Outrageous: Our Property Taxes are Taxes...on Property!

Oh, yeah? (0.00 / 0)

Property and income taxes are the way to go, and every political candidate in Montana should me forced make "The Pledge" not to back a sales tax (which will, over time, always increase). Unfortunately, "tourist" taxes are allowed in some towns, which ignores the fact the tourists are only around three months of the year and we Montanans get to pay them all 12 months.
That said, my recent revaluation notice states that my home in Butte has increased in value 84 percent in the past six years, and the only improvement I made to the property was a coat of paint on my garage. And I do not own property on the shores of Lake Berkeley.
A fair revaluation of property state-wide requires and army of professional assessors going door-to-door, but in Montana they'd require combat pay. So it's cheaper (and less life-threatening) to hire a bunch of computer programmers to factor X over Y yielding Z, and hope that no one complains.

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by: JAYoung @ Mon Sep 28, 2009 at 02:16:16 AM UTC

Taxation, to be progressive, must be based on the financial ability to pay those taxes. (0.00 / 0)

Or our you now championing regressive taxation along with regressive health care reform?

Somehow that wouldn't surprise me, not a bit.

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by: Steve W. @ Mon Sep 28, 2009 at 04:11:41 AM UTC

These folks can pay their property taxes... (0.00 / 0)

it may entail moving.

Someone who lives in a house worth $2 million isn't poor. I didn't realize you were an advocate for the landed gentry, Steve.

Fewer taxes paid by people who own $2 million lakefront homes is either more taxes paid by the rest of us or less government and less of a chance of things like single-payer.

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by: Matt Singer @ Mon Sep 28, 2009 at 04:32:41 AM UTC

[ Parent ]

I should also note that I (0.00 / 0)

specifically noted the policy option of circuit breakers, which I think make sense. A circuit breaker is a policy where people don't have to pay more than a certain percentage of their income in property taxes.

But I'm not sure that circuit breakers should be structured to keep $2 or $3 million homes in families for generations untaxed or to ensure that people making hundreds of thousands of dollars are shielded from tax liability. They should protect working class Montanans living in houses in areas where tax rates have gone up in a surprising way or where appreciation has started to hit, but isn't out of control yet.  

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by: Matt Singer @ Mon Sep 28, 2009 at 04:37:51 AM UTC

[ Parent ]

Doyou own property, Matt? (0.00 / 0)

Just curious and would appreciate a straight answer, not some drivel about $2 million homes (let's see, I know exactly zero friends who live or own homes in that range).  Like JAYoung, my LOT went up by 300% in "valuation" with the new re-assessment.  This lot and home are 120 years old, we have done nothing to the lot that could have possibly increased its "value" by 300% and yet we're now told that we'll have to pay the taxes on that "value."  Once again, Matt doesn't get it due to lack of experience, I suppose.  The "value" of something only occurs when and if you sell it.  Otherwise, it's just sitting there, requiring routine maintenance and returning zero dollars to you.  Many people have already been driven off very moderate homes and cabins in the Flathead because property "values" rose so much and taxes followed them higher and higher.  These are Montanans who have lived in or owned these homes or cabins for generations, but have to sell them because of the meteoric rise in taxation.  Right now DNRC is doing the exact same thing with land leases -- and driving people from their cabins because they decided the state should get "market value" for those leases.  In the meantime, people on fixed incomes (oh yeah, Matt, there are a lot more Montanans on fixed incomes than in $2 million homes) are being told they'll have to pay a certain percentage of their income (as per Matt's great idea)for property taxes, another percentage to buy health insurance (which the government will likely take out of their Social Security checks before they ever see them) or face fines and penalties and be criminalized for being unable to do so.

Go buy a house, Singer, and hang on to it for awhile.  Maybe after you get close to paying off your 30-year mortgage you can lecture people on how property taxation works.  Or maybe, by then, you just might decide you, too, are getting ripped off for some amorphous "value" of the home you have no intention of selling.

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by: ochenski @ Mon Sep 28, 2009 at 14:27:31 PM UTC

[ Parent ]

You're right, George (0.00 / 0)

I don't own property, but claiming property doesn't change in value except when it is up for sale is preposterous.

Homes across Eastern Montana are declining in value. Homes in Western Montana are increasing in value. 300% strikes me as unlikely in an urban core, but what do I know?

As for people living in homes for generations, I'm not particularly bothered by folks occasionally having to move. That's the story of human history. It is a personally upsetting and unfortunate one, but I have yet to see the policy package that stops it.

