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Banks pay no property tax on foreclosures?


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2008 Jun 23, 6:56am   27,515 views  320 comments

by Patrick   ➕follow (59)   💰tip   ignore  

On Jun 23, 2008, at 11:49 AM, A Guy wrote:

Long time reader...and, luckily, a renter here. I would like to bounce an idea off of you. I hear that foreclosed properties don't pay prop taxes. Is that true? If yes, then is there any way you can use your contacts/site to support the idea that municipalities impose regular prop taxes on empty houses. This would:

  • increase holding costs, forcing trustee to sell more quickly, driving home values to normalized pricing levels more quickly
  • help neighborhoods by 're-populating' them more quickly
  • reduce the unfair concept that only owner-occupied houses bear the tax burden
  • ultimately deter speculation
  • reduce likelihood of municipalities facing bankruptcy

Your thoughts would be appreciated.

Phil

Thanks Phil,
I've heard that as well, but it's hard to believe, since it would be so unfair that banks pay no taxes while everyone else has to.

The idea of using property tax to keep things fair (and eliminating income tax and sales tax entirely) is an old one, but not yet tried anywhere. Henry George proposed it more than 100 years ago:

http://en.wikipedia.org/wiki/Georgism

I'll make a post out of this.

Patrick

#housing

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267   Peter P   2008 Jun 29, 8:05am  

You are entitled to your opinions. The freedom of speech protects dissenting views, yours or mine.

268   justme   2008 Jun 29, 8:17am  

Lost Cause,

Peter P gets a lot of leeway because he is a patrick.net old-timer, and part of the initial in-crowd. But yeah, most of the time his pithy on-liners are off the chart when it comes to sensibility. I'd write him off as harmless if it wasn't for the fact that impressionable persons seem to have a weakness for these kinds of libertarian free-market self-sufficiency fantasies.

I've met lots of these "Ayn Rand"-type free-market strong-man-fantasy fantasts over the years, and they must get started on their philosophy one way or the other. So it can be important to provide balance and public push-back to their views.

Once In a while I get dragged into a big argument, but I don't always have the energy for it. Maybe the best countermeasure would be to generate lots of pithy anti-libertarian one liners. That might be less work than actually trying to argue the points?

For example:

Free-market police protection? Let me put your 911 call on hold while I run your credit check. Your call is very important to us.....

Free-market drug approval? Please don't blame the market that your child was born with no arms. Rest assured that the company responsible will surely be punished with bankruptcy in a few years. Be patient, they will be held accountable eventually.

269   Peter P   2008 Jun 29, 8:19am  

Welfare, no, that is not a choice. It does not lead anywhere. But all of us would be better off if those folks suffering from a severe lack of good choices could be offered just a few good options.

Eliza, I agree.

Social programs should focus on providing options for everyone to take responsibility. Welfare in its present form is just a way to shift responsibilities. It is not only doomed to failure; it is toxic.

Most view equality as a virtue and that the government ought to inject equality at every opportunity. Here is yet another "backwards" view I have: the quest for equality is futile because it goes against the grains of human nature.

270   Peter P   2008 Jun 29, 8:20am  

Free-market police protection? Let me put your 911 call on hold while I run your credit check. Your call is very important to us…..

Business opportunity! A 911 pre-approval service! :)

See, the market finds its ways.

271   Peter P   2008 Jun 29, 8:23am  

Anyway, I personally think that justme is a very reasonable person and his views are usually very understandable. Together, I hope we can continue to make this blog entertaining. (Yes, infotainment is all the rage. Sad?)

It is rather pointless to actually argue because people invariably choose to believe what they choose to believe. One cannot hope to change their views without changing what they feel about those views.

272   Peter P   2008 Jun 29, 8:35am  

to defer the responsibility of ethical choice to the inanimate ‘market’.

Yes! You have described the core of my meta-ethical belief, that individuals ought to delegate ethical decisions to a self-optimizing, self-organizing system, such as a minimally yet meaningfully regulated market.

If I act selfishly, within the confines of the market, knowing that market actions bring upon the greatest good, I am indeed making a moral decision.

That is our only hope of finding morality out of human nature.

273   justme   2008 Jun 29, 8:41am  

Hmm, why is it that only poor people get labeled as irresponsible. One long-line sentence, possibly pithy:

Securities and banking laws should encourage related-industry leaders to take responsibility for mishandling Other People's Money (OPM), likewise to stop perpetuating their misdeeds by steering their children into positions of power on Wall St, and use their own money to pay back defrauded investors rather than accepting public handouts (bailouts).

274   justme   2008 Jun 29, 8:42am  

Peter P,

Your views are also easy to understand, and in real life I suspect strongly that you are also a reasonable person ;-).

275   Lost Cause   2008 Jun 29, 8:45am  

Welfare in its present form is just a way to shift responsibilities.

Pay no attention to the real problems. Peter P has got it all figured out, with one answer wrapped in a pretty little bow.

