Chappie is a senior and will soon be paying property taxes for the first time. Yes, I know: something is not quite right about the Chapster...arrested development for sure. For the time being, he can afford his taxes, but down the road? Who knows?
In California in 1978, the anti-tax people (Republicans) put over on the future of California something called Proposition 13. Chappie remembers it well. The Golden State has been sliding ever since.
When Chappie arrived in CA in 1974, Patty Hurst had been kidnapped and everything in the state seemed to work wonderfully well. California had the #1 rated public education system in the USA. Rents were affordable in SF and elsewhere, the economy made CA the world's #5 economic power. Even the arrest/rescue of Patty Hearst didn't cast a pall over that scene of possibility.
In 2015 CA public education ranked 9th worst in the country. Our other metrics are equally dismal. to dismal to list. But this post is about the original, underlying interest/issue that motivated the passage of Proposition 13: grandma and grampus cast out for unpayable property taxes.
Chappie believes that the original premise for Prop 13 was a phony from the beginning. He has reached this belief over 40 years of watching the Golden State become not so much. But the economic benefit to a large class of people (mostly Democrats now) has made them so corrupt in their acceptance that they should pay much less than their neighbors pay for properties of approximately equal market value, that there is no hope for the state. Prop 13 is said to be the third rail of CA politics, so CA is done for. But CA is just one state and this problem supposedly exists in all 48 states. 48 states? Chappie thinks that there is an obvious answer to the problem of seniors being unable to pay increasing property taxes on their fixed retirement incomes and being forced to sell their homes in any of the 50 states: a simple solution that benefits everyone.
What if retired people (or anyone) with incomes that make it prohibitive for them to pay their property tax were allowed to pay the tax later, when they sell and move out or after they die and their estates are settled? The taxing authority would have a lien on the property that would guarantee payment. In the meantime, the property owner would pay only the interest on what would in fact be a loan, a kind of reverse mortgage. The interest would be pegged to the prime rate or the cost of living or some metric that everyone could agree on. It couldn't be high. This would be interest on the unpaid tax, an amount that would climb by the tax number each year.
If the tax on a given property is $1,000 and the owner opts for the program with an interest rate of 5%, after 1 year, the tax interest bill would be $50 and the tax owed at estate settlement would be $1K. After 10 years, if the tax rate had not gone up, the tax owed would be $10K and the annual interest owed would be $500. If the homeowner remained in the home for 20 years with no change in the tax rate, the total tax bill payable on settlement of the estate would be $20K and the annual bill for interest would finally have reached $1,000, having increased by a steady $50 for 20 years. Thus the taxing authority would have a kind of investment paying interest annually.
Over 20 years, the value of this interest payment would total $10,500. The homeowner would have paid slightly more than half of the value of the outstanding tax bill in interest. Payment of the balance (the actual tax) would come from the estate. A homeowner who couldn't mange this should probably not be living in such an expensive property. Where do people get the idea that they have a right to live in the same house all of their lives regardless of ability to pay? Downsizing has many benefits and one of them is living within one's means. Republicans otherwise seem to think this a valid goal to enforce on people who don't look like their parents and grandparents. If folks don't want to pay that extra $10,500, they can downsize and move into a place they can afford and let a young family move into their big house with all the empty bedrooms. It's a choice, and meaningful choice is the essence of real freedom.
Oops--not so fast! It is unlikely that the tax number (rate compared to assessed value) would not have increased over the 20 years. In many locations the property would have doubled in value. In San Francisco it would have quadrupled in 20 years. In order to protect the elderly, the taxing authority could allow them to pay interest on only the original annual tax number during their lives, regardless of how the actual tax number had risen with increased valuation. At the time of settlement of the estate, the full value of unpaid tax increase plus compounded interest on that increase would be due from the proceeds of the sale at market rate of the vastly more valuable property. The taxing authority would always have first claim on assets.
If the greedy heirs don't like this prospect, they could have persuaded Grandma and Grampus to move to an apartment 20 years before, selling their house and investing the excess proceeds...in any rate those are individual decisions for individuals. The governing/taxing authority can offer a real and workable choice which doesn't cut into tax receipts at all.
Chappie believes, based on his years of observing stupid, short-sighted public policies allowed to run roughshod over the uncomprehending, that turning back the clock is rarely a good option, but recognizing that cycles tend forward and changing conditions will eventually lead to the undoing of myopic, recidivist policies. The way to deal with, for example, the absurd gun violence situation is not to try to pass further legislation limiting ownership, it is to allow the insurance industry and the civil law to task gun makers and owners for the full damages produced by their manufacture/ ownership of these dangerous things. People will always vote with their wallets if possible. Solutions that involve restrictions are always a limit on personal freedom. Solutions that offer meaningful options--choices--enhance freedom and its twin: responsibility.
I'm sure I could think up some really clever and apt analogies to encompass the bizarre duplicity of Stein's language, but why should I? I've got Stein's language and the facts of life to rebut them with.
