It has become glaringly apparent that my reckoning of the components necessary for a civil society differ somewhat from the local norm.
Accordingly, I’ve been asked on numerous occasions why I haven’t ventured an opinion on the “property tax crisis” in Indiana. The reason is quite simple.
I’ll join the discussion when there is as much emphasis on responsibilities as citizens as there is on rights as taxpayers.
Let me know when this happens, will you? Until it does, there just isn't much to say.
The fact that the wealthy, multiple property owning real estate professionals leading the tax charge locally aren't stricken with a crisis of conscience is commentary enough.
ReplyDeleteWhat is the problem with owning multiple properties, being a professional or being wealthy? You make these all sound like injustices, bluegill. What crisis would you like them to have? Is it offering housing to lower income families or wishing that their money not be redistributed to those families?
ReplyDeleteDaniel,
ReplyDeleteI do not think that these "wealthy" people are being highlighted as be injust.
I think the point here is the fact that they are raising the biggest amount of holy hell, screaming and decrying the unfair system that they in fact have CHOSEN through their own actions to owe more to than the average Joe Taxpayer.
Now all of a sudden they are "rallying" against this unjust and unfair system. They are all screaming and kicking, but few are willing to list feasible ideas to replace the revenue that will be lost.
When all along they have had a solution to reduce the burden of the tax that they face, sell of some of the properties that they own that are "extras". Problem for them is solved.
How many AVERAGE home owners do you see parading around with let us vote now signs? Not many, why is that? Joe Hoosier thinks there are more important issues that need to be handled other than tax breaks that will favor the wealthy who own entire nieghborhoods, while frankly doing not much for lower income families other than taking monies away from all ready strapped public education.
According to the article in today's Tribune:
ReplyDeleteThe governor’s proposal would cap homeowner property taxes at 1 percent of their home’s assessed value beginning in 2009. It also would cap rental property at 2 percent and business property at 3 percent.
I've yet to hear a coherent explanation, during this or discussions of similar topics, as to why a rental property is different from a "business," and merits a reduced rate.
Of course, other than the fact that the slumlord lobby desires it to be so.
Anyone?
Roger,
ReplyDeleteI think you have effectively answered your own question.
The Harrisonites and their unrelenting lobbyist techniques are all that is separating a rental property from a business property.
But we have to understand, there are those in that group who feel they are providing a valuable social service to the poor by renting them unmaintained, dangerous properties at a inflated monthly rent rate.
(disclaimer, not all landlords are slumlords, there is a significatn difference, Lord knows I do not want to leave out the disclaimer
I'll take a stab at it. Of course, I'm just guessing.
ReplyDelete2% on rental property--I think "home" is the reason. It is a renter's home and the idea is that even higher property taxes just filter down to the renter. Not so much a tax break for the landlord but for the renter, so the renter can have a "home".
It's not 1%, just in case they are wrong about the landlords. It's not 3% just in case they are right about the renters.
good points Hoosier
ReplyDeleteDaniel,
ReplyDeleteOwning multiple properties, being a professional, and being wealthy do not constitute injustice. The methodology used to attain those respective positions, however, sometimes create injustice.
Aside from the humanitarian concerns inherent in many of those methodologies (which, as a Christian, should be paramount in your worldview), the economic argument is rather simple.
Irresponsible property owners, particularly when they own multiple ill maintained properties, contribute greatly to social problems, thus requiring greater governmental intervention and expenditure.
Poorly maintained properties, especially when concentrated as is the case in New Albany, a)lower the value of surrounding properties b) create public health hazards and c) attract the criminal element.
Point A decimates the preexisting tax base. B and C require increased public spending via health departments and other health services, building and public works departments, and fire and police protection.
It's a point that bares repeating: Irresponsible property owners acquire wealth by increasing the need for public services while simultaneously lessening the shared tax base from which we collectively remunerate those services. It's as much a welfare/subsidy system as any social program that cuts checks directly to recipients.
As a conservative and advocate of personal responsibility, surely you can understand the concept that those who create problems should be held responsible for eliminating or solving them.
Instead of accepting that responsibility, however, the response thus far from the irresponsible landlord contingent has been to seek not equitable solution but rather further tax subsidy of their particular type of business.
Offering housing to lower income families is only valuable if that housing is safe and well-maintained. For those that truly wish to do so, numerous tax breaks are available under our current system.
The landlords in question choose not to take advantage of them, however, because they require inspections to ensure that the properties offered meet minimum maintenance standards. Their properties often do not (or soon won't due to lack of maintenance) and they have no intention of doing the work necessary to meet those standards.
Those landlords are not serving the poor. They're taking advantage of them with full knowledge that lower income residents have few other options and lack the financial and/or educational wherewithal to mount successful legal challenges.
It's unethical, unfair, and increases the tax burden on all of us.
