Guest Post: Let’s Use People Taxes, Not Property Taxes

property-tax-house1

As we debate the pros and cons of Measure 2 we should take a look at the history of property taxes and whether this form of taxation is relevant in our modern economy and society.

In Glenn W. Fisher’s book The Worst Tax he states “that taxes based on ownership of property were used in ancient times, but the modern tax has roots in feudal obligations owned to British and European kings or landlords. The growth of the property tax in America was closely related to economic and political conditions on the frontier. In pre-commercial agricultural areas the property tax was a feasible source of local government revenue and equal taxation of wealth was consistent with the prevailing equalitarian ideology”.

Noted tax economist Frederick C. Stocker has observed that the property tax “resembles a structure designed by a mad architect erected on shaky foundation by an incompetent builder, and made worse by the well-intentioned repair work of hordes of amateur tinkers.”

All the special interests that oppose Measure 2: Chamber of Commerce, League of City’s, Association of County’s, Townships, actually support getting rid of property tax by their use of deferring property taxes to their chosen individuals and businesses. I call this Corny Capitalism. It is not the purpose of government to choose winners and losers, only to provide a level playing field for all those involved in the economy. Measure 2 will provide for the level playing field for all those involved in North Dakota’s economy.

As to the issue of the lawsuit the proponents filed against the above named organizations it is beyond question that they are funded with taxpayer dollars. It is also a fact that North Dakota law states that taxpayer dollars not be used for political activities.

In our modern economy property makes no demands of government for either services or redistribution of wealth. Only people make demands of government for services and redistribution of wealth. I contend that we should use people taxes and not property taxes for the support of the government.

The issue of local control is used by the opponents of Measure 2. This is a real canard. When you go to a local board meeting whether it is City, County or School Board the board or council members, when debating an issue they always state “we have to act in this way because of dictates from the Federal, or State Government.” There is no such thing as local control in our modern government, only dictates from the Federal and State Governments.

F. Kenneth Olafson is a former North Dakota state legislator, serving in the House from 1980 to 1984.

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  • http://flamemeister.com flamemeister

    In earlier times, property tax involved productive property; owning a home is the opposite, especially when one is again penalized for sinking yet more money into its improvement.

  • Gern Blanston

    It is property tax that moves folks out of their lifelong homes when their area see huge growth. Look at the folks in western ND; look at the elderly in Seattle in the 1990s. They finally pay off their mortgage, then proporty taxes spike due to higher valuations. They can’t afford them and are forced to leave their home, or neighborhood, town, or maybe even their part of the country.

    • Robertfrost

      Complete bunk.  Latest studies prove that this is not happening in North Dakota.  The Measure 2 crowd has sold their soul on a lie about seniors and poor people.  There are programs for low-income people to take advantage of, and the amount of homes taken by government is below 10 a year.

      • Drain52

        Which latest studies are those? The only “study” that’s been done is a self-reported survey. Is this flawed and incomplete survey the “study” you refer to? It shows over 600 properties seized, 8 of them homes. And you’re OK with “less than 10 a year” losing their home? And those that weren’t homes–they were businesses, land, farms–you’re OK with those 600+ losing their property?

        The Homestead Credit that you refer to does not apply to homes that are more than $125K. The median home in ND is around $150K. Most elderly, having lived in their home for 30-40 yrs have homes that far exceed that median and therefore do not qualify for Homestead Credit. Besides, you are misunderstanding what the “Measure 2 crowd” have said. We have never said people are being evicted or having their home taken because of failure to pay. We have always said “people are being forced from their homes.” The vast majority of those who cannot pay the tax sell their homes before it is seized for auction to pay the taxes. Many move into gov assisted housing. Are you OK with that? Others get a reverse mortgage. According to AARP 29% of Seniors getting reverse mortgages say it’s to pay PT. Are you OK with that? And it’s not just Seniors, it’s also the sick and disabled. I personally know of two people who are fighting desperately right now to find the money to keep their home. One has stage 4 cancer, the other has stage 2 cancer. I know of a widowed mother of two disabled children who sold her home just months ago because the taxes made it too expensive and she moved into a $28K “fixer upper.” Are you OK with that?

