It that time of year that we engage in the annual sport of Property Taxes.
As expected, our bill arrived late April. As expected, there was an increase - although this year strangely enough, there was decrease on the total assessed value of our home but an increase in the total amount being assessed (some dark arts involving the loss of some deduction which I can clearly see on the sheet, but I do not understand).
During my usual grumbling and cursing of all things taxes (because apparently even when things go down, they never do) I caught a small comment at the bottom of the page: "The difference between the 2019 appraised value and the 2024 appraised value is 46%".
Helpfully, the next line is "The percentage information is required by Tax Code Section....".
If you run this to ground, of course, it is nobody's fault. The Collection authority points to the Appraisal Board, noting they are only collecting what they are told to collect. The Appraisal Board points to the Entities that set the rates, stating they are only executing the law. The Entities that set the rates (local boards, county government) simply state they are doing what the voters have told them to do. The voters will point out they did not say anything about obscene assessment gains; they blame the Entities for raising taxes too much.
And so it goes. No-one is at fault, but everyone except the home owner is happy to take the result.
46% increase. In no other way has my life improved 46% in 5 years. My salary has not gone up in that amount. Any investments I have have not increased in that amount. Nothing in the real world has gone up 46% in value. I have not lost 46% of my weight (highly dangerous of course, but it is possible thing to lose).
It is bad for the homeowners, who at some point will get pushed out by taxes. It is bad for home buyers, who can no longer afford the very high cost of buying a home (let alone owning it). It discourages home ownership, which was for years was a mechanism for many average folks to build a form of wealth (and stable communities of home owners, by the way). It is bad for renters as well, who feel the downstream effects of rising property assessments (says the man who is now in both worlds).
A significant problem. A serious problem. Yet, one that seems to be no-one's fault or responsibility to fix.
Wait until the loss of property taxes from the business district in each metro area drops and residential owners get hit to make up those losses. All those empty office spaces because workers are no longer there.....those office buildings have reduced values......... who knew TB? The Minneapolis mayor said his proposed six and a half percent property tax for next year may "change".....uh huh.
ReplyDeleteNylon12, I cannot - although I anticipate it as well. We have not yet fully entered the era of declining home values, at least in my area although sales have slowed down a lot.
DeleteOn the bright (?) side, maybe extreme tax rates will finally get some people motivated to change things.
That's the beauty of bureaucracy. It's nobody's fault. The system can continue to grow and devour, but it's never anybody's fault. Hence, there's no way to stop or correct it.
ReplyDeleteWe bought our current home in 2009. That was right after the housing market collapsed, so home prices were great for buyers. Dan and I expected that land prices would drop accordingly, but they never did. Land remained as expensive as ever. I just figured there are to the game that we non-elite are not privy to.
46% is a hefty jump, TB. I wouldn't be happy about it either.
EDIT: I just figured there are rules to the game . . .
DeleteLeigh, the land thing does not surprise me. The same thing happened in New Home, where is a single year they doubled the price of everybody's land. "Because" was pretty much the answer.
DeleteThere are indeed rules to the game - and it is a game. The fact that it is and should not be is bothersome at the least.
Colorado tax bill increase was only 67% after questioning the original 123% increase. Assessed value increased $1,950 a WEEK for 2 years. I feel your pain.
ReplyDeleteWow. That is shocking. I am sure the view from Our Political And Social Betters is simply that we can all absorb it because we are "rich".
DeleteProverbs 30
ReplyDeleteThe Words of Agur
…14there is a generation whose teeth are swords and whose jaws are knives, devouring the oppressed from the earth and the needy from among men. 15The leech has two daughters: Give and Give. There are three things that are never satisfied, four that never say, ‘Enough!’: 16Sheol, the barren womb, land never satisfied with water, and fire that never says, ‘Enough!’…
“In 100 years, we have gone from teaching Latin and Greek in high school to teaching remedial English in college.”
― Joseph Sobran
When I was younger the schools produced young adults able to balance a checkbook, cook a chicken and had a work ethic.
Today they seem idiots that chant whatever some thug tells them at a "Protest" about a situation and place they could never explain if you asked them in private.
Odd we spent far less money per child and had better results.
Michael, I saw the Sobran quote this week. I am not sure if it is a new one or old one, but I like it.
DeleteIt would be interesting if there was a system whereby every year the voters got to judge the results of their spending and react accordingly. Now we are only ever in a cycle of more, more, more (nice call on Proverbs).
Ours has done quite the opposite. Our assessed value has gone up dramatically though our overall property tax bill decreased somewhat. I expect that to change in the future.
ReplyDeleteThe one thing I hate about taxes is that when implementing/passing them, it is always touted that it will only cost you a small amount of dollars and isn't that worth it? Yet they never tell you that you have incrementally just given up more of every dollar you earn and you will never get it back again ever.
FWIW, I am invested in index funds that mirror the S&P500 and during the last five years, it has returned 71%. Since it isn't actively managed, I also only pay 0.04% yearly fees where as actively managed funds pay over 1% per year. If you are getting less than 46% every five years for an actively managed investment, you have some easy improvements you could make.
Ed - In Old Home, I believe our property taxes dropped some years - but overall, it went up. I expect some level of increase, but not something like 9.2% a year. Yes, I know the argument is that "I as the owner will reap the benefits", but that is not a given. Markets go down as well.
DeleteThe incremental argument of taxes - "A small slice only, sir" - angers me. It is disingenuous. Yes, for every $100 it is only $1 - but as my assessments climb more than than $100 every year. Give the real number for the average house in the area and then we can talk.
We switched over our funds in the last few years to an actively managed portfolio (I did okay, but not great). Our returns have certainly increased.
I am reminded of the quote (not sure where from) - the things that come to us all are death and taxes. Certainly, in the UK our tax levels are reportedly at a 70 year high, whilst the productivity of the public sector supported by those taxes is on an inexorable decline, in other words we pay more and more for less and less.
ReplyDeleteWill - Given the history of taxes, it well could have been the Mesopotamians or Hittites.
DeleteThere is a certainly line of argument that says that high tax rates are more acceptable when the benefits are perceived as being worth the exchanged (note the word "perceived"; not necessarily in reality). I suspect that we may soon reach a point where universally the benefits are perceived as being outweighed.
I feel for you, TB.
ReplyDeleteYou all be safe and God bless.
Linda, taxes in general are a winning issue for whatever group champions them. To the extent it has become a non-discussion, I have to believe most sides now see the payers of them as tax donkeys, fit for burden and little else.
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