Breaking Free From The Shackles of Property Taxation!

When America was establishing itself as a Nation, the institution of slavery was a black eye in contradiction to the very principles of Liberty which was supposed to be the foundation of our governing bodies.  When some arose to discuss the deplorable nature of slavery the supporters of slavery always returned with the same deflection….they defended their right to hold others in slavery based on economy and benefit to the slave owner in total disregard of the fact that they were holding a people in chains.

Slavery was beneficial to the slave owner because it provided inexpensive and stable labor (income) for the slave-holder regardless of the loss of Liberty and person-hood in the life of the slave.   The rights of a slave were to be ignored because they were viewed as the property of their masters.  They belonged to someone else as property.

The elite class of the slave-owner was provided unique protections over their inferior class of slaves who were expected to lead meager lives to provide for the wealth and well-being of those who claimed the privilege of owning others.

An 1850 publication provided slaveholders with guidance on how to produce the “ideal slave”.  This included things like:

  • Maintain an unconditional submission.
  • Create a sense of personal inferiority, so that slaves “know their place.”
  • Instill fear.
  • Teach servants to take interest in their master’s enterprise.
  • Steps were taken to ensure that slaves remain helpless and dependent.

Slaves were conditioned to submit to their owners granting the owner unconditional power over them.  The slave owner was to be revered, elevated above the importance of the slave and a fear through a threat of personal violence was used on those who would not comply.  Slaves were conditioned to believe that they were helpless in removing themselves from this abhorrent state of slavery.  Slavery was, after all, the law of the land.

The slave was accountable to the slave holder but there was little accountability to the slave.

The inhumane and immoral treatment of slaves was justified solely on the economic advantage of the slaveholder.  The ability to hold on to others as their possession could be framed around the slave owner’s ability to provide goods to the greater community regardless of the cost to the slave.

A war ended slavery but the notion of some having absolute power over the lives of others with disregard to the consequences of the power over those being oppressed never really died.  It would take a social revolution before women were recognized as equal partners in society.  It would take another social revolution to recognize the civil rights of persons once viewed as slaves.

The one institution, however, that has survived though these social upheavals restoring individual rights has been the preservation of the notion of using property (real estate) as a method for taxation.

As a student of history I am troubled by the rhetoric that I’m hearing from those in place to oversee the educational institutions in Pennsylvania because, frankly, I’m hearing arguments similar to the justification of slavery while ignoring the moral implications.

We hear that property taxes are stable sources of revenue.  So was slavery;   Stable, however, only for the Slave holder.  Stability was never looked at through the instability it caused in the life of the slave.

The stability argument of the property tax supporters is only within the context of the stability for the tax collector.  It is an economic argument that ignores the adverse impact on the economic abilities of those forced to pay the tax.  It is an economic debate devoid of the moral implications.  When the argument is framed in this way the justification for the abuse many suffer because of the property tax is solely through the eyes of the economic gain of the oppressor.

The property tax has become the vessel which has allowed wages, pensions and healthcare (the three major causes of increases in property taxes) in a large portion of the public sector to far outpace the rate of inflation for other in the private sector.  It is allowing for those who benefit from property tax to prosper while denying those same “entitlements” to many in the private sector.  As the private sector has moved away from defined benefit plans, the property tax allows this sector of public employees to remain in such a system regardless of the economic peril it causes to those who actually pay the bills.

To maintain the status quo, the public sector needs to increase the burden on property owners often denying many in the private sector the ability to invest in their own retirement or healthcare.  The needs of those who pay the property are then ignored through a justification that, in order to have what those in the public sector want, others must make the sacrifices.  When it comes to the property tax, that sacrifice may include your home!

Those sacrifices are being made.  As we’ve gone around the state we’ve talked to people who are making choices between food and healthcare in order to hold on to their homes.  We’ve met others who have lost their homes, either through tax seizures or by being forced into bankruptcy and foreclosure because the tax has exceeded their ability to pay.

Listening to the opposition to school property tax elimination it is almost as though those being crushed by the property tax are viewed simply as the collateral damage and that somehow it is all justifiable simply because the property tax is a stable source of revenue for the tax collector.

It’s an attitude that embraces a notion that people who lose their homes do not matter.  They are expendable because it’s more important to protect the status quo than it is to do the morally right thing.

Consider the statement made at a public hearing by Michael Wood of the Pennsylvania Budget and Policy Center on the matter of abolishing the property tax.  He stated that 10,000 people losing their homes to the property tax each year is not a significant enough number to do something about it.

