fair market.

If the law is so lopsided that they can simply keep your house and you get nothing, then I agree that is wrong.

But the IRS wont simply take your house for being a second late.

EVEN outside this issue. I owe my state ONE DOLLAR, in income tax. I know I know. But even if I am late, I wont lose my freedom and the worst in this case it would merely be a pain in the ass.

I would be for a less convoluted tax code. And if you want to get rid of property taxes you would still have to find another column to put that revenue in to compensate for what you are not taking in under the label "property tax".

The IRS are not aliens from another planet. They are human beings both republican and democrat paid by our tax dollars to do a job. MOST of the time, because life is not perfect, most of the time, if you signal ahead to them that you are having a problem with something, they will work with you.

Unless you are outright looking to break the law they will work with you.

Instead of blaming other classes and instead of thinking in terms of one word solutions, HOW WOULD YOU DO IT.

I am for simplifying the code. But I am not for big money paying off congress to hide their profits in an overseas PO box.

 

 

 

"We are a nation of Christians and Muslims, Jews and Hindus -- and nonbelievers."Obama
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Brian37 wrote:Beyond, I am

Brian37 wrote:

Beyond, I am going to give you some credit here. You rightfully admitted that government is needed and taxes are needed. THANKS.

It was difficult. Made me feel dirty. 

 

Brian37 wrote:

Now as far as property tax.

I am not sure how lopsided the law is because I pay my taxes on time so in reality I don't know. I don't think if you are a dollar short they should be able to keep ALL the proceeds of the sale. I think they should be able to kick you out, sell the house and GIVE YOU BACK whatever is left over minus the penalties based on fair market.

If the law is so lopsided that they can simply keep your house and you get nothing, then I agree that is wrong.

But the IRS wont simply take your house for being a second late.

The laws vary from state to state but they aren't going to take your house for being late one year. Generally, it is a long process of notifications, letters, threats etc. They put a tax lien on your house first for the missed taxes plus penalties. If you can pay it within a given amount of time, all is clear. But if you weren't paying the taxes because you don't have enough income, time isn't going to help you. Then, in some states, you have the option of a tax lien sale where you sell the tax lien to an investor who pays the government all of the taxes and you are in debt to that investor. You have a certain amount of time to pay back the investor, if you fail to pay them back, the investor gets the deed to the property. 

 

If tax liens are built up and no one purchases the lien a property can go on to a tax deed sale. At this point it is auctioned off to the highest bidder much like assets seized by police are. 100% of the sale goes to the county. 

 

In practice, MOST people simply sell their house when they start getting the threatening letters and they realize that there is no way for them to come up with the money. Very few people stick it out until the sheriff is sent to forcibly remove them from the property. Of course, in the current market selling your house is much more difficult, so we might see an increase in tax deed sales. Still, I don't think people should be put under high pressure to leave their homes. 

 

Brian37 wrote:

EVEN outside this issue. I owe my state ONE DOLLAR, in income tax. I know I know. But even if I am late, I wont lose my freedom and the worst in this case it would merely be a pain in the ass.

If you don't pay it for a long enough period you will lose your freedom. Of course, only owing one dollar they will probably give you substantially more leeway than they would give me if I was late or simply refused to pay. In the worst case scenario for me, they would start by putting tax liens on my assets like my house or car so I couldn't sell them without paying the tax. Then they would attempt to garnish my wages. If I stopped paying myself a wage to protect from garnishment they would probably throw me in jail as an example. When it comes to the IRS, I don't fuck around, they are very powerful.

 

Brian37 wrote:
 

I would be for a less convoluted tax code. And if you want to get rid of property taxes you would still have to find another column to put that revenue in to compensate for what you are not taking in under the label "property tax".

The IRS are not aliens from another planet. They are human beings both republican and democrat paid by our tax dollars to do a job. MOST of the time, because life is not perfect, most of the time, if you signal ahead to them that you are having a problem with something, they will work with you.

Unless you are outright looking to break the law they will work with you.

Instead of blaming other classes and instead of thinking in terms of one word solutions, HOW WOULD YOU DO IT.

I am for simplifying the code. But I am not for big money paying off congress to hide their profits in an overseas PO box. 