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by: Matt Singer @ Mon Sep 28, 2009 at 20:50:48 PM UTC

[ Parent ]

It's what you don't know that's the problem, Matt (0.00 / 0)

IF you owned a home you would realize a couple of things that ALL homeowners know, Matt.  First, homes don't generate revenue, they consume it.  The first huge consumption is the purchase of a home -- for most people, the single largest investment in their lives.  The second, and continuous, consumption of revenue is called maintenance.  New furnace, new wiring, new plumbing, new roof, new windows, and on and on and on.  That's reality, Matt, not the theoretical realm in which you seem to live so much of your life.  Go ask anyone who actually owns a home and you'll find out for yourself.

IF homes produced revenue, as in the one you're living in which is rented, I'm sure your landlord charges you enough to have a margin to pay the property taxes, the maintenance, the mortgage, and maybe some profit, too.  Either the renter pays the utilities or, since many are rolled into the property taxes, the owner pays for streets, lights, garbage, water, sewer, open space bonds, fire, police, and on and on and on.  There's a tax for every reason imaginable.

The "value" of your home only produces revenue (value) for the owner when and if you decide to sell it -- or take out another loan against it, which will only work if you have enough equity invested in your home already to make it worth it for the bank to take the risk to make the loan.  Nowadays, thanks to the incredible and growing cleft between normal Americans and the incredibly wealthy, older folks are taking out what are known as "reverse mortgages" where you get money from the bank while you're living in your home, but in the end, it belongs to the bank.

You would have probably been a couple years old when Montana had its last property tax revolt in about 1987.  There's another one brewing on the horizon, which Dems have decided to pooh-pooh again.  But running an initiative to freeze property values is not a difficult thing to do given what has happened to those values in the ensuing years.

Here's a real-life example which, someday, you would truly benefit from experiencing.  When Polly and I bought our house in Helena in 1987, the average sale price for a home here was $55,000 -- which is what we paid for the place.  By the time you get done with everything required to take out a 30-year mortgage, you actually wind up paying THREE TIMES that much in interest and principal.  Almost all your payments in the early decades go to interest -- that's one of the primary ways in which banks make money, Matt, in case you didn't know.

Today, the average listing price for a home in Helena is about $260,000 (see: http://www.trulia.com/real_est...  Is my house worth that?  Maybe -- but we'd have to want to sell it and we don't.  We like living here, despite your concept that nomadic jumps from house to house is normal.  In reality, if you like where you live, you're probably not going to jump around a bunch because with every jump comes the whole scene all over again -- closing costs, mortgages, discovering what needs to be fixed, updated, or replaced and, of course, finding out what that particular slice of society may hold in the way of noise, pollution, etc.  So, people who love their homes and have spent a large chunk of their lives enjoying and improving them are unlikely to want to jump around because they are driven out by skyrocketing property taxes. Instead, they are more likely to sign an initiative.

Why?  Well, again consider the real-life experience instead of theory.  When we bought our house the tax bill was about $1,000 a year.  Now, it's over $2,000.  Same lot, same 120 year-old house that was built when Montana became a state.  The difference the doubling of property taxes makes in a monthly mortgage payment (which includes taxes), means you go from about $450 a month in 87 to about $650 a month today.  For you, that may not be a big deal.  But for seniors living on fixed incomes -- or someone who lost their job -- believe me, it's a big deal.  In fact, for many, it's a deal breaker and they're forced from the homes they love into smaller, cheaper, places because they can no longer afford to live where they love.

Go ahead, Matt, check out what I've written with any of your friends who actually own homes.  Unless they're trust funders who had the cash on hand to buy them outright, most people have a mortgage and will experience what we have.  

There are ways to deal with this more equitably and progressively Matt, and you might want to explore some of them. There's the idea that your home stays at its acquisition value until you sell it -- then they tax you on the real VALUE that you got for it, not some arbitrarily assigned value based on what others in your vicinity are getting for selling or buying homes, many of which were bought specifically for speculation purposes.  That, of course, is not much embraced by the ever-bigger, ever-more expensive government crowd.  But for people living in their homes, it's an attractive concept.  

Tax revolts are real, Matt.  Just because you haven't experienced the one we had in Montana doesn't mean it won't happen again.  Keep endorsing the on-going fleecing of homeowners by runaway state and local government spending and you'll likely find out for yourself...and you'll see that it would have been better to address it beforehand instead of waiting for the angry populace to boil over.

