Property Taxes.
"We recognize the rights of the individual to own property. We resist any effort by government to take private property without an overwhelming need for public use. We strongly oppose the forfeiture of private property from innocent owners.” - Republican Party Platform
Because property taxes help to pay for a variety of public services, I would never suggest eliminating those services by eliminating the property tax. But I wonder out loud…is there a better way? A way that gets the government the revenue it needs while protecting the ownership of your home.
Property taxes will always be with us. That’s because by law, all Tax Entities in the County (currently there are 44) are guaranteed the prior year’s property tax revenue regardless of overall property values. The tax entities get at least what they got last year. There is no zero-based budgeting…Perhaps something to consider. https://www.webercountyutah.gov/Treasurer/tax_entities.php
Every year, the government presents us a bill for our property taxes. Even if we already own our home, we must pay the bill. Each year some citizens face losing their home if they can’t pay their property taxes.
Think about it…why does the government charge us a fee to live in our home? We don’t really use our property like we used to many years ago, when we were farming or raising cattle. Today, most people don’t generate income from their property (excluding rental income but, remember the tenant pays the taxes not the owner). So, when you work hard all your life and pay off your home, you don’t really own your home. If for some reason you can’t pay your property taxes…the government will seize your property.
Now in fairness, the government is compassionate…Tax Relief programs do exist to assist the elderly, low income, disabled, blind, and veterans. If you belong to any of these categories, you may be eligible for a reduction in taxes. But my concept doesn't allow for "government compassion" to pick winner and losers.
Because property taxes help to pay for a variety of public services, I would never suggest eliminating those services by eliminating the property tax. But I wonder out loud…is there a better way? A way that gets the government the revenue it needs while protecting the ownership of your home. Could revenue from a consumption tax on the sale of property replace the current and future revenue required for these public services? Let’s think outside the box...and take a look…
For purposes of making this as simple as possible, let’s take a home valued by our county assessor at $400,000. The property tax on this home would be approximately $2,000-$3,000 each year. Over a 30-year period, assuming it does not go up, (which we know it will) it would total $60,000-$90,000 in taxes. This is a lot of money and I believe more than the local government needs from an average household. But the purpose of this idea is to show how a consumption tax, ensuring that the government can never take your home, will equally fund the replacement of property taxes.
Every time a piece of property is sold, a consumption tax would be paid by the buyer at the time of the sale. This tax could be paid up front with the down payment or wrapped into the mortgage and financed…never to face an annual property tax bill again!
Here is an example.
Let’s take this same $400,000 home. Every time this home is purchased, a consumption tax would be paid. If this tax was 5% then the consumption tax would be $20,000. (As the value of the property increases and the sale price increases in future sales, the consumption tax revenue would increase as well).
Now you might be saying that’s a far cry from $60,000 to $90,000. However, you must calculate how many times this home would be sold over a 30-year period. Statistically, the average family moves 3-5 times in a 30-year period. Using this as the marker this would mean that the same $400,000 home would bring revenue in the amount of $60,000 -$100,000. Now again, I think this amount is more than the government should have per household and we need to lower the government’s impact on our income, but this shows that replacing property tax with a consumption tax will more than pay for the needs of the State and Counties.
I would recommend a LOCK on the percentage allowed for the consumption tax so politicians couldn’t ever raise the rate.
You might say, “why replace property tax with a consumption tax if the revenue to the government is the same or more?” Well, this reason is the entire point! With property tax, even when you pay off your home, you still must pay an annual tax and if you cannot pay that tax the government WILL take your home.
With a consumption tax, ONCE YOU PAY OFF YOUR HOME, NO ONE CAN TAKE IT FROM YOU…EVER! You truly own your own home.
God bless America!
BACK TO HOW PROPERTY TAXES WORK CURRENTLY AND WHY THEY WILL ALWAYS GO UP!
Remember, by law, all Tax Entities in the County are guaranteed the prior year’s property tax revenue regardless of overall property values. If a taxing entity, like a city or a school district, requires a budget increase over the previous year, the entity must hold a Truth in Taxation hearing to allow public comment. It is important to note that each taxing entity is independent of all the others within the county. Weber County does not control the budget for any of the Tax Entities.
The "Truth in Taxation" law requires public notices and public hearings when a taxing entity proposes an increase in its property tax revenues (not rates) above those collected the previous year. The public hearings are required to allow officials to explain the reasons for the proposed increase and allow citizens to comment on any proposed increase. It is here where concerned citizens can have an impact on rising property taxes but typically, only a few show up and the increase is passed.
Every property falls under several different taxing entities, which are then grouped together into a tax area. In that tax area, the budget of each taxing entity is the main force behind the amount of property tax required. If you add up the total assessed value of each property in the taxing unit, then subtract any tax exemptions, like the residential exemption or tax-exempt properties, you have the total taxable value for that taxing entity.
https://www.tax-rates.org/utah/weber_county_property_tax
While some properties may swing up or down in tiny increments each year, overall, the revenue required by law will always be collected...unless the law changes.
