Tax Appeals Swamp U.S. Towns as Property Prices Dive

[marmar]

Dec. 8 (Bloomberg) -- A fiscal flood that threatens to swamp local government budgets across the U.S. overflows from file cabinets in the office of Patty Halm, chair of the Michigan Tax Tribunal.

The backlog of cases from taxpayers seeking to lower property-tax bills of more than $100,000 shot up to 14,236 this year from an annual average of about 6,000 during the past decade. The backlog of smaller claims was at 28,558 at the end of September, eight times higher than a decade ago, according to records at the tribunal, a Lansing-based administrative court.

From Los Angeles to Atlantic City, the New Jersey gambling resort whose credit rating Moody’s Investors Service cut by three levels last month, property owners are demanding lower taxes after real-estate values plunged. The disputes over billions in dollars come as municipalities are already slashing services such as police and fire protection and may depress revenue further as communities try to recover from the longest recession since the 1930s. In Michigan, Governor-elect Rick Snyder has warned that hundreds of towns face financial crises.

“We’re just getting swamped,” said Halm, 54, who was appointed in 2003. “We’re constantly buying new file cabinets to hold all the cases. We even have six surplus file cabinets in the courtroom.” .............(more)

The complete piece is at: http://noir.bloomberg.com/apps/news?pid=20601010&sid=aCamsvcqaN4E

[howaboutme]

1. Property taxes always were unfair and subjective

Property tax is one of those taxes that not only irritates people because it costs so much, but also because it is so inherently unfair, subjective and punitive. Value of a property is not determined until it is sold. Up until then it is a guesstimate.

A person should have the right to own their house without having to "rent" it from the government, and have them come in and take it from them if the "rent" is not paid. It is BS. It affects the elderly most as well as those who wish to keep up and improve their property. The concept is regressive.

Local government should be run on income and monetary wealth and a transfer tax on property wealth that could be paid for out of the proceeds when the property is sold.