That’s an expendability mentality where the homeowner, as long as they are healthy and able, are welcome but once the tax exceeds the ability of the homeowner to pay, the homeowner is insignificant and must be ignored.  They are to be tossed aside with no regard.

It is the same rational the defenders of the slave industry welcomed.

It may seem harsh to some to compare property taxation to slavery but, in my opinion, that is a disconnect to the many who are struggling under this form of unfair taxation.  Their lives do matter and no arbitrary tax should have the ability to take your home away from you.  After all, if they have such power, who really owns your home.

Imagine yourself in a situation where you purchased a home 20 years ago with 10 more years to go until that home is paid for.  Now an unforeseen event, a loss of a job or health issue that will temporarily set you back.  You can still meet your mortgage obligation but your property tax is now outside your ability to pay.  Eventually you will lose that home.  You may lose your 20 years of investment in that home in the process because the priority is only to recoup taxes and pay off the bank loan.

Imagine a senior who actually completely owns their home being forced into a situation, perhaps through the death of a spouse or other health related issue, who will have their home stripped from them, pillaged of their investment in that home and stripped of a lifetime of memories stored in that home simply because they couldn’t afford to keep up with the demands of those benefiting from the property tax.

If they can strip you from your home and then sell that home on an auction with no regard for your investment in that home; if they can sell that home for pennies on the dollar seeking only to pay the back taxes and settle the remaining balance, if any, of the bank; who really owns your home?

Taxes are a necessary part of life but that does not mean that all taxes are justifiable.  There must be an accountability, a justification, for taxation in the funding of the necessary functions of government.   The methods of taxation should reflect a person’s ability to pay.  Taxation should never be based on some arbitrary justification that actually makes the tax-payers a slave to system with little accountability to the taxpayer.

I believe that education is a necessary part of government funding.  I believe that it is our responsibility to help in providing for the future education of our children.  I also believe that using property is the most unfair method of taxation in the funding of a public education.  It makes the homeowner subservient to the demands of an institution whose highest priority should be the education of our children.

Property tax is derived from an artificial measure of property worth that, especially during down economic times, does not reflect actual home value.  When home values drop, assessments do not adjust to reflect the decline in property worth.  Individuals must go through a lengthy and often costly system of appeals to have their assessments lowered.  This will also involve time off work.  For many lower income families this is not an option for them.

In county-wide reassessment we continually see large numbers of appeals made.  The majority of those appeals are successful meaning that the assessed value of the property was wrong.  When the assessed value of your property is higher than your properties worth, you are paying property taxes on property you do not actually own.  While assessors use the terminology of fair-market value, such terminology is a misdirection.  Fair-Market Value is a price agreed upon by a willing seller and willing buyer.  In the assessment process there is neither.  Your home will be valued for the purpose of taxation based on an arbitrary decision that has nothing to do with a buyer or seller.

The assessed value is accepted by the tax collector as fact.  It becomes the burden of the property owner to prove that this is wrong regardless of how costly it is to the homeowner.  For those who cannot afford to do so:  Too bad!   The defenders of the property taxation will tell us this is justifiable.

How does this arbitrary means impact you?

Let’s say that the taxes you pay on your property is only $10,000 more than your actual property worth in the open market.  Multiply your current millage rate by 10 (adjusted by your area’s common level ratio) and you’ll see how much more you pay it takes as a result of inflated assessment.  It may not seem like a lot but you’ll be paying that inflated rate for as long as you own that property.   If there are 1,000 homes in your district paying taxes on an additional $10,000 of property worth we begin to see the devastating impact of the assessment process.

My millage rate is 27.1735.  If my property is assessed at $10,000 more than I can sell my home in the open market, I’m paying $271.735 more annually in taxes than my property is actually worth.  If only 1,000 other properties in my district are doing the same, $271,735 in taxes are being collected that cannot be justified through actual fair market prices.

Studies by the National Taxpayers Union have demonstrated that as many as 60% of assessed home values are actually higher than the price the home could be sold for in the open market.  In the county that I live in a recent re-assessment was conducted on the 54,000 properties.  60% of 54,000 properties would be 32,400 properties….not just 1,000 properties as used in the example above.  It changes that into a potential of raising $8,804,214 in taxes based on property that is not actually owned by the property owners.

This only happens with the property tax and its part of the built in mechanism of the so-called “stability” of the property tax for the tax collector.