It is interesting to note here that all new properties are exempt from this process. So, one might ponder how tax revenue on these new developments each year is assessed when reviewing budgets and determining the tax rate for existing properties that year? The bottom line is under this process…we will never rid ourselves of increasing annual property taxes. The path we are on is unsustainable...
If you have a better idea, let’s talk about it.
Every year, the government presents us a bill for our property taxes. Even if we already own our home, we must pay the bill. Each year some citizens face losing their home if they can’t pay their property taxes.
Think about it…why does the government charge us a fee to live in our home? We don’t really use our property like we used to many years ago, when we were farming or raising cattle. Today, most people don’t generate income from their property (excluding rental income but, remember the tenant pays the taxes not the owner). So, when you work hard all your life and pay off your home, you don’t really own your home. If for some reason you can’t pay your property taxes…the government will seize your property.
Now in fairness, the government is compassionate…Tax Relief programs do exist to assist the elderly, low income, disabled, blind, and veterans. If you belong to any of these categories, you may be eligible for a reduction in taxes. But my concept doesn't allow for "government compassion" to pick winner and losers.
Because property taxes help to pay for a variety of public services, I would never suggest eliminating those services by eliminating the property tax. But I wonder out loud…is there a better way? A way that gets the government the revenue it needs while protecting the ownership of your home. Could revenue from a consumption tax on the sale of property replace the current and future revenue required for these public services? Let’s think outside the box...and take a look…
For purposes of making this as simple as possible, let’s take a home valued by our county assessor at $400,000. The property tax on this home would be approximately $2,000-$3,000 each year. Over a 30-year period, assuming it does not go up, (which we know it will) it would total $60,000-$90,000 in taxes. This is a lot of money and I believe more than the local government needs from an average household. But the purpose of this idea is to show how a consumption tax, ensuring that the government can never take your home, will equally fund the replacement of property taxes.
Every time a piece of property is sold, a consumption tax would be paid by the buyer at the time of the sale. This tax could be paid up front with the down payment or wrapped into the mortgage and financed…never to face an annual property tax bill again!
Here is an example.
Let’s take this same $400,000 home. Every time this home is purchased, a consumption tax would be paid. If this tax was 5% then the consumption tax would be $20,000. (As the value of the property increases and the sale price increases in future sales, the consumption tax revenue would increase as well).
Now you might be saying that’s a far cry from $60,000 to $90,000. However, you must calculate how many times this home would be sold over a 30-year period. Statistically, the average family moves 3-5 times in a 30-year period. Using this as the marker this would mean that the same $400,000 home would bring revenue in the amount of $60,000 -$100,000. Now again, I think this amount is more than the government should have per household and we need to lower the government’s impact on our income, but this shows that replacing property tax with a consumption tax will more than pay for the needs of the State and Counties.
I would recommend a LOCK on the percentage allowed for the consumption tax so politicians couldn’t ever raise the rate.
You might say, “why replace property tax with a consumption tax if the revenue to the government is the same or more?” Well, this reason is the entire point! With property tax, even when you pay off your home, you still must pay an annual tax and if you cannot pay that tax the government WILL take your home.
With a consumption tax, ONCE YOU PAY OFF YOUR HOME, NO ONE CAN TAKE IT FROM YOU…EVER! You truly own your own home.
God bless America!
BACK TO HOW PROPERTY TAXES WORK CURRENTLY AND WHY THEY WILL ALWAYS GO UP!
Remember, by law, all Tax Entities in the County are guaranteed the prior year’s property tax revenue regardless of overall property values. If a taxing entity, like a city or a school district, requires a budget increase over the previous year, the entity must hold a Truth in Taxation hearing to allow public comment. It is important to note that each taxing entity is independent of all the others within the county. Weber County does not control the budget for any of the Tax Entities.
The "Truth in Taxation" law requires public notices and public hearings when a taxing entity proposes an increase in its property tax revenues (not rates) above those collected the previous year. The public hearings are required to allow officials to explain the reasons for the proposed increase and allow citizens to comment on any proposed increase. It is here where concerned citizens can have an impact on rising property taxes but typically, only a few show up and the increase is passed.
Every property falls under several different taxing entities, which are then grouped together into a tax area. In that tax area, the budget of each taxing entity is the main force behind the amount of property tax required. If you add up the total assessed value of each property in the taxing unit, then subtract any tax exemptions, like the residential exemption or tax-exempt properties, you have the total taxable value for that taxing entity.
https://www.tax-rates.org/utah/weber_county_property_tax
While some properties may swing up or down in tiny increments each year, overall, the revenue required by law will always be collected...unless the law changes.
It is interesting to note here that all new properties are exempt from this process. So, one might ponder how tax revenue on these new developments each year is assessed when reviewing budgets and determining the tax rate for existing properties that year? The bottom line is under this process…we will never rid ourselves of increasing annual property taxes. The path we are on is unsustainable...
If you have a better idea, let’s talk about it.
