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In many cases, governments are having difficulty collecting property taxes on foreclosed homes due to issues associated with foreclosure process. Determining the actual owner is in many cases difficult
I think NOVArenter got it right. Property taxes may not be paid on foreclosed properties, but they are not exempt from such taxes. It's getting the right warm body with a checkbook that's difficult.
A more interesting topic would be "who actually is the owner of a foreclosed property?"
What we loosely call a "mortgage" is actually two parts. (1) A security instrument called a "mortgage" or (in CA especially) a "trust deed" (2) A "note", aka an IOU. While FBs may send checks to BofA or WAMU, they merely service the note and aren't the real owners. I'm guessing that people who own shares of an MBS have an "undivided property interest" in any given foreclosed property. How in heck would an assessor send a bill to hundreds of owners of these MBS shares? :?
Duke,
Are you sure that the counties cannot force a sale? I know that some counties have tax lien sales. Is that the selling of the lien or the property with the lien?
Patrick:
When you are making your Georgism post, please takes this into consideration: Currently the US Budget is $2.6 Trillion (Give or take another runaway Congress/President). The land area of the United States is 9.2 Million Square Kilometers, or about 2.3 billion acres. Realize that the Feds, the States, Native Americans or some other non-taxable official entity owns about half of that (remember Alaska is mostly Federally owned, and nearly half the West is as well) and you come up with figures along the line of yearly taxes of about $2,300 an acre, which is, for most of the land in the US, around twice what it is worth. "What it is worth" is, for ag land, something like ten times net annual revenue.
Ever hear of "Farming"? Georgism just put American Agriculture out of business. Or else that loaf of bread is gonna cost $10.
Oh, and Manhattan ($$$$$$/Sq Ft of economic activity) should be taxed at the same rate as Nevada dry rangeland (1 cow per 80 acres, maybe)?
I look forward to your essay.
California doesn't have ag land anymore. We have "Urban Reserve" upon which we grow stuff. :)
But at least in California, we do have the Williamson Act. If you are truely ag, it does provide some relief.
Hi MST,
nowhere does Georgism say that all land should be taxed at the same rate. It definitely should not be. Farmers should pay much less than Manhattanites.
As for setting the "right" rate, one proposal is simply to let people pay what they want and make that payment a legally binding offer to sell for 50X that amount. So the tax rate would be 2%. But then of course people would be upset that richer people could buy their land.
If you want to own the property for a long time, you could perhaps try to pay the tax in advance.
Maybe you have a better suggestion for how to set the land-tax rate?
Richmond:
Yeah, I didn't even mention State and Local taxes being "Georged" Converting that extra burden to a "flat" land tax would push a much higher local burden onto ag than it carries now in property taxes. Just multiply my above statement by another factor of two or so.
What folks don't realize because most of their time is spent inside "Urban" areas (I'm in Backbay Boston), is that only 3% of the US land area is urbanized. This figure is based on the US Census defiition of "urban" as incorporated entities having a population of more than 2,500 people, so it is not talking about Manhattan and L.A. vs. the rest of us; it amazingly captures the majority of people's residences in the US. Most of the rest of that area is either exempt, or ag or fallow. Under a "pure" Georgist tax burden, that fallow and ag land would very quickly revert to Government ownership because nobody could afford to pay the taxes, and therefore nobody would buy the land after the government repoed it for non-payment of taxes. You can work out the consequences to the "fair" land tax for the remaining private land ownership.
I don't think even the Sandinistas planned that radical of a land-redistribution scheme.
Don't get me wrong, I think Georgists have some great arguments, and if the country had been Georgist in the beginning, we would probably be better off, all other things being equal. Which is a huge assumption.
But we live in this world, not Oz: to be workable (meaning we don't starve), Government could only raise an amount of revenue from that ag land that gives the owner a reasonable chance of making a profit, therefore, a strict Georgist plan would require at least a 90% cut of overall government tax burden, eliminating entitlements, reverting to a pre-Civil War Government size, and implicitly meaning a complete retirement of the National Debt, and therefore a complete reconstitution of money. All of which tells you where the real problems are.