        • Robertfrost

           Yes, I’m okay with that.  Bad things happen to good people all the time.  It doesn’t mean I don’t have a heart, but people have a responsibility to plan for the future.  My future planning involves owning a home, and just yesterday, I spoke with a planner about what I’ll need for retirement, and that included paying property taxes on the home I’ll own when I retire. 

          Furthermore, I can point to home after home that is less than 125K in value where people live.  If you choose to live in a 150K home, you choose the taxes that go along with that home.  This is really the most enlightening statement from the Measure 2 crowd.  It’s about greed, and you’re parading around these hardship cases to further your own greed.  You want to live in a 200K home, but you can’t afford the taxes.  So, instead of living within your means, you want to deprive cities, counties, and schools of funding so you can buy a bigger house.  This is what led to the last financial collapse in this country.

          We choose to live within our means and pay our taxes.  You choose to screw kids and cities so you can live in a more expensive house.  That is what Measure 2 is all about, not seniors and poor people, which you claim to love.

          • sdlawrence

            “Yes, I’m okay with that.  Bad things happen to good people all the time.”

            I’m OK with that when it’s lightning and tornadoes. I’m not OK with that when its premeditated, deliberate, and 100% preventable and unnecessary. 

            The People of North Dakota (aka the State) are taking in billions more than they need to meet their state budget – including the part that currently funds the majority of local government already (with nobody crying over loss of local control due to that). 

            We got rid of the nasty personal property tax in 1969 (good riddance to that personally invasive insanity), and we’ll get along fine without the equally nasty, regressive, home ransoming real property tax as well.

            Ken Olafson has it exactly right.  Tax people, not their property or its value. No more renting what we already own so the state can shirk its constitutional responsibility to the local governments and the local people of that state.

          • http://flamemeister.com flamemeister

            Nice to see that you wear your asshole badge proudly.

          • Robertfrost

            If living within your means and planning for your retirement, two very conservative values, brands me with an asshole badge, I’ll gladly accept it.  I guess I’ll be paying for your ass in your retirement because you spent all your money on a 200K house you didn’t need, while I remodeled a 15K fixer upper and put money in the bank.  Conservative without the greed is better than what you represent……asshole.

          • http://flamemeister.com flamemeister

             You branded yourself.  But being an asshole doesn’t keep you from being a wonderful, frugal, talented, prudent prig.

          • SusanBeehler

            What happens with the best laid plans, and opps you have a health castrophe, and you couldn’t get insurance because of a preexisting condition?  You can’t plan for everything, so why should you have to draw out your retirement savings early to pay for  property tax?  The housing values are coming this way and may squeeze all your best laid plans clear to Fargo.  The 80 some year old having to leave her home in Willistion never dreamt or planned to have to move to Bismarck because of the inflated home values. 

          • borborygmi

            “What happens with the best laid plans, and opps you have a health castrophe, and you couldn’t get insurance because of a preexisting condition”   A measure 2 proponent and you support the National Health Care bill or at least part of it.   Who would have thought.

          • Robertfrost

            So, you’re okay with supply and demand, just as long as you don’t have to pay taxes?  That same lady can sell her house for record profit, move elsewhere, buy a comparable house for less money, and pocket the rest.  What a shitty deal, huh?

          • sdlawrence

            Or…she could retain the entire value of what is hers without having her equity artificially eroded by the “Ultimate Owner”, while actually having some control over the factors that lead to increases in other taxes she pays (the revenues of all of which are exponentially and naturally rising NOW anyway).

            Then she wouldn’t have to listen to the likes of someone who is calloused enough to suggest that selling out was some kind of a good deal — as if she was being done some kind of favor by being allowed to keep whatever remains of what was HERS – the portion that wasn’t nibbled away to death.  Sounds like a less shitty deal to me.

          • SusanBeehler

            It is so easy for 80 years old to just pick up and leave the only home they have lived in? NOT!

          • The_Truth_Fairy

             Boy, that supply and demand only works for the property owner, in your calloused system.  People are being priced out of their rentals day and night in the west, but the posters here just say, “Well, that’s supply and demand.  Nothing we can do.”  But the same thing happens to the owner, and we need to amend the state constitution.  No, no, no, if we do not need rent control, and we’re going to allow property owners to rape renters, then owners can pay their taxes or sell and reap the rewards.  You can’t  have it both ways.  Either make it fair one way, or another.