Sure they might work with you to pay the bill. But in the case of property taxes, which are not based in any way on your means to pay them, if you can't afford the bill what options do you have? At least income taxes are based on the amount of money you make, so if you can't afford them there is some reasonable expectation that you make enough to pay them eventually. Your not going to owe $5000 in income taxes if you only make $15000 per year. You might owe $5000 in property taxes. And if you don't have the money, eventually you have to sell or they take it.

 

To replace property taxes I would accept almost anything. A local income tax or sales tax or use taxes. All are better IMO.

 

On a federal level, my big pick with the income tax is that it is progressive. If every person paid the same percentage with no exceptions, I would be happy. I just don't think it is fair that those of us who invest and create new productivity pay rates of 30% + of our income while many of the uber rich and everyone who makes less pay 15% and below and many people don't pay a penny. That is why the federal income tax is my second most hated tax, only eclipsed by property taxes.  

It was morality that burned the books of the ancient sages, and morality that halted the free inquiry of the Golden Age and substituted for it the credulous imbecility of the Age of Faith. It was a fixed moral code and a fixed theology which robbed the human race of a thousand years by wasting them upon alchemy, heretic-burning, witchcraft and sacerdotalism.-H.L. Mencken


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Quote:To replace property

Quote:
To replace property taxes I would accept almost anything. A local income tax or sales tax or use taxes. All are better IMO.

Fair enough.

 

Quote:
On a federal level, my big pick with the income tax is that it is progressive. If every person paid the same percentage with no exceptions, I would be happy. I just don't think it is fair that those of us who invest and create new productivity pay rates of 30% + of our income while many of the uber rich and everyone who makes less pay 15% and below and many people don't pay a penny. That is why the federal income tax is my second most hated tax, only eclipsed by property taxes. 

It depends, I think it is easier to give those who make less more of a break. I think it is absurd for the uber rich to find loopholes around what they really should pay.

But in general your "sense of fairness" is kicking in here, I have that too, so it isn't that either of us are boogiemen, but our points of view are different.

It makes no sense to me to make your entire life solely about making a printing press for money once you have way more than you need. Again, I think that kind of greed becomes counter productive ESPECIALLY when you end up paying a lower rate of taxes than the people at the bottom you employ.

To me it is abuse of power, not the wealth.

And when I said they will work with you. That doesn't mean you fuck with the IRS. I wouldn't either. It is the one entity where you are guilty until you prove yourself innocent.

 

 

 

 

 

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 Well, personally, I would

 

Well, personally, I would like to see more of a fee for service model myself.

 

As an example, I grew up in an upper middle class neighborhood and I remember that it was always a sticking point locally that we had a lower base tax rate than the people who lived downtown. Well great but we did have to pay privately for a bunch of stuff that the city was not providing us. Curbside garbage removal? Nope, someone had to haul ours off every few days. Connect to the city sewers? Nope, someone had to pump out our septic field every year. You get the general idea. We don't get the service, so we should not have to pay for it.

 

Past that, I would not have a gigantic problem with a flat fee for certain services that are automatic such as fire fighting an policing provided that the fees are reasonable. Just to pick some number, let me say $200/home owner/year. I would have to do a fair bit of digging to see how many home owners there are and the relevant budgets but at this point, it is only a number. Some other might be appropriate.

 

In order to make that work, there would also have to be a clear understanding that the services are there anyway but you would have been paying for them out of your property taxes if you did not pay them this way and even so, there is still no magical expectation on the services. You could easily come home from work one day to find that you have been robbed and hey, that is why you ought to have insurance.

 

Or how about if you were to pay a bit for your kids who are in school? Bloody hell, if you can go to all that trouble to find a house in a good area and pay for that based on the idea that the schools are good, then you can get a property tax break by covering part of the cost to actually send them to the school of your choice. And since I don't have kids, I get to pay slightly less tax as well because I am not a burden on that part of the system.

 

I could go on but the general idea should be clear. If people pay for what they actually use, then the government should have enough to cover the services which they provide.

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Answers in Gene Simmons wrote:

 If people pay for what they actually use, then the government should have enough to cover the services which they provide.

 

This sounds nice in theory, but what would probably happen is that a lot of people won't sign up for fire department services. And if a there aren't enough people signed up, then either you don't have enough money to run the fire department or you start charging huge fees. 