I may be all for all the above, but it's not going to happen in this reality.
Flat Tax, baby!
TOB,
Yes, I think we can rename taxes as "citizenship fees". That ought to do the trick.
I think there are some cricumstances where they can have a tax lien sale. For example, the IRS comes after you, wins, and starts tacking stuff.
Or in porbate, I think? A person passes away, they have no will, their property has back taxes. Then I think the county can sell the assett to cover their taxes.
But force you out of your home as a tax lien? Or sell a home owned by a bank (or a tranch) to collect taxes? I am 99.99% positive they cannot do that.
Ah, Patrick. Missed that last post before I punched the button.
OK, so how does one determine what rate the land would be taxed at? There might be different formulas, but it would strike me that all must have something to do with the economic productivity that land is supporting, which as I see it, logically rolls right back into a property tax regime. That's how local taxes on ag land work, at least the ones with which I'm familiar. That's what a housing PT is, being based on "market" value of the house. And much the same with Business PT, based on the market value of the street frontage, or the value of the equipment, which has a correlation with how economically profitable that equipment can be.
Georgism taxes at "unimproved" rates, but doesn't that simply shift designation of where the tax is assessed? The value of Manhattan "unimproved" land is directly tied to the economic activity that can flow from the improvements that can be put upon it, ne pas? i.e., it has no economic value unless the improvements are put on it, or someone anticipates putting them on it, yes? Same thing with ag land, as that cow on the Neveada range land leads to tax rates of maybe $10 an acre a year, if that, which again is property tax, not a land tax.
Of course, Manhattan "raw land" is not unimproved in the first place, as the vast supporting infrastructure is already there, ostensibly already paid for.
Sorry, I'm obviously not an economist, so some of the subtleties escape me.
Yes, I think we can rename taxes as “citizenship feesâ€. That ought to do the trick.
Sure, let's have a per-head fee. This is way more extreme and "regressive against the poor" than the flat-tax I support.
Fees are charged according to needs. Taxes are charged according to abilities.
It is easy to see why Marx would want highly progressive taxes instead of fees.
It's only a flesh wound... the April Case/Shiller numbers (PDF) are out. Miami is burnining, Cleveland is turning, and the SF Bay Area continues to slide downward.
TOB,
I'm sure the government would be happy to accept extra taxes from you slotted for over-regulation. You should contact them to work out an arrangement.
what is wrong with having all roads as toll roads? You're paying more now for roads in your taxes than you would paying for toll roads.
Also, what is wrong with paying a subscription to police and firemen? Those who choose not to have coverage can decline the offer.
I can't really see a problem with that scenario. Again, TOB, if you feel that this causes injustice on the poor who cannot afford some of these things, then you are more than welcome to pony up their fees for them.
Is your point on where to draw the line of voluntary versus required payments? If so, then military protection is a good place to start.
As for basic individual human rights, such as ownership of property, libertarians happen to regard those in the highest manner.
why not have
Good ideas!
We need to have platinum and diamond levels too! :)
Re: subscription-based military
How about this...
All future wars will be fought on computer war games. The losing side is to execute a number of its citizens. The probability of being selected for liquidation will be according to your subscription level. The more you pay, the less likely you will be picked.
The integrity of the whole system can be backed by MAD.
Is this just Star Trek (A Taste of Armageddon) with a twist? :)
"really? is a judicial system a subscription service too????"
of course not. You need to pay someone with all that human right subscription money coming in.
TOB, out of curiousity, what are your feelings on health care?
Is that a basic human right? Should the government be paying for it?
Abolish all socialized health care in this country and costs will come down in no time.
Gimme me the country club membership, which I don't already have, and we will talk again.
awwww, TOB is sad he only get's a bronze.
sniffle. sniffle.
Don't worry TOB, once health care and all your precious over-regulation and never ending socialist programs collapse this country in massive unrecoverable debt, and a libertarian society grows out of the ashes, I will let you mow my lawn in exchange for a silver subscription.