          • JurisC

            How can you plan for things that you will never have a control over? You will never have the control over the assessor who will guess how wealth you are when you retire.

      • http://www.facebook.com/people/Matt-Evans/1538949637 Matt Evans

        “The state government blindfolds and executes fewer than 10 senior citizens per year, therefore, we shouldn’t make the practice of blindfolding and executing senior citizens illegal”.

        See how that works?

        • borborygmi

          Why the blindfold?  Gov’t waste

        • sdlawrence

          The ones who aren’t executed (in the thousands) are given a chance to escape — made “an offer they cannot refuse” from their Godfather, who basically said, “Sell out or lose your home.”

          Such a good deal for the callous and truly selfish who would even defend this kind of regressive, predatory tax. Seniors and others are forced to sell out, and everyone gets to assume it was “voluntary” – because they must have wanted to sell.

          That’s how the callous and truly selfish get to feel good about themselves, as this kind of Good Riddance To Old Unfortunate Rubbish doesn’t appear on any statistic as anything but another sale.

      • Lovemyhome

        I am one of those people who is in danger of losing my home due to property taxes.  We moved here five years ago when we were fleeing the housing bubble in Minnesota.  Our property taxes have gone up nearly 30% every year since we moved here because the state has been breathing down our county’s neck to get valuations at 90-100% of market values.  Our county does not need additional revenue but they were forced to do a county wide reassessment this year anyway.  Why are we being taxed out of our home?  Our friends 10 miles down the road received notice that their valuation was going up 330% this year.  Her husband was diagnosed with stage 4 colon cancer last summer.  They have 6 children and they have lived in their home for 16 years.  Whether the increases come slow or whether the increases come fast.  They come. 

        • SusanBeehler

          I am so sorry to hear this, my heart goes out to you and your neighbors. We need to get your stories out there. 
          If you are willing Please contact me I would like to interview you for the filming I am doing on this very  issue.  [email protected]

        • borborygmi

          Are you paying your mortgage?

        • The_Truth_Fairy

           Your problem is with your county, not the tax code.  Valuations can be at market value, but mill levies can be reduced to bring about the same tax receipts.  If value goes up, mills can come down.  It’s not the state that did anything.  Your county screwed up.  Run for a commissioner’s seat.

      • JurisC

        Would you mind reading Olafson’s article again. It explains why property taxes are the most despised taxes. You may have the best planned retirement with the ideal house, but you will despise the property tax when you find out that your tax burden is 10 x higher (even though you can afford it) than your neighbor’s for the same services.

        If you still love the property tax concept, then your thinking is a irreparable as the property tax.

  • Lianne

    Mr. Olafson, that is the most power packed written or spoken response to the property tax issue that I have read or heard.  Thank you.

  • WOOF

    “property makes no demands of government ”
    Property wants police protection, water, fire services, roads, lighting sidewalks.
    Property wants deeds and records.

    Property is taxed cause it is difficult to hide.

    The real problem is that some don’t pay taxes like the many.
    Some would like to be free of all tax.
    Measure 2 will allow a few TeaTards in the legislature to drown localities in a bathtub.
    That’s the plan.

    • Robertfrost

      Exactly.  They want complete freedom from taxes.  Their idea of the world involves everyone paying tuition for their kids to attend school every year, with no public education systems.  They would have someone hire personal security for their homes, so we could phase out police departments.  After all, they own guns, so they don’t need police.  As for a fire department, buy a hose, and have good insurance.  Who needs streets, since horses and buggies work fine on dirt. 

      This is Measure 2’s utopia.  A complete reversion of society.

      • SusanBeehler

        Robert you are freezing up again.  Measure 2 eliminates Property tax and dollar for dollar it replaces the property tax revenue with the taxes we are already paying and the state is already collecting.  I don’t own a gun, or a horse or a buggy, I am for education and I know it is not FREE, and we will pay with the other money we are already paying our other taxes with. 