 

A lot of people will not opt for government sercives (see the differences for opt-in vs opt-out participation). And if the participation is not forced, then it's simply a business.  Forced participation (taxes) theoretically ensures lower distributed costs for goods and services that we all need. 

I think you could get away with privatizing everything. If the services of politicians were fee for use, well...who would pay politicians to legislate on their behalf? If taxes were fee for service, then there is no government, simply business. Whether this is good or bad is another discussion. :P 
 


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Answers in Gene Simmons wrote:

Or how about if you were to pay a bit for your kids who are in school? Bloody hell, if you can go to all that trouble to find a house in a good area and pay for that based on the idea that the schools are good, then you can get a property tax break by covering part of the cost to actually send them to the school of your choice. And since I don't have kids, I get to pay slightly less tax as well because I am not a burden on that part of the system.

 

I could go on but the general idea should be clear. If people pay for what they actually use, then the government should have enough to cover the services which they provide.

 

Okay, I once figured out the school thing.  I have three who all went to public school.  When the oldest started school, it was calculated to be about $2000 per year per child in costs.  By the time the youngest graduated high school, it was about $4000 per year.  It is more now.  And private school is more than that.  Let's just go with $3000 per year for my kids.

13 years (K-12) * 3 * 3000 = $117,000 to educate my children.

During the time my children were in school, I was usually renting.  But my landlord had to pay property taxes out of the rent.  And I have also noticed that most landlords charge monthly rent based on property taxes for the year.  So if you are paying $500 per month in rent, it is probably real close to $500 in property taxes for the year for that rental unit.  When my youngest graduated, I owned a house and it was about $350 per year for taxes.  So we will go with that, knowing - obviously - that it was a lot less when my oldest started school, but I don't remember what it was exactly.  And there is 4 years between the youngest and oldest, so call it 17 years with children in school.

$500 per year * 17 years = $8500

I would have to pay property taxes of $2340 for 50 years to pay for my children's education.  And even living in a good sized city and owning my own house, I am only paying about half of that.  It is currently doubtful I will live another 50 years let alone pay that much in property taxes.  I'll soon be eligible for senior discounts and as much as I don't want to, I will probably have to go with paying the lower amount.

That is assuming a lot of things.  I don't live in the same states where my children went to school, so technically, I am not reimbursing the tax payers of the states who paid for educating my children. 

There is another problem that most of the people who don't have children and who don't think they should pay for other people's schooling - you are surrounded by public school educated people.  The mechanic who repairs your car, your doctor, dentist, fireman, policeman, the nurse at the rest home you may wind up in and who gives you your medications are likely all public school educated.  It isn't a perfect education, with perfectly educated people graduating from the system.  Improvements could be made.  There may or may not be cost savings in the system.  Would you rather all of these people had no education at all?

Not many people can afford private education for their children.  Yes, some can and do.  But they are few and the people who can't afford private education are many.  Yes, if you can't afford to have a child, you shouldn't have children.  But that isn't what is happening now and it won't happen in the future.  I used to work with a guy who had one child.  After he had saved enough for private school and university education for his child, he was 49 when his son was born.  Not everyone has the patience or the type of work where they can meet this goal.

And if all that doesn't cause you to at least think a little bit about the consequences of closing the public schools, think about the millions of children running loose on the streets.  You don't seriously believe that all parents would be able to home school all of those children, do you?

 

edit: PS: I know that property taxes don't always pay just for schools, it depends on the local laws.  I also know that schools may also be funded from other sources - state and federal.  So I know my numbers are not particularly accurate.  But my argument still stands - even parents who send their children to public school do contribute to their child's education through the taxes they pay.

 

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cj wrote:Answers in Gene

cj wrote:

Answers in Gene Simmons wrote:

Or how about if you were to pay a bit for your kids who are in school? Bloody hell, if you can go to all that trouble to find a house in a good area and pay for that based on the idea that the schools are good, then you can get a property tax break by covering part of the cost to actually send them to the school of your choice. And since I don't have kids, I get to pay slightly less tax as well because I am not a burden on that part of the system.

 

I could go on but the general idea should be clear. If people pay for what they actually use, then the government should have enough to cover the services which they provide.

 

Okay, I once figured out the school thing.  I have three who all went to public school.  When the oldest started school, it was calculated to be about $2000 per year per child in costs.  By the time the youngest graduated high school, it was about $4000 per year.  It is more now.  And private school is more than that.  Let's just go with $3000 per year for my kids.