It cannot happen with your Income tax.  Your income tax is based on an actually and accurate number that is a one-time tax in new income earned.

It cannot happen with the sales tax because it involves the willing exchange between the buyer and seller based on an actual price, never on some governmentally established estimated value of the item purchased.

If the assessed value of my home is inflated, I will pay an annual inflated tax on that property for as long as I own that property.   So will the other 60% of the homeowners according to the National Tax Payers Union.

Are we to ignore these studies simply because the tax is stable for the tax collector regardless of the instability it creates for those who must pay it?

Those who opposed shifting from property tax to Income and Sales tax say that this will hurt renters.  The argument is framed as though the supporters of maintaining the property tax actually care about renters.

In the last three years alone median rent has increased by 5.47% according to the Census ACS survey.   The largest factor in the increase of this rent is the property tax.  If those trends continue we would see a 27.4% increase in rent over the next 15 years.  The Study tells us that the median rent today is $848 in Pennsylvania.  If the trend continues in 15 years that median rent would rise to $1080.35.  Why is this never a part of their discussion when they claim to care so much about the renters?

That’s not some hypothetical increase.  That is trends.  This is what will happen if we continue down this path.  Obviously, in protecting the status quo, they don’t care about the 27.4% increase in rent over the next 15 years.  Nor do they care that by shifting to a PIT and SUT tax we can greatly reduce the burden on renters in future years because the property tax will no longer be there to drive up the cost of rent.

Looking at those numbers median annual rent would go from $10,716 annually to $12,964.2 for an increase of $2,248.2 if we maintain and protect the status quo.

The most alarming part of the supporters of the status quo; the part that seriously undermines my respect for those making these arguments is the contention that my home is theirs to tax as the will as though my property is their property to do with as they please.  In using the same defense that were made to justify slavery while misrepresenting the inequities and the inherent flaws of using property taxes to fund education they are doing our communities and Commonwealth a great disservice.

In all these arguments against property tax elimination through HB/SB 76, not a single argument has been made that spending more has produced dramatic results in the quality of the education our students are currently receiving.  The arguments can be boiled down to the same rhetoric.

They want to spend even more to protect the benefits of those in that group regardless of the damage it does to everyone else.   If you can’t afford to provide for you own retirement so you can pay for theirs, so be it.  If you can’t afford healthcare so you can pay for theirs, so be it.  If your employer can’t give you a raise because the economy isn’t recovering and jobs are leaving the state because of the negative tax environment, to bad…that doesn’t mean they won’t give themselves raise making your tax burden even more difficult.

No we aren’t in physical chains and they can’t beat us into submission with whips but it’s still slavery to a system that insists on rewarding itself to the peril of many who must pay the bills.  It is slavery to a system that gives itself rewards that are far out of the reach of those who must pay the bills.

Oddly enough, in reading those points listed from the 1850 publication on how to create “ideal slaves”, I find the current rhetoric of property taxation supporters ironically similar as I do the same stability debates that ignored the cost of that instability to the slave in order to promote the benefits and stability to the slave-owner.

Until we free ourselves from the shackles of property taxation we will continue to be slaves to a system that is easily manipulated predicated on creating instability for those who must pay the bills with little to no accountability for how that money is actually being spent or concern for the injustice of using an arbitrarily determined home value that taxes you on property you don’t actually own.

Eliminating the property tax frees us from those shackles opening doors of opportunity to make our own decisions rather than having our decisions made through the enforcement of an unfair system of taxation.  It will allow us more Liberty in deciding what to buy and when rather than forcing thousands to determine that for them because the property tax bill is due.

HB/SB 76 also allows schools districts to go to their community and make a request for special funding for local projects.  It brings the community into the decision making process to determine factors of new school construction, stadium construction and expansion, or any other project.  It restores a level of local control putting the control into the hands of the community, not the arbitrary decision of an administrator and the 5 school board directors who want to make that happen.   Rather than controlling the locals we will see a restoration of real local control in the decision making process.  Maybe, that’s what they fear the most-accountability to the people they serve!

They are fighting back.  They are encouraging their members, those who benefit, to keep the shackles of property tax securely wrapped around our ankles.  Now, more than ever, we need to to take a stand.

Contact your legislators and thank them for their support of School Property Tax Elimination through HB/SB 76.  We need to flood their offices with letters, emails and phone calls.

For all you have done, thank you…..for all you will do, thank you again!


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