The income tax is (almost) the ONLY tax that some people don't pay. They don't pay income tax (if they get their payroll tax refunded) because in our wonderful economic system where wages have been flat for 43 years, they can't earn enough income to pay income tax--paying income tax is a sign of success, it's a symbol of the power of and honor to be an American citizen...unless one is a Republican. So why does a bright man make such an asinine and utterly false statement? A statement that defies reality? Because Ben Stein lives in a different reality.
In his alternate reality, the income tax is the only tax that causes the well-off, with their huge incomes, enough pain to lie and complain about, because the other taxes don't affect their quality of life AT ALL. Well, the inheritance tax does, but that's a separate story... Poor people pay all of the taxes rich people pay at the same rates--except the income tax. For the income tax, however, the poor pay payroll taxes which range between 7.3 and 10%, money they receive back when and if they file income tax returns. The undocumented, lacking SS numbers, can't get their federal or state income tax refunds and thus pay ALL taxes the rich pay. They also pay Social Security, Medicare and unemployment insurance taxes which they can never claim the benefit of. These payments they make benefit only us citizens. THINK ABOUT THAT. The undocumented, unless they work completely off the books (in which case they still pay all the other taxes other poor Americans do) pay the highest taxes relative to personal wealth of anyone in the country.
What could those other taxes amount to? Sales tax. Here in CA it is pushing 10%. Property tax is huge for people on a fixed income or just poor. 1% of the value of a tear-down in the SF Bay Area is many thousands. Due to the grossly inequitable property tax structure resulting from Proposition 13, the new purchasers of property pay tax at many times the actual value of long-term owners whose 1% rate may be based on an assessed rate as old as 1975. Liberals who own some of this old property are not calling for a fairer system. This measure was sold to the voter to benefit elderly people being pinched by the tax. How about the elderly super rich? Every year millions of poor people lose their homes either to foreclosure or unpaid property taxes. Car tax, gas tax, alcohol and tobacco tax. Highway tolls. Court costs and fines which push the poorest into debtor's prison or destitution. Building and other types of permit and fee costs, the list is much longer than this. Am I boring you, yet?
As a matter of fact, I left out payroll taxes. All those 47% pay payroll taxes at a much higher rate that their richer, better fellow citizens. A look at the table below will show that taxpayers in the top 10% pay at a rate half that of the majority. Taxpayers in the top .01% pay at only 10% of the rate of those in the middle. Incomes over $118,000 pay nothing additional at all. Between the time the payroll taxes of the lower income people are taken out of their paychecks and the same money is returned to them (if it is), a wealthy person's money which is not taken out is used to make more money. Does that make sense? The bottom 50% could be using their money for up to a year before they get it back in a refund--if they actually file properly and do so. It is difficult to explain something so unequal and unfair. Ben Stein, in the words of Al Franken, is a lying liar. He is just a Republican on message.
Republicans on this issue are simply LIARS. I can't stop myself from saying this. The truth feels so good, so right. I'm not calling names--I'm describing the truth value of their endlessly repeated libel on the 47/50%. This is not a pejorative opinion but a fact. The real question is, Why be liars? Why not give the less affluent their due for the combination of kinds of taxes and vastly higher percentage of individual wealth that they pay? Well, obviously because it's the truth! If the American people ever understand how they are actually being raped by the top 1%, bad things could happen, and nobody wants that, right? As for lying, it is dishonorable to knowingly attempt to deceive people, unless you do it for a living--like a CIA agent or a salesman.
The most savage of truths on taxes, is that poor people (in the US, millions of poor people are offended at being called "poor") provide with the ultimate tax: the "donation" of their children to serve as the cannon fodder for our military adventures since we decided after Vietnam to spare the better sort of people the need to sacrifice their precious sons to our idiotic wars by having a 100% volunteer force. These patriotic families have just spent 15 years with their father, mothers, sons and daughters fighting the wars for the other 98% of us at the cost of their death, dismemberment and mental destruction. Since US states have cut our higher education budgets to the bone, the only way most children of the poor can go to college is through tuition payments earned via military service--call that a "voluntary tax" Mr. Stein, if you are so heartless.
My point is just that it is shameful for Republicans like Stein and Romney and all the rest to continually deny the tax contribution and impactful tax burden of absurdly regressive taxes that people living near or below the poverty line make to our government operations year in and year out. There is a mental defect among Republicans and it is a form of ingratitude. Why deny that the poor make a tax contribution which is proportionately far in excess of your own when it is manifestly true? Everyone who lives here pays taxes. Illegal aliens pay taxes. Repeat after me: Everyone who lives in the USA pays taxes because we have taxes for everyone. Stop the LIE, Ben Stein.
And yet to think that the white portion of that ill-educated, brain-washed group will vote for Trump, who despises them, as Stein recommends! You gotta love this fucked-up country!