Unfortunately, our local real estate association has chosen to remain silent on nearly all the above concerns, making it all the more difficult to accept when they suddenly spring to life in defense of the very same corrupt, tax draining, wealth building scheme many of their members have helped propagate for decades.
But we have to understand, there are those in that group who feel they are providing a valuable social service to the poor by renting them unmaintained, dangerous properties at a inflated monthly rent rate.
ReplyDeleteHere's my theory: real estate sales are tight and it is difficult to flip houses, so it is more difficult for the urban parasites to make money selling houses. Property tax increases cut into another significant source of real estate revenue - rental housing.
So, if you rely on flipping and slum letting as a significant portion of your income, property taxes exacerbate your income stream at the moment.
The parasitic wing of the real estate profession involved in this charge are upset about losing money. This talk of providing "affordable housing" is nonsense. It is always possible to make a little less profit, rather than raising rent, if one is concerned about affordable housing.
I am in no way condoning slum lords that do not maintain their property. I heard a great man speak tonight that said property tax equates to a rental fee paid to the government, every month or year for the rest of your life. How is that fair to to home owners that have paid their mortgages off and still must pay $400 per month tax on a fixed income? Penalize slumlords for their mess, not for owning the property.
ReplyDeleteSodrel's rental fee analogy is bogus.
ReplyDeleteAsk Mike what gives property value. Without public investment surrounding it, it generally has none. Take away the roads, the utilities, access to schools, and police and fire protection and you've got property attractive as a nature preserve and not much else.
The value created by public expenditure (and the ability to liquidate it on the open market) doesn't go away when the mortgage is paid off.
If the private sector should be responsible for all those things, ask him how he personally plans to pay for the bridges project that he supports. Why should we subsidize that? Aren't I being forced to rent something I don't even want? And aren't we using tax dollars to pay for his trucking firm's government contracts to boot?
You may want to be careful with the numbers your throwing around as well. In order for someone in Floyd County to be paying $400 a month in property taxes, they'd have to be living in a home valued somewhere around $250,000. They've made a housing choice that's well over twice as expensive than the median. Why does the concept of personal responsibility not apply to that choice?
Didn't they know they'd be living on a fixed income? A lot of people downsize in preparation for retirement and fixed income. The federal government even provides a one time tax break so older people can sell their homes without paying capital gains tax for that very purpose. Why didn't they take advantage of it?
If a lower income person accepts a variable rate mortgage with lousy terms and ends up in foreclosure, a lot of conservatives would say the home buyer is to blame for poor decision making. If a wealthier homeowner makes a housing choice they can't afford, why does someone else have to shoulder the blame?
Re: making slumlords pay
When an attempt is made to do so, I can just about guarantee you that someone on your political team will start complaining about "big" government interference in the market. Can I count on you to show up to speak in favor of increasing rental property code enforcement efforts?
I saw Sodrel whipping out on Pearl Street in his HUGE Chevy Suburban Gas Guzzler, cutting off some other motorists and then sat carrying on a conversation with an "constituent" outside the NA republican headquaters whilst holding up the traffic behind his suburban.
ReplyDeleteIn my humble opinion Sodrel is only interested in redeeming the face that he lost by the majority of the voting public in this district who fired him for being a puppet to the agendas of the bush administration.
He only waxes poetic about property taxes because he is trying to muster votes for his next campaign, or could it be that he does not want to pay his dues for his home(s), trucks, businesses, buses, etc?
Is it not possible for someone in downtown, say on Depauw Ave or the like, to have lived in their house for 30 years, paid $50,000 for it, diligently paid it off, and now owe crazy taxes every month? Don't say no, because I know better. I know this blog is extremely left and I am its whipping boy, but give me a break.
ReplyDeleteTell me Mr. Short in your extreme right position;
ReplyDeleteSay we rid ourselves of this horrible beastly and oppressive property tax, where then sir will we replace the funding for our public schools from?
Please cite funding options that are not avoidable, that are not volatile?
Tell me Mr. Short, where are the droves of John Q. Hoosier who are in the average priced home of $80k or even less demanding for tax relief from their $350 per year taxes on their home?
Why are the only ones who are making the most noise about this the ones with the HUGE overly expesive homes, or dozens of rental properties? And is it NOT true that the ones who are making the most noise in the names of looking out for the "poor" the same ones who completely refuse to support measures for universal health care, educational benefits, and other programs that would more directly benefit the "poor"?
Daniel,
ReplyDeleteYou have to compare 70s prices to 70s prices, not those now. $50K for a house in New Albany in the 70s was very expensive. There were very nice homes all over town on the market for half that at the time.
Only someone with a high income could've afforded such a luxury and would've paid much more in property taxes based on their choice to do so then, the same as now. And, even now, few if any homes on Depauw are currently selling or assessed at $250,000.