        • Robertfrost

           That is a bald-faced lie, and you know it Susan.  It eliminates property tax and allows the legislature to come up with a funding formula for education.  This particular district may see more than dollar-for-dollar, while others get less, all as the state deems fit.  Don’t spread your lies that every district will get every dollar they get right now.  The measure comes nowhere near stating that.

          • JurisC

            Why are you a missionary for the property tax? Please understand that Measure 2  does not take away all local government taxing authority – just the property tax. People will have a better choice for local taxation than they have now, if they choose to do so.

            So, why are you pushing the most despised tax?

          • The_Truth_Fairy

             Despised by whom?  Not me.  If you were trying to eliminate our income tax, I’d be lock step with you.  Property taxes are levied by local entities, used by local entites for local interests.  You despise them because you want to live in a nicer house.  I don’t want to pay any high tax, but if it puts kids in my area in school and paves my streets, they are way better than my income and sales tax money being used on welfare programs.

          • JurisC

            You are so full of rage that you can’t listen to what other people are saying. Did I say anything about high or low taxes? NO. Did I say that we need to eliminate local government funding? NO. But what I have said is that we have far better ways to fund our local governments than with property taxes.

            If you love the concept of property taxes, that is your choice. But don’t expect everybody to endorse your love affair.  

          • The_Truth_Fairy

             And don’t expect everyone to buy your hook and line about funding still all being there while no one pays property taxes.  They know their schools, cities, and counties are on the line.  You make overtures to people who care about such, but you’d much rather see every kid go to school in one of 15 or 20 towns, if that many, and a nearly complete cut in services to about 35 of the 53 counties in the state.

          • JurisC

            I am truly amazed at your lack of capacity to understand that we can have local taxes that are called other than property taxes.

    • sdlawrence

      Property tax on more than $1 Billion in private property throughout the state was sure easy enough for some to hide (from). The property itself isn’t hidden, but the exemptions are. And the amount that increases everyone else’s burden? That appears on the tax bills – but the reason for the higher amount – that’s hidden.

      The real problem is the calloused insanity of collectivists and special interests who slop from the same trough, completely forgetting that the State is The People of the State.  Nothing more, nothing less.  And The People of the State are taking in BILLIONS more than THEY (not the special interests that slop) need to meet all budgets – with MASSIVE surpluses, and no personal taxes of any kind required — at this time — let alone a regressive, home-ransoming tax.

      Woof!

    • SusanBeehler

      Woof, you are a real property hound!   Since when in our country are we suppose to continue to make our government rich (billions in surplus) and sacrifice our income rather than use our income to sustain our families.  Woof!    Not only do we make our government rich.  We are subidizing businesses with incentives we do not even have any prove they are bringing any return on this so called property tax investment.  Those businesses are the ones drowning the taxpayers not paying for the services they require.  Go to bbuz.biz/fargo_44     This America why do we have to support businesses with our tax dollars?

      • WOOF

        We are in agreement that:
        “The real problem is that some don’t pay taxes like the many.”
        You want to pressure  those  avoiding taxation.
        I think that is more likely to be effective on the local level.

        That tax money will be replaced or you will do without.
        Now your dependent on the legislature, people free of the
        constraints of your vote.
         

        • SusanBeehler

          We are already dependent on government.  Who do you think the KIL ND coalition is?  They are the ones most dependent on government, they would not have jobs if it weren’t for the government they depend on. NO!  The real problem is not that some people are not paying their taxes, the real problem is the nature of the tax, it is based on value not on the money we use to pay the tax.  Local governments believe when they give an exemption they are giving away nothing, it does not cost anything. If it is nothing than why do businesses want it?  And if it is nothing than why don’t we exempt everyone?   It is not about pressuring those avoiding taxation, it is about change how we pay for our services.  If exemptions work to bring economic development than let’s exempt everyone and bring more economic development.     

        • SusanBeehler
  • Guest

    Let’s see the numbers.

  • Jimmypop

    “There is no such thing as local control in our modern government, only dictates from the Federal and State Governments.” where does the state specify how many police officers i need? or parks? or firefighters? or bike paths? where does it say if i have to spray for mosquitos? any word on how many fargo domes i have to build? when do i have to change my water lines in my street? what do i have to pay my teachers? or pay for my dog catcher? 
    best one yet; who gives me permission and pays to build a dike to protect my house?

    just stop the ‘no loss of local control’ crap.

