Death, Taxes, And Absentee Landlords

North Dakota has a movement going by some activists to eliminate the property tax. Story here, even though it is the NY Times and it may require further resources:

http://www.nytimes.com/2012/06/12/us/north-dakota-voters-consider-ending-property-tax.html?_r=1&hp

Now on the surface this sounds way cool!

But as soon as the amendment passes I have an idea the residents of North Dakota may be surprised when out of state landlords buy up what is not owned by the various governments and Indian reservations.

Own thousands of acres in another state and pay no property tax – hey Ted Turner, where are you?

Sales and income taxes on the residents of N.D. will replace the lost “income” the taxpayers are paying now for all the goodness government brings and over which they will have no local control at the town or county level for roads and schools.

If North Dakota can figure out how to keep taxes and spending low with all control at the State level, good luck to them.

Comments

[C. dog]

I hope this passes because it will be an interesting case study on affects of taxes on real estate. I think the most obvious result will be a surge in values reflecting the elimination of the "annuity" payout to the Pooh-bahs, roughly 10X the tax. Another aspect on the plus side should be a marked decrease in the number of drones required to collect the taxes: no recording clerks, appraisers, collectors, etc. all relating to R/E tax. Of course, some will be required for income tax, but SHOULD be far fewer because of piggyback on Uncle Sammy scheme to extract coin from pockets.

Not sure about the foreigners gobbling up the land because the windfall gain goes to those who currently own the properties. Plus, not many money bags livin' the life want to own land on the great plains, unless they have a sunflower fetish, or enjoy a good ol' fashion blizzard. But if they do, then this could be a downside to this scheme. No taxing scheme is perfect, just ask the Sherif of Nottingham Forest.
– C. dog flinging arrows at freedom collectors

[Ed Naile]

c.dog:

The farther taxes are from the ones who pay them the less control they have.

One thing property taxes do is to bootstrap locals into a realistic budget.

I hope c.dog does not wear tights.

[C. dog]

Good point on the real estate tax bootstraps. It's possible same would hold true for income tax only dastardly scheme. The worst is when the pols and their drones have multiple tax arsenal, because then they convince themselves that it's not too bad to take some cookies from all 3 jars. And tights are worn only on April 15th; it's a protest thing, plus the chicks dig a well turned ankle.
– C. dog looks currific in leggings

[Ed Naile]

dog:

The property tax exacts what the property is assessed for and the budget is voted on by taxpayers at the local level.

The income and sales schemes are vast collection nets that take in everything - no matter the real need.

Any extra is spent or leveraged into more spending by buying through bonds, hiring, and pensions not voted on by taxpayers.

The broad based taxes are designed to work like a ratchet that only gets tighter.

[C. dog]

Good points, all. I think the budget voting aspect plays the most crucial role of reigning in the pols and bureaurats. However, real need certainly does not erect a fence around even this most parsimonious of taxing schemes, as evidenced by the runaway expenses for fun the union label at the government training camps. But, there are much better solutions for our troubled youth pollution, like a voucher or credit.
– C. dog

[Ed Naile]

dog:

One other thing I forgot to mention:

Those who think "rich" people will pay the income tax have another think coming. They will hide income.

But it is hard to hide a house.

I have David Souter's assessment card and J.D Salinger's as well. It is easy to see who pays and who doesn't.

The trick is to limit spending to what is constitutional and needed not desired.

If our taxpayer groups were as tenatious as the unions (or we could extort $ from taxpayers to run taxpayer groups) things would be different.