Registered: Jan 2003
Local time: 09:20 AM
Property taxes rising nationwide
|With people starting to receive their 2005 tax bills, the levies are squeezing the middle class and senior citizens - leaving them less to spend on everything from restaurants to roof repair. There is also concern the taxes could particularly hurt the home-buying chances of the young or civil servants such as firefighters. States such as New Jersey now have grass-roots efforts - verging on revolts - for reform.
Part of the problem lies in demographics and the rapid growth of exurban communities. Young couples who can't afford suburban homes have moved to "edge" communities further from the cities. Those are filled with children, and to educate them the communities have to jack up property taxes to build new schools and hire teachers.
In many states, the tax bite is finally causing taxpayers to bite back. For example, in New Jersey, a grass-roots group, Citizens for Property Tax Reform, says it has 500,000 participants after 15 months of existence. The group's mission is to force a property tax reform "convention."
I've been thinking about taxation a bit recently and it seems to me that it should be possible to avoid such jacks in taxation and still collect the money needed to operate. What struck me is how many times the same money is taxed during the cycle. The government in some form (local, state or fed) ends up with a cut of nearly every transaction that takes place. Consider the following:
1) You work hours on a job, employer pays you.
2) You pay income tax on this payment. The employer matches some taxes in some cases as well.
3) You sign up for a home loan and begin paying a bank on a house.
4) The bank receives interest on your loan payment. This is "income" for them and is subject to income tax on their side.
5) As the "owner" of the property you are taxed further annually for the appraised value of the property even though you don't own it outright.
6) you purchase gorceries from the local convenience store and pay sales tax on the purchase.
7) The profits that the convenience store walks away with are considered "income" for them and are subject to income tax on their side.
8) The store employs digital payment (Visa/Debit) as a "convenience" to the customer.
9) The digital payment processor charges a small, per-transaction fee for the use of their system to the end-user. They also charge a small percentage to the store.
10) these convenience fees add up to profits for the payment processor which is again taxable income on their side.
Nearly every time money changes hands in the world of commerce, the government skims off the top. It's almost deplorable how much money should be flowing through that system. And yet they feel justified in gouging the middle class to the point of barely being able to make ends meet? Homes that cost $120K in some places are worth $ millions in others!
This is a nasty, nasty situation. We're setting ourselves up for another major depression it would seem.