    • Robertfrost

      Thank God someone said it.

    • SusanBeehler

      Maybe if you had control you could answer all those questions?  I know I spray for mosquitos when they bite, I know I ride my bike and it is on whatever path I take, I know if I have no water a line must be broke or off, I don’t need a fargo dome, I don’t  have a dog, I have friends that volunteer to help build my dike, or better yet I try not to live where a dike is required.  
      Oh you didn’t mean local local control like yourself, you meant how can anyone else other than whoever you think can control these things could possibly do it, like irreplaceable, like a god or something.  You appear to be thinking when you eliminate property tax, everything in your world has come to an end.  Property tax is eliminated with Measure 2 and then everything that the property tax revenue paid for is replaced dollar for dollar with the other taxes you are paying like income tax, sales taxes and than the other 20 or so taxes the state is collecting on your behalf. With Measure 2 you will be able to use it for that mosquito spray if that is what your city or county commission was doing with your money or you want them to do that with the dollar for dollar replacement.  
      It is really not that difficult, just think of it as the sand bag line, some one holds the bag and another fills it , does it matter who is holding the bag or filling the bag if the dike gets built? Vote YesM2.com

  • WOOF

    The belief is that the legislature will make up

     for the lost property tax revenue from other taxes and surpluses ?
    How will locals compel the state to let the cash flow ?

    Seems a trade of the near for the far.

    • sdlawrence

       Oh, the legislature will make it up, alright. They only operate in a relative vacuum now, as they are SOMEWHAT insulated from local fiscal accountability by the property tax.  Remove that, and they really are operating in a vacuum – and at the state level it would be absolute political suicide not to make it up.

      Why? Because the state legislature is all represented by LOCALS.  If they want to get re-elected, they’ll have to show how they “fully and properly funded” their constituency at the local level.

      • WOOF

        States tend have rural urban divides .
        Somebody gets leverage.
        Somebody gets screwed.

        Upstate Tallahassee  rules downstate Miami.
        Albany upstaters rule NYC.

        What pressure can an eastern local do to a western legislator?
        How quickly ?

        • sdlawrence

          Oh, you mean the kind of rural/urban divide that makes poor rural areas COMPLETELY screwed when it comes to making up their shortfalls with property taxes, while Fargo and Bismarck get to make predatory hay out of their locals with the State’s blessing – even to the point where they can dole out exemptions and STILL maintain their breakneck spending sprees? That kind of rural urban divide?

          Think in terms of how surely, not how quickly, because “fully and properly funded” for local governments is no longer optional under Measure 2 (unlike now). It’s a constitutional mandate, which spells legal recourse for rural areas they have NEVER had before.

  • Oranders1

    Common Sense

  • Guest

    How about ND stops taking tax money from other states before they start cutting their own taxes?  Start there, rent seekers.

  • toomuchguvmint

    The big government types just cannot stand citizens to own real estate without government getting a piece of it every year can they?

  • SusanBeehler
  • JurisC

    This discussion should be about Olafson’s article and the merits of the property tax concept. Instead it has deteriorated into side issues of personal opinions how the local governments should be funded.

    The logical sequence, in my opinion, would be to determine if the property tax concept needs to be replaced. Only if it is determined that it needs replacement, can we discuss what other alternatives will be suitable to replace the local tax revenue.

    So, what are the merits of property taxes when we compare it to the other major taxes that we pay from our incomes?  

    • Demosthenes

      This is all under the presumption that propterty taxes are going away and not being replaced…which they are mandated to do. So really there are no merits to keeping or losing property taxes.

      You just want a list of why we shouldn’t change, sounding then very similar to an apologist of those opposing M2.

      • JurisC

        On the contrary, I can give you a list as long as the proverbial mile why property taxes should be replaced.

        Yes, Measure 2 will eliminate property taxes. But it will not eliminate the local governments to tax people with other concepts.

        That is why the whole discussion is so ridiculous about local government control and the implication that property tax is the only way to achieve that.

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