     

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by: ochenski @ Tue Sep 29, 2009 at 15:25:14 PM UTC

[ Parent ]

"The Guy from California moves in and relaxes, the locals have to move, they cannot pay the taxes," (0.00 / 0)

If that's what you call "good" then you know even less about politics that I thought, Matt.

Even if that's how you feel, saying so is politically ignorant.

I guess ripping kids up out of their schools and away from their friends and forcing their parents to relocate to impoverished areas with even less jobs is "good" and American in your world. Like everyone needs the "dustbowl" experience or something in your way off thinking?

Somehow I don't believe you have really thought this through.

Or maybe it's that you could care less about others peoples pain? And are not shy about publicly saying so?

In that case, why are you a Democrat? I thought that was the Repos ideology, you know, f*** 'em if they can't afford it.

Saying "circuit breakers" may make you feel compassionate, but their aren't any. Just like you saying "Public Option" doesn't mean squat. You might as well say, "Let them eat cake," because that's the level of comprehension of other peoples problems that you seem to display.

If someone has to move because they can't afford the taxes, then the taxes are regressive, by definition.

Instead of trumpeting your ignorance about how taxes work, you might consider learning about them before you write about them.

I remember when Democrats advocated progressive taxation policies, not "then people should move" policies.

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by: Steve W. @ Wed Sep 30, 2009 at 01:56:48 AM UTC

[ Parent ]

I think people who own homes on Flathead Lake aren't the most sympathetic figures (0.00 / 0)

Frankly, I'd be completely content to build a tax system solely on a progressive income tax. I think that'd be great. I don't see it happening. I prefer property taxes to sales taxes.

I know that George is an environmental libertarian, as far as I can tell, other than his endorsement of single-payer, which would be paid for by defense cuts or something.

But these property taxes are going to fund things like schools. My understanding of the bill that passed is that statewide, the changes in assessments result in a revenue-neutral set of changes on people's property taxes. So if we're cutting some people's taxes on this stuff, we're either cutting spending or we're increasing taxes on someone else.

What's the solution? Fewer schools? Not expanding CHIP? Yelling at me doesn't solve the problem. Yelling at the tax man doesn't solve it either. And saying it is someone else's job doesn't count in a democracy. What's the fix here? Other than, "I'm ANGRY!!!!!!"

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by: Matt Singer @ Fri Oct 02, 2009 at 23:00:47 PM UTC

[ Parent ]

You wrote the piece I responded to, and I think your piece was poorly researched and (0.00 / 0)

poorly written. Your outrage seemed misguided, to me.

To my knowledge, CHIP is funded by the state and by the Feds. Property taxes are collected and spent by the counties.

So I can't see how CHIP and property taxes are related. Perhaps you can fill me in?

I do know that state support for public schools dropped for years during the Repo reign. that caused people everywhere in the state to see exceedingly high increases in their property taxes to make up for what the Repos were cutting.

But that's not what you wrote about. You wrote about how people who were seeing trebling of their property tax bills were somehow a bunch of whiners. Some of these people are working class people, some working class on fixed incomes, and you could care less, apparently. The fact that people can challenge the valuation isn't much comfort if you are working your ass off, have kids, and not much spare time. Apparently you have a lot of spare time and it wouldn't be an inconvenience or big imposition on you to put together a case and show up and present it. You wouldn't even have to arrange for child care, after all.

I don't know for sure what Ochenski's politics are, but they seem to me to be lefty-libertarian, while yours seem to be to the right and to the authoritarian side on the four  axis model of politics, compared to George. That's my guess.

Here's the test if you or anyone is interested.
http://www.politicalcompass.org/

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by: Steve W. @ Sat Oct 03, 2009 at 00:59:08 AM UTC

[ Parent ]

ummm.... (0.00 / 0)

you keep saying these people live on a piece of land worth $2 million dollars.... which they only do if someone would actually PAY $2 million dollars to buy the land, which no one is!  

You're defending a system of taxation that values their land at an amount that no one would pay, but justify the taxes by saying if they don't like it, sell it and move!  

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by: tadamsmt @ Mon Sep 28, 2009 at 17:37:57 PM UTC

You can challenge the valuation n/t (0.00 / 0)

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by: Matt Singer @ Mon Sep 28, 2009 at 21:09:18 PM UTC

[ Parent ]