For God's sake, people literally die on the streets every day in America, and Peter is worried that some welfare mother is uncompetitive. (Among industrial countries, America has the greatest disparity between rich and poor, and the most poor, high rate of disease and early deaths etc.)

Why do you pick on the poor? Why not pick on the rich and powerful? Do you think that you will make a difference by picking on the poor? All that does is get republicans elected. The only time things ever change is when you pick on the rich and powerful.

276   Peter P   2008 Jun 29, 8:48am  

Your views are also easy to understand, and in real life I suspect strongly that you are also a reasonable person

I certainly don't bite ;)

Hmm, why is it that only poor people get labeled as irresponsible.

Because they are deprived of the opportunity to become responsible. Welfare, in its present form, is the biggest offender.

277   Peter P   2008 Jun 29, 8:53am  

I do not pick on the poor. I do, however, pick on the idea that wealth disparity is evil.

Get real. Humanity has a hierarchy and it will always have a hierarchy. Forcing equality will only create undesirable artifacts.

278   Lost Cause   2008 Jun 29, 8:55am  

they are deprived of the opportunity to become responsible.

People like you think that the privilege that you enjoy is everybody's God-given right. Well, it isn't. There are barriers upon barriers erected long ago of which you are blissfully unaware. There are many, many poor people supporting your consumptive lifestyle. The markets that you love so much lead to monopoly. There is a grip on that monopoly that is not easily loosened. You and your babbling just distract from the real issue of restoring balance and justice.

279   Peter P   2008 Jun 29, 9:14am  

a market must always exist in the medium of a legal system.

Yes, but not necessarily a justice system.

280   justme   2008 Jun 29, 9:32am  

>>Because they are deprived of the opportunity to become responsible. Welfare, in its present >>form, is the biggest offender.

Peter P,

What about rich kids? How do we incentivise them to become responsible? I suppose taking away daddy's money (aka. "generational welfare") is out of the question? Right, that would be wrong, it is known as the "death tax" in the moneyed circles.

281   Peter P   2008 Jun 29, 9:34am  

you, like most libertarians, completely deflate the issue of a legal system as if all we need are some tablets with a few laws and people will just go ahead and follow them without dispute or malice.

Again, I am a Free Market Conservative. Most true libertarians consider me too authoritarian.

A justice system seeks social justice (whatever it means) whereas a legal system protects the integrity of Free Market.

282   Peter P   2008 Jun 29, 9:38am  

What about rich kids? How do we incentivise them to become responsible? I suppose taking away daddy’s money (aka. “generational welfare”) is out of the question? Right, that would be wrong, it is known as the “death tax” in the moneyed circles.

Trust me. No form of inheritance taxation is more effective than the raw power of Free Market.

Trust me.

These rich kids will see their "undeserved" wealth disappear in no time with or without death tax.

283   justme   2008 Jun 29, 9:39am  

Peter P,

Yes! You have described the core of my meta-ethical belief, that individuals ought to delegate ethical decisions to a self-optimizing, self-organizing system, such as a minimally yet meaningfully regulated market.

The obvious problem here, as TOB and LC have expressed in many different ways, is that the so-called Free Market (TM) is neither self-optimizing nor self-organizing. The Free Market is defined by the legal and judicial constraints created by whoever is in power. The problem is that they tend to DEFINE the "Free Market" as the kind of market that operates to their advantage. There is nothing self-regulating about it all.

284   Lost Cause   2008 Jun 29, 9:40am  

Since when was it ever "..in order to establish a free market?" I think the function of the government is primarily to establish justice. Many people also recognize the importance of social justice, and regard it as a basic human responsibility to ensure that it is provided. True, left to its own devices, the world creates great inequality and suffering, but we have our lives to demonstrate what it is to be human.

285   Peter P   2008 Jun 29, 9:43am  

The Free Market is defined by the legal and judicial constraints created by whoever is in power.

Then it is NOT a free market, isn't it. :roll:

(Yes, Free Market is really a unicorn.)

286   Peter P   2008 Jun 29, 9:51am  

Social justice is just another unicorn.

The world is always unjust for the bottom half. I suggest everyone to understand the true nature of humanity.

but we have our lives to demonstrate what it is to be human.

Ha! I really don't know what you think of humanity. To say the least, we all deserve Hell.

287   Peter P   2008 Jun 29, 9:56am  

Well, at least according to politicalcompass.org, I am not very libertarian.

I certainly will not try to appear intelligent. That word has no meaning to me. I prefer material results. I am still a total failure at this point.

288   Peter P   2008 Jun 29, 10:10am  

WHAT IS THE BASIS FOR YOU MARKET REFORMS?

Greatest aggregate utility. I share some root with utilitarian moral philosophy.

289   Peter P   2008 Jun 29, 10:16am  

For all.

There is a big difference between the greatest number of people and the greatest aggregate utility for all people.

290   DennisN   2008 Jun 29, 10:33am  

Oh dear, it's tense in here. How about some humor to tie together the topics of food and the Heller decision?