13 years (K-12) * 3 * 3000 = $117,000 to educate my children.

Public schools cost anywhere from $5000 to $25000 per student per year. Most private schools cost $5000-$10000 per year (Catholic schools only charge around $3500 for tuition but the actual cost of educating the student is higher, the difference made up by donations), but there are some exclusive ones that can be substantially more. Of course, the actual cost of sending a kid through school has nothing to do with the question of who should pay for it. I think that parents should at least pay more than people with no kids, even if they don't necessarily pay the whole thing. After all, you decided to have three kids, I have decided to have none- we don't have a population shortage, so there is no reason to encourage people to have more kids. And arguably, many reasons to encourage them to have less. 

 

cj wrote:

I would have to pay property taxes of $2340 for 50 years to pay for my children's education.  And even living in a good sized city and owning my own house, I am only paying about half of that.  It is currently doubtful I will live another 50 years let alone pay that much in property taxes.  I'll soon be eligible for senior discounts and as much as I don't want to, I will probably have to go with paying the lower amount.

That is assuming a lot of things.  I don't live in the same states where my children went to school, so technically, I am not reimbursing the tax payers of the states who paid for educating my children. 

Exactly the problem. Much of the population doesn't and never will pay for the services they use, while a much smaller portion of the population is paying for everyone while using relatively few of the services themselves. This creates a variety of problems, including the complete lack of incentive for anyone to cut spending. The majority of people are receiving without paying, what reason do they have to support a politician that wants to cut spending? People are always much more generous with other peoples money than they are with their own. How long can society continually take from the minority to pay for their special programs? We are quickly approaching the point where it can't go on any longer, but that is another topic.

 

cj wrote:
 

There is another problem that most of the people who don't have children and who don't think they should pay for other people's schooling - you are surrounded by public school educated people.

Yeah, I've experienced that problem.

 

cj wrote:
 

edit: PS: I know that property taxes don't always pay just for schools, it depends on the local laws.  I also know that schools may also be funded from other sources - state and federal.  So I know my numbers are not particularly accurate.  But my argument still stands - even parents who send their children to public school do contribute to their child's education through the taxes they pay.

Yes, your argument stands quite well. Most parents might contribute, but it is clear that the vast majority of them don't even come close to paying their "fair share". I'm all for people paying their fair share for the services that they use. 

It was morality that burned the books of the ancient sages, and morality that halted the free inquiry of the Golden Age and substituted for it the credulous imbecility of the Age of Faith. It was a fixed moral code and a fixed theology which robbed the human race of a thousand years by wasting them upon alchemy, heretic-burning, witchcraft and sacerdotalism.-H.L. Mencken


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lalib wrote:A lot of people

lalib wrote:

A lot of people will not opt for government sercives (see the differences for opt-in vs opt-out participation). And if the participation is not forced, then it's simply a business.  Forced participation (taxes) theoretically ensures lower distributed costs for goods and services that we all need. 

If so many people don't opt for the government service doesn't that imply that it is not a service "we all need"?

 

In what case has forced participation ever lowered costs? Can you cite a single example where a government ran service that uses forced participation is less expensive than a private business that does the same thing? Now, you can argue that things like fire and especially police protection need to be ran by the government despite being higher cost, but I don't think you can argue that the government is cheaper in any way. I would agree that we do not want a privatized police force (or military), I can go either way with the fire department and I would like to see a hybrid with the school system. 

It was morality that burned the books of the ancient sages, and morality that halted the free inquiry of the Golden Age and substituted for it the credulous imbecility of the Age of Faith. It was a fixed moral code and a fixed theology which robbed the human race of a thousand years by wasting them upon alchemy, heretic-burning, witchcraft and sacerdotalism.-H.L. Mencken


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Answers in Gene Simmons

Answers in Gene Simmons wrote:

 

Well, personally, I would like to see more of a fee for service model myself.

 

As an example, I grew up in an upper middle class neighborhood and I remember that it was always a sticking point locally that we had a lower base tax rate than the people who lived downtown. Well great but we did have to pay privately for a bunch of stuff that the city was not providing us. Curbside garbage removal? Nope, someone had to haul ours off every few days. Connect to the city sewers? Nope, someone had to pump out our septic field every year. You get the general idea. We don't get the service, so we should not have to pay for it.

