Home property taxes are the most insidious of all taxes. If you don’t pay, the government can confiscate your property and sell it to someone who will pay. This means you do not actually own your property but are merely renting from the government. The most vulnerable within this system are the elderly and those on fixed incomes.
The AARP warns its members that predators are targeting homes of the elderly over unpaid property taxes. In 2014, US property tax delinquencies totaled nearly $15 billion, according to AARP.
The Seattle Times reports that a family bought a home in Kirkland, Wash., in 1980 for $50,000. Today the home is appraised at $1.2 million, and the retirees cannot afford the property taxes on their fixed income, so they were forced to sell and move. Yes, they made a nice profit, but they should not be forced to sell their home because of their fixed income.
According to tax-rates.org, Latah County had the fourth highest property taxes in Idaho before the recent bond. The Moscow-Pullman Daily News reports Moscow property taxes may rise 25 percent in 2020 (a public hearing on the budget is scheduled for Aug. 5), and assessments on single-family homes in the county could rise between 6 and 18 percent, according to the Latah County assessor.
With regard to the proposed Moscow tax increase, 19 percent is due to the $9.64 million bond voters passed for the new police station; and while the need for a new police station was real, the solution was wrong.
Why does it cost Moscow so much when Pullman has one-third the city payroll and much less office space than Moscow? Why was the old police station not sold to offset the $1.5 million to remodel and now to maintain?
Moscow Mayor Bill Lambert wrote in the Daily News about the reason for the 25-percent tax increase to the city’s current $86 million budget. However, prior to July 8 there was never mention, that I am aware, that taxes could increase another 6.5 percent. Was this not discussed beforehand to ensure that the police station and city facilities levy would first pass?
Renters sometimes assume that they do not pay property taxes. In reality, renters pay more in property taxes than homeowners do because homeowners have up to $100,000 in homestead exemption that reduces their property tax burden. Landlords have no homestead exemption, however, and the full tax is passed directly along to renters. My son rents a home in Moscow, and he was told that the rent is increasing 25 percent.
The insidiousness I mentioned is how property tax debt is collateralized. No other type of loan collateralizes a $3,000 debt with a $275,000 asset. If you are unable to pay your property taxes, the state can confiscate your $275,000 home and sell it to get its $3,000. And this is often where predators target the elderly.
To deal with this property tax problem, we first need to stop taxing private residences. A person’s home does not generate income, and therefore it is unjust to tax it simply on the basis that it exists.
Second, we need to separate assessments from collections. Like dealing with other debts, unpaid property taxes should go to collections or have wages garnished. But disproportionate seizure of properties is evil and is no way to treat homeowners, especially the elderly.
Winston Churchill’s said “I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.” Moscow politicians seem to believe that the more money they take from residents, the more prosperity they can spread around. Just the opposite is true. Especially for retirees.
Dale Courtney served 20 years in nuclear engineering aboard submarines and 15 years as a graduate school instructor. He now spends his spare time chasing his grandchildren around the Palouse.