I was fiddling around in my kitchen and discovered that rigatoni has a nominal 9mm bore, along with spiral grooves resembling rifling.

I therefore propose that in the future rigatoni be known as "pasta Scalia".

291   Peter P   2008 Jun 29, 10:36am  

LOL!

292   Peter P   2008 Jun 29, 10:37am  

Rigatoni is best with mushroom and meat ragu. :)

293   OO   2008 Jun 29, 11:02am  

Peter P,

nothing wrong with wealth disparity as long as you can feed the bottom strata and keep them sheltered. Provide for the basics, and you can be as rich as you want.

This was the case for the last 20 years or so, just that we are slipping away from that. My grandparents were filthy rich in China, and my great grandfather was once the largest land owner in a major coastal city. Guess what, the wealth distribution got so out of whack there that the bottom strata could no longer take it. If you don't give them a bit of socialism, they retaliate with communism, and my grandparents had to flee the country with bars of gold leaving most of their fortune behind. They were the lucky ones, some of their friends and family got executed with all their money confiscated.

People can turn into mob when luck is decisively stacked against them. A little bit of socialism is the best to keep the status quo which benefit most of us here, because we are doing infinitely better than most of the world's population. I don't want to take away that last bit of hope for those who are so unfortunate that they may want to rock the boat so hard to leave me destitute, through a violent revolution.

So I am ultimately selfish to part a little bit of my money with the disadvantaged, so that they will be kept satisfied where they are. They won't come after my asset while I keep on climbing my social ladder. You can't push people to corners leaving them with no options, leaving them some options means leaving myself with far more. Simple as that.

294   Richmond   2008 Jun 29, 11:03am  

Hi all.

Boy, feel the love in here tonight.

I don't mean to sound like some shmuck in a 10x10 cabin, but what do government and laws have to do with "justice"? Justice will always find a way regardless of the laws. It may take a while, but it will.

I'll use ragu as a base, but I always have to doctor it up quite a bit.

295   OO   2008 Jun 29, 11:04am  

oops, why am I still being moderated?

296   Peter P   2008 Jun 29, 11:13am  

Approved!

297   Peter P   2008 Jun 29, 11:18am  

TOB, you remind me of the giant chicken, always fighting with Peter for no reason. :lol:

298   Peter P   2008 Jun 29, 11:21am  

nothing wrong with wealth disparity as long as you can feed the bottom strata and keep them sheltered. Provide for the basics, and you can be as rich as you want.

Or, we can help them feed themselves. I am not fundamentally against welfare so long as people are incentivized to eventually take responsibilities.

On the other hand, I think every person should be given the opportunity to become successful. While it is not possible to ensure that all receive the same equal amount of opportunities, it is just wrong to systematically keep the poor poor by means of welfare.

299   Richmond   2008 Jun 29, 11:44am  

"---- systematically keep the poor poor by by means of welfare"

There is alot to be said for that statement. You all know that I'm a working class stiff. When I was just starting out, I don't know how many years I worked full time for less than a welfare mom. If I needed more money, I studied, worked and made due. It eventually paid off.

When I was at Richmond High, I remember girls talking about their mothers wanting them to have babies to up the check amounts. That's so sad. Never did I hear them say that they wanted to go to college. I don't think that it ever occurred to them that they could. It was a generational lifestyle. That's not to say that we didn't have great success stories, we did, but a large section of the population accepted the life that they had been handed and never knew that things didn't have to be that way.

300   Peter P   2008 Jun 29, 11:52am  

If I needed more money, I studied, worked and made due.

That is true beauty of the American Dream. Thank you.

but a large section of the population accepted the life that they had been handed and never knew that things didn’t have to be that way.

It is sad. As I have repeated many times, welfare is the best tool for sustaining poverty.

This country needs faith. I am not talking about religion. People should have faith in themselves. They must believe in themselves because they are the best providers for themselves.

301   Peter P   2008 Jun 29, 11:54am  

I really admire Oprah Winfrey.

It is not wrong to be rich. It is not wrong to be poor either. It is wrong not to break free of your own limitations.

302   Peter P   2008 Jun 29, 11:55am  

Peter may make logical sense to a point, but hes singing hopelessly out of tune.

You are lucky that I am not singing...

303   Peter P   2008 Jun 29, 11:57am  

Monopolies never last. How many Dow stocks in 1900 are still Dow stocks today?

With today's speed of information flow, monopolies are especially shot-lived.

304   Peter P   2008 Jun 29, 12:00pm  

Also, many monopolies could be maintained mostly because of high entrance barriers in their respective industries.

I wonder how much over-regulation has to do with these entrance-barriers. :roll:

305   Peter P   2008 Jun 29, 12:01pm  

I love Microsoft. I admire Bill Gates a lot.

Disruptive technologies bust monopolies faster than any trust-busting bureaucracy.

306   Peter P   2008 Jun 29, 12:04pm  

This is the truth: you are your own greatest limitation.

Not self-empowerment advice

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