 

Past that, I would not have a gigantic problem with a flat fee for certain services that are automatic such as fire fighting an policing provided that the fees are reasonable. Just to pick some number, let me say $200/home owner/year. I would have to do a fair bit of digging to see how many home owners there are and the relevant budgets but at this point, it is only a number. Some other might be appropriate.

 

In order to make that work, there would also have to be a clear understanding that the services are there anyway but you would have been paying for them out of your property taxes if you did not pay them this way and even so, there is still no magical expectation on the services. You could easily come home from work one day to find that you have been robbed and hey, that is why you ought to have insurance.

 

Or how about if you were to pay a bit for your kids who are in school? Bloody hell, if you can go to all that trouble to find a house in a good area and pay for that based on the idea that the schools are good, then you can get a property tax break by covering part of the cost to actually send them to the school of your choice. And since I don't have kids, I get to pay slightly less tax as well because I am not a burden on that part of the system.

 

I could go on but the general idea should be clear. If people pay for what they actually use, then the government should have enough to cover the services which they provide.

You cant cherry pick taxes just because you don't use a service. I don't have kids but my taxes DO go to public schools. And you can go years without needing firemen or police and you pay taxes for that too. If it means keeping my neighborhood or neighor's town clean, if it is in my county, why should I mind?

Again, there is no utopia and there will always be things I don't want to pay for with my taxes and things you don't want to pay for with your taxes, so what?

The problem with this attitude is who gets to decide who pays for what? Since you and I don't agree on that it makes it much more complecated than a simple "we should do this".

I haven't used a public library in years, but I don't mind paying for that because it provides others with access to all sorts of history, fiction, arts and science material they otherwise couldn't pay for.

The bottom line is that there is no utopia but there has to be taxes otherwise we wouldn't have a government to keep us civil.

Again, better arguments would be about waste. But again, one politician's waste is another's boon. Who get's to decide?

You can make an argument for less government, but again, for that to happen you have to be introspective in what you do is not harming others, if it is, those people only have one entity to call on to protect themselves, the government.

Our society is pluralistic and so we must have a government that is neutral to all parties, all classes, and all sects of society. The way you do it is to have competition in politics, with the protections of anti-trust laws to insure that no sect of society, political or economic can reach absolute power which creates abuse of power.

You can also argue for a less convoluted tax code. But in the end we all have to pay taxes and we will all end up paying for something we don't ourselves like or use.

Nothing is perfect and there is no utopia solution for a complex society.

 

 

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Beyond Saving wrote:Exactly

Beyond Saving wrote:
Exactly the problem. Much of the population doesn't and never will pay for the services they use, while a much smaller portion of the population is paying for everyone while using relatively few of the services themselves. This creates a variety of problems, including the complete lack of incentive for anyone to cut spending. The majority of people are receiving without paying, what reason do they have to support a politician that wants to cut spending? People are always much more generous with other peoples money than they are with their own. How long can society continually take from the minority to pay for their special programs? We are quickly approaching the point where it can't go on any longer, but that is another topic.


Oh yes, the top 1% fleeces for a good 50% of government income. Of course since they also have most of the political power*, maybe it's not so bad.

*according to Brian37. It's actually lobbyists employed by commercial and industrial industries, not the rich themselves.

“A meritocratic society is one in which inequalities of wealth and social position solely reflect the unequal distribution of merit or skills amongst human beings, or are based upon factors beyond human control, for example luck or chance. Such a society is socially just because individuals are judged not by their gender, the colour of their skin or their religion, but according to their talents and willingness to work, or on what Martin Luther King called 'the content of their character'. By extension, social equality is unjust because it treats unequal individuals equally.” "Political Ideologies" by Andrew Heywood (2003)


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Beyond Saving wrote:lalib

Beyond Saving wrote:

lalib wrote:

A lot of people will not opt for government sercives (see the differences for opt-in vs opt-out participation). And if the participation is not forced, then it's simply a business.  Forced participation (taxes) theoretically ensures lower distributed costs for goods and services that we all need. 

If so many people don't opt for the government service doesn't that imply that it is not a service "we all need"?

