The stars at night are big and bright...

The stars at night are big and bright...
The stars at night are big and bright...

Tuesday, May 12, 2009

Pardon me while I climb on my soapbox for a moment.

I don't really have a problem with income tax. I don't like paying it, but at least I'm not alone in the boat. Everybody has to row. Some row harder than others but there are few free riders.

Property taxes are something completely different. Only property owners pay based on the appraised value. Those that rent or lease pay nothing. You could argue that the cost of the tax gets passed along to the renter, but it's not really the same. You don't like the rent, you move. You don't like the tax, you must sell the property. And good luck getting the appraised value.

Appraisal statements are arriving this month from the Wise County Appraisal District. These fine folks are a quazi governmental entity that works as a collection agency for local school districts. I call them quazi governmental because they are not held accountable to the voters. This is not the Wise County Tax Collector who you can vote out of office. The WCAD is like the Supreme Court.

Each school district used to collect their own taxes. WCAD now collects for all districts in the county, they also set the appraised value.

I've never agreed with their opinion of that value. The amount they value minerals is far above the amount you receive. They get around that by saying they tax amount in reserve (in the ground) not the amount that gets pumped out. Odd the amount valued never decreases equal to the amount pumped out. Good luck getting that changed without a battery of lawyers and accountants. I also have to pay income tax on the amount pumped. They literally have me by both ends.

Real property is much the same. They set a value according to their opinion, not market value. You do have a better chance at getting that changed, but it's not a simple or convenient thing. There is no Easy Button. You must gather evidence supporting your estimate of the value, appeal the WCAD board and hope they rule in your favor. Back to that Supreme Court thing again.

Last week I got my appraisal notice. Guess what? The South 40 has gone up in value about 10%. Meanwhile the real estate market has dropped about 14%. Mineral values also went up while revenue has fallen dramatically.

You do the math.


Denney Crane said...

And it's just the tip of the iceburg!!! More to come...

The Accomplice said...

Last November I got my tax notice in the mail. The value in taxes for my home and lot was $91,000. I sent it to the morgage and they payed it.

Last week I got a tax adjustment thing stating that my home and lot are now worth $131,000.

I went to the tax office and asked them why it changed to a $40,000 tune. They told me that since I bought the house last year, they can change it that much.

My mortgage is going up.

Anonymous said...

RPM, you are correct about the income tax. Of course nobody really enjoys paying them, and there's plenty of room for discussion about flat vs. progressive. But, the central point is that, if you have income, you pay tax. If you don't, you don't. I would probably disagree a bit about there being few free riders.

The property tax, though, is a different animal. It taxes the object, not the income. As such, I don't think it's unreasonable to consider it an incremental confiscation. If one holds a piece of property long enough, he/she will pay its full appraised value to the government, at the rate of a few percent per year. Despite caps and exemptions, there are plenty of burgs in this area where old folks sell the homes they've owned for decades because they can't affort to continue paying property taxes. It's shameful.

Texas' situation is exacerbated to a degree because, unlike many other states using the 'three legged stool' model (sales, income, property taxes), we have just sales and property taxes. Our state franchise tax is tantamount to a business income tax, and was widely expanded in 2007 by HB3 to collect a few more sheckels from organizations previously not subject to that tax. Ask any CPA or state tax agency employee how well that program's going.

The notion of the tax triumvirate should not imply that I favor a state income tax. I don't. In fact, my observations on the effects of HB3 only solidify my belief that Texans, and Americans, should be taxed less, not more. Besides, it would be folly to think that addition of another tax would result in the reduction of property taxes, because taxes are like cockroaches.

Texas' sales tax came into effect in 1961. Most of the towns around here adopted local sales tax in the late '60s or early '70s. I think it was in the '80s that the Lege upped the combined sales tax cap to allow for transit authorities, although many communities instead opted to create virtual 'cookie jars' for: crime control, parks, libraries, economic development - in other words, programs that once were part of municipal budgeting processes.

As much as anything else, it's the insatiable tax appetite of the leviathan that keeps me from being a liberal.

RPM said...

Exactly 9:04. BTW, make up a fake name or something. I'll even settle for "Double Fakes". It makes the conversation easier to follow.

Nobody actually owns any real property in Texas. You are merely the taxpayer of record. If you fail to pay the King (the school district & county) the King will kick you off your land. You own it as long as you can keep the King at bey.

el chupacabra said...

As I've said many times,"If you can have it taken away from you(by force if necessary) you DON'T own it."
Maybe a person is good with taxes and thinks we pay too little and that's fine- their opinion but, if they disagree with the above statment they don't understand the 'nature of the beast' in this situation.
You can protest it- it works occasianally I'm told and anyway, you disagree and it's your government imposing itself on you so it should on record that you disagree.
If nothing else if they esteem your place so highly- tell them to buy it from you!