Again, why would someone with a level of disposable income much higher than most of the population not have planned better for retirement? Do they bear absolutely no responsibility for their choices? Are you telling me that it's unreasonable in today's market for someone who undoubtedly enjoyed above average income for much of their career to spend $400 a month to live in a large historic home on one the nicest streets in town?
It's not unnoticed that you've avoided the personal responsibility question altogether as well as several other points made.
Beyond that, it may surprise you to know that property taxes in New Albany used to be calculated at a much higher rate than they are now. Even with trending, we pay less per assessed value than the locals did even during the Depression.
Property tax rates have not dramatically increased over the past few decades. They've actually decreased over that stretch and Indiana ranks low nationally in terms of the average tax burden on citizens.
There are some significant downtown realities whether we want to confront them or not.
ReplyDeleteFirst, the poverty level and desperation level of many folks in the downtown is rising. As I've said, Soup Kitchens have doubled in the number of people being served and the amount of blankets we have distributed this year is staggering. The poorer folks in the community are often living in substandard housing that they are renting and are struggling. Those who are paying their own heating bills and gasoline for the cars have been devastated.
As a Christian, the number one social ill that Jesus addressed was economic injustice. In the Gospel of Luke Jesus demonstrates little regard for money and is rather harsh to those who have it. Most especially to those who have it and do nothing to alleviate the suffering of the poor. For us, as a church, we are trying to use the Bible to help drive us in our ministry so we've increased outreach. Unfortunately much of what happens in Christianity right now is coming to particular positions, left or right, and using out of context quote from the Bible to justify those positions.
Here, to me, is the dilemma.
President Kennedy, when he was running for office, often said that "A rising tide raises all boats." His premise was that economic prosperity that helped the wealthy grow wealthier provided more funds in the community and those with money gave generously to charities and hired lots of people in their businesses. The concept of supply side economics tended to flow from this.
The problem was that Kennedy was speaking to the World War II generation when people sought to work together and care for one another. When President Ford died, people spoke of his great civility to people of all beliefs and backgrounds. This was common of the folks from that generation. Mutual respect and caring for one another was something that took place on a regular basis.
Society has changed. The rising tide is no longer raising all boats. The rising tide benefits those on top and swamps those on the bottom. Society has become increasingly 'me' center as opposed to 'other' centered.
We've seen the usage of the word 'personal' increase in Christianity. Personal relationship with Jesus. Personal spiritual growth. Personal responsibility. All nice, except this is not a Biblical concept. The word 'personal' is used only a hand full of times in the entire Bible and never in terms of relationship, growth, or responsibility. What frightens me is that Christianity is becoming more and more 'me' centered and missing something huge.
Part of the problem is that much of what passes for the modern day conservative movement is trying to link the philosophy of Ayn Rand with the teachings of Jesus. They are, however, the antithesis of each other. Rand had nothing but contempt for the teachings of Jesus and put no stock in religious faith.
In the Book of Genesis Cain asks God a question. "Am I my brother's keeper?" The rest of the Bible answers the question and the answer is 'yes.'
So, from my perspective, I have a responsibility as a person of faith to the wider community and most especially to the poor.
Classically, the conservative approach was for the rich to care for the poor and provide generously to those who worked for them. Milton Hershey who was incredibly wealthy had the Hotel Hershey built during the Great Depression without heavy equipment so that they could employ more people. It was a great premise and it worked. We don't see people do this kind of thing any longer.
Classically the liberal approach was to provide social programs and use tax money to fund these. It was a way to keep the bottom from falling out from people who had little. Ultimately those who had money were forced to aid those who had little, whether they wanted to or not.
My conclusion is this. Those of means have to assist those without means. To me, this is a mandate of my faith. How it gets done is of little consequence, only that it does get done.
Like it or not, we rely on taxation to do this. Unless the climate changes dramatically and unless we see a shift and see people not only take personal responsibility (Ayn Rand) but also, responsibility for all, (Jesus), we are stuck with what we have.
I have some caveats to my last post.
ReplyDeleteMilton Hershey also left the controlling interest of his company with the Milton Hershey Academy which was a school for orphans in need of a great education. Hershey didn't want the company to close the school upon his death. Hershey, who was himself an orphan, had a special place in his heart for those who had been orphaned.
There is much that I do admire about the man. I continue to enjoy is products. He was, however, an overt racist. Some dismiss this as him merely being a person of his day. Perhaps. He was, however, often the antithesis of many of his era and his racism is greatly disturbing.
My second caveat as this. At the time of Hershey, some of wealth were like him, but most weren't. Our culture, at that time, was very starkly rich and poor and the poor were doing very poorly. It was a time period in American history when our system was a pure capitalist system....and it ultimately failed. The collapse of the Soviet Union demonstrated what happens when you have purely socialist system. It ultimately failed.
All of which means that people living together is a pretty complex dynamic.