My Corner of the Web
There are a lot of angry people out there at this time of the year. My neighbor gave me back some of my mail yesterday that was incorrectly delivered to her house. She was angry about her property tax bill being raised so much. I have not seen the new Virginia assessment but my property tax assessment on a rental house in Arizona rose $20,000.00 last year and the same amount this year!!
Just tonight I read this story, about homeowners revolting over the huge property tax increases. I am amazed at how mundane the solutions are to the problem: cap the annual tax rate, redo assessments or lower the rate slightly. To me, this avoids the real problem. We subsidize Fannie Mae and Freddie Mac to increase home ownership, yet property taxes make a mockery of the very notion of property ownership. If you buy a computer or a new TV, does the manufacturer come back to you and ask for 1-3% of the price each year until you die? If that happened, would you really believe you "owned" the TV? Heck, No! You would say, I'm renting it. So, why do we allow taxes on property for the rest of our lives when we supposedly own it? You think you own it ... well, just try and stop paying property taxes and see what happens.
Here is my solution: similar to the FICA Cap, we should create a Property Tax Cap that uses the same duration as our most common mortage: 30 years. In other words, if you stay in the same house and pay taxes on that property for 30 years, you are then done paying taxes on that property and own it free and clear. That would be a huge incentive to remain in one place and create stable, vibrant communities. Additionally, it would certainly cover the cost (and beyond) of families sending their kids to school (where most property taxes go). Why should seniors be penalized to pay property taxes for schools their kids no longer attend? Of course, if you did not stick around 30 years, then the property tax "resets" in any new residence you have so most people would still be paying property taxes all their lives ... but at least the option would be there for you.
So, I hope to see PropertyTaxCap.org soon up and running and I'll be the first in line to sign the petition ...