Dan Cook: Medieval property tax system needs to go
CHARLESTON, W.Va. -- Everywhere and every time there is going to be tax levy on the ballot, a clamor arises that only property owners should have a vote "because renters don't pay real estate taxes."
Paraphrasing one punch line from that late Cajun comedian Justin Wilson, "The hell they don't!"
In 1966, I started an apartment building with my own hands on land I owned near Princeton. By 1971, I had 10 units on which the annual commercial-rate property taxes (twice those of private homes) had risen to about $1,000. In calculating how much rent to charge, I added taxes to the other expenses, then "a little something for us."
Ten years later, it was Mercer County's turn for out-of-state appraisers to reassess everyone's property under a state-ordered revaluation scheme. The next year, my tax bill jumped from $1,000 to $4,500, due six weeks later. Actually, it was my tenants' tax bill, because I was forced to raise everyone's monthly rent by $40, a total of $4,800, because I had to allow for apartments sometimes being vacant or tenants skipping out. Those times when the rent stopped, the taxes did not. Like all other "taxes on business," my "customers" paid them.
So, not only did tenants pay rental-property business taxes at double the rate of surrounding single-family homeowners, they also paid taxes on empty apartments and for the deadbeats. That was true in Mercer County and everywhere else, then and now.
There are logical and valid arguments for and against any tax on an owner-occupied single-family home.
Indeed, school funding is at the mercy of an easily swayed electorate. But what sways them? Even though they have finally paid off their mortgage and insured their home and kept it well maintained, the annual "rent" to the county never ends and has no limit -- except through the people's right to vote on levies. The dark clouds of "reassessments" and losing one's home to the sheriff is ever-present, especially to those working poor who inherit or are industrious enough to proudly buy a home but have to struggle all their lifetime on limited income. How discouraging to those when asked to "vote yes!"
Still another is that the more homeowners conscientiously improve and the better they keep up their property, the more they are rewarded with a bigger tax bill. Thus is deteriorated property and slum-lordism encouraged by the law.
Our property tax system is a hand-me-down from medieval European kings, who taxed the lords and landlords because they were the few who owned the land and made income from it. Most people worked on those lands, urban and rural, that they could never own. Their rents became taxes collected for the king by local sheriffs, using intimidating police and civil enforcement powers. America's Founding Fathers were remiss in not constitutionally prohibiting this carry-back to oppressive Olde England that penalizes working people for bettering their lot.
The only good thing about real estate taxes is that they keep abandoned property in circulation by means of the sheriff's auction. The same result could be obtained with an annual flat "license" fee of, say, $100.
The "lost" revenue could be offset first by consolidating our 55 counties into 9 and merging assessment and collection into one "revenue" office, saving hundreds of millions. The balance could be obtained by expanding the upper brackets of the income tax, so that we who benefited most from a "free" education pay more for it.
Cook is an author, artist and inventor who lies in Hurricane.