 

In what case has forced participation ever lowered costs? Can you cite a single example where a government ran service that uses forced participation is less expensive than a private business that does the same thing? Now, you can argue that things like fire and especially police protection need to be ran by the government despite being higher cost, but I don't think you can argue that the government is cheaper in any way. I would agree that we do not want a privatized police force (or military), I can go either way with the fire department and I would like to see a hybrid with the school system. 

If people don't opt for a service, it's not necessarily they don't need it at all. Hence my comment about opt in vs opt out procedures. (Basically, if you ask people if they want to not do something vs whether they want to do something, you get more people doing that thing by asking them if they do not want to rather than asking them to volunteer participation) . I certainly would not pay for any service that I wasn't using at the moment. I think the argument is similar to the way a healthy person doesn't want to buy insurance until they are sick, but then there is no point to the insurance, since you are just goin to cancel the insurance once you are healthy. 



Also, I don't think that governments do things cheaper, I said the theory behind it is to distribute costs, making it cheaper for the individual when all are forced to participate, as opposed to only a few participating.

 



The argument that the government does it cheaper (at least from what I understand) is in the sense that who will pay for something if it is voluntary when they don't need it at the moment. So instead of receiving a small amount of funds from a large number of people every year, the gov would get large amounts of money from small groups of people as the service is needed. It doesn't make things absolutely cheaper, just relatively cheaper by distributing costs over the whole population. Granted with large populations you usually get bureaucracies that create inefficiencies, but I think the above is how it's 'supposed' to work. 


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 Well, I was not thinking

 

Well, I was not thinking that essential service would be available on an optional basis. You still have to pay for them but the government has to bill you for them specifically, as opposed to the more common model where you pay into a central fund and then the government get to spend the money in whatever way it feels like (with accounting so obscure that professional auditors can't tell what is going on).

 

Done that way, there is still a need to pay into a general fund to cover some expenses that just can't be planned for in advance.

 

An example of that is my point above where, growing up, my family paid a lower per capita tax because we did not get public water. Actually, that neighborhood is having public water installed this year because it was recently discovered that the insecticides that everyone uses have concentrated in the ground water over the years and well water is no longer safe.

 

Certainly, having some money in the bank for contingencies is better than telling all the homeowners in that area that they have no choice but to pay a one time assessment to tear up all the roads and everyone's lawn to make the connections.

 

However, having most of the cash openly and specifically allocated would go a long way towards limiting waste/abuse/fraud. I could make a fairly long list of known issues with the city budget but let me touch on just a couple.

 

Three years ago, our esteemed (yah one of the most corrupt since mayor Daily of Chicago) mayor submitted a budget that inexplicably shifted funding for fire departments to the Mayor's discretionary fund. When asked, he mumbled something about it being an administrative thing and not to worry about it. In other words, don't ask questions.

 

Two years ago, we found out what the deal was when he defunded nine of our fourteen fire stations. The deal is that despite them all being managed by the single combined 911 system, they are incorporated as six different corporations and he only had influence over one of them.

 

@cj: So you want to talk about how expensive public education is? How about the idea that the city funds public education to the point where all the schools have locking dumpsters **and** locking garbage cans inside the schools so that even the janitors can't determine what is being thrown out. Why do you think that should be?

 

Now I can well understand locking the dumpsters. There are some people who are low enough to use an open dumpster to avoid paying for hauling services. However, keeping the nature of the garbage secret even from regular employees speaks volumes for garbage which needs to be kept from prying eyes.

 

Why should this be?

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Not me gang.

 

 

 

                   Essential services are one thing [fire, police,ambulence, librarys & garbage] but we had a group of pissed off lawyers here  who acted like chilless couples.  They were actually older lawyers who's children had gone through the public school system.  They didn't want to pay school support since they were no longer benifitting from it.   They called themselves the MCLU [Mississauga civil libertys Union] and sued the local government over property tax assesment.

 

 

                    They won based on a simple logic,  "why should I pay school support taxes when I do not have children in school".  Other childless couples have benifitted hugely from the ruling.  Including me. I only pay half of what a breeding family pays.  In fact when the ruling came down in 1997,  Mississauga already owed me 6 years worth of over payments. My check was $14,000.oo,  one of the MCLU guys got back over $100,000.oo.  I'm reminded of this great legal precident today because today is the fiscal due date in Mississauga,  {all taxes are updated today]  so go look at your calanders and tell me why your towns aren't like my Mississauga?

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