So where do you stop on the way up?
I propose that we would stop on the way down at military defense. I think it's necessary and required to uphold a society. Therefore, involuntary requirement to pay for.
Where would you stop on the way up? If not health care, then where? Should my government be feeding me? Should it be bathing me? Should it provide me a car and a beach house?
Why do you act as if anyone gives a fart about your opinions regarding economic planning?
they have no such opinion!
And they certainly don't expect those going through puberty to be interested in any such discussion.
I for one am not suggesting we do anything. It will come to us naturally. At this point, just continuing on exactly as we are for another 12-15 years should do the trick just fine.
I’m not suggesting a massive overhaul of our entire legal and economic structure...
Because someone already did just that in the 1930's.
Many would argue that the Great Depression lasted so long mainly because of the New Deal.
It has been proven time and again that welfare creates and sustains poverty.
don't worry. We'll be starving and dying soon enough. But for now, lets get me some a that unemployment! Woohoo!
You are so ON today TOB! It's amazing. You said fuck & d-bag!
I wish I had your wit, and clever debating skills.
oh wait, I said debating. I wonder what TOB will do with that one! I can't wait!
Anyhow, we are essentially talking to a prepubescent child at this point Peter. He can't even put together a point while sophomorically attempting to personally attack us.
Time to get back to work.
@Patrick
As for setting the “right†rate, one proposal is simply to let people pay what they want and make that payment a legally binding offer to sell for 50X that amount.
Interesting proposal. As long as there is preferential treatment of different borrowers however, this is an unworkable scheme, and there would still be a lot of credit-driven speculation as developers with deeper credit access try to buy and flip properties out from under individuals who have less leverage in the credit markets.
How about something along the lines of in order for the offer to be legally binding, it has to be backed by fee-simple, unencumbered capital. That is, the payment is in pure, unleveraged capital, which generates no lien or payment or conditional claim upon the property anywhere. An amount equal to 20% of the offer, also in unencumbered capital, must also be put up, to go into escrow for 10 years. During that entire time, the owner who was outbid or any third party is free to challenge whether or not the offer was paid with unencumbered capital.
The owner who was outbid can terminate the escrow early by filing a declaration. They can accept a payoff if they want.
If it is proven that the offer was paid with any kind of credit-based transaction involved, then the deed reverts to the owner who was outbid, that owner also gets to keep the payment, and the escrow amount goes to whoever showed proof that the payment was funded by or conditioned upon some kind of credit.
I know that when I used to buy VA foreclosures, the VA had paid the property taxes. In the escrow I would then have to pay my prorated portion. I don't see why banks would be any different. I doubt they are.
Owner occupied homes get a small exemption off the valuation. If I'm not mistaken it is a flat $7,000 reduction of the value.
Question: What is to Liberitards as Surfer-X is to Baby Boomers?
Answer: The Original Bankster.
Bankster, you are having another one of your peak days. May you have many more.
Who was it that wanted to stand in line with me for a new Jetta TDI Clean DIesel?
Was it EBGuy, or Duke, or ? I'm sorry I forgot.
Whoever it was, here is big news: The Jetta TDI Clean Diesel is here! in fact, I drove one personally today at Boardwalk Volkswagen in Redwood City, CAlifornia. It's a great car, and it is going to be very energy efficient. Apart from the big and costly Mercedes E320 Bluetec Clean Diesel, this is the only California-clean diesel car available. May there be many more. The 1.2L Diesel+hybrid will be even better (70MPG), but you will have to wait a while.
Unfortunately, the sticker only lists mileage as 29/40 MPG, but I think the real numbers will be around 40/50 MPG if you drive carefully. If you believe the gauge, I was getting 50MPG easy while going 35MPH on the frontage roads of HW-101.
So far Boardwalk only have the one demo car, but they are getting 20 more in about 2 weeks. The sportwagon version is coming in september (this is the one I'm considering).
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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