This January, local tax authorities will begin to send out property assessments for 2009, telling homeowners what their property is valued at, and how much their tax bill is.
But many assessments won't reflect any of the steep home price declines that have been making headlines for the last year or so. And even if property assessments do drop, property tax bills won't necessarily be any lower.
Property taxes climbed relentlessly earlier this decade as home prices rose, according to Peter Sepp, spokesman for the National Taxpayers Union. This year Americans will pay more than $400 billion in property taxes, up about 25 percent from levels in 2004 and double what they paid 10 years ago. At best, says Sepp, those steep increases may start to level off.
Even if local prices are way down, taxpayers may not get a lower assessment because there can be a big lag between when the home sales used to calculate them
take place and when the assessment is actually issued.
And tax collectors often raise tax rates to offset lower assessments in order to meet their budgets -- which will be very strained this year. Assessments go down but tax rates go up, so the tax collections stay roughly the same.
"State and local governments depend very heavily on real estate taxes and they are reeling from a loss of revenues from sales taxes and other sources," said Bruce Hahn, of the American Homeowners Foundation.
In good times and bad, government will find a way to fund itself, indeed to expand. It is the only entity on earth with police powers to extract as much money as it wants from us and if even that's not enough, to print as much money as it wants, even if that means the value of our money decreases.
Morals of the story:
- If you're contemplating looking for a job, look for a government job. As I've said in previous posts, especially in tough times, unless you're a star employee or a great entrepreneur, a government job may be your last and best home for decent-paying, secure employment.
- Even if times stay tough or even get tougher, expect your taxes to rise further. Obama has promised a tax cut for 95% of Americans while also promising access to health care and college for everyone including the 13 million current illegal immigrants, spending $150 billion on alternative energy, $150 billion more on an infrastructure package, etc.
You don't need to be a mathematician to know those numbers don't come close to adding up. To pay for his promised programs, he will have to raise taxes on the middle class, the group that pays the lion's share, the most painful share, of taxes.
And remember that candidates run more moderately than they govern. Obama, his all-left-of-center advisors, and all the new-government-program-seeking liberal special interest groups that supported him will clamor for ever more risky schemes that will require your federal income tax, social security tax, self-employment tax, payroll taxes, state income tax, local income tax, sales tax, property tax, capital gains tax, bridge and tunnel tolls, user fees for parks, etc., plus the myriad additional taxes embedded in products you buy, for example, from the hefty levies built into the price of filling your gas tank to the price of a bottle of Bud, and if, after taking all that money from you, you still manage to die successful, estate tax.
Taxes essentially force the middle-income earner to work for free for the government for the first half of every year. You're essentially a slave and the government is your master.
Ask yourself whether working half a year for no pay is worth it, not just to you but to all Americans. Think, for example, about the public schools so bad that millions of parents wish they could afford to send their kids to private schools. Think about the public hospitals you shun because you know you'll get better care elsewhere. Think about the government's nonresponse, even in emergencies, for example, Hurricane Katrina.
In sum, when you're staring at that voting machine, think about whether you want to spend more or less of each year working for no pay to fund the government---assuming the government can get the voting machines to work.