3 ms·

I get the problem you are describing, but they don't have to do it for free. I think it would be perfectly reasonable to have penalties / accumulating interest

I get the problem you are describing, but they don't have to do it for free. I think it would be perfectly reasonable to have penalties / accumulating interest for late payment, and to sell the house if the total amount owed approaches a large % of the property value (and to charge an additional fee for selling the house). I think what people are objecting to here is confiscating the house over a tiny tax liability, selling the house for 1000x the tax liability, and pocketing the difference. For example, having a tax liability of $8, confiscating the house and selling it for $24000, then pocketing $23992 over the $8 tax liability. There's already a perfectly adequate way to address late property tax payments, charging interest. Either they pay and the city gets their money back (with interest), or they don't and the balance is eventually big enough to justify selling the property (so they get their money back with interest). It may be more lucrative for the city to confiscate the house immediately and make a 300000% profit on an $8 balance but it's hard to see how that's reasonable (and it seems like it will have to meet the "reasonable" threshold in order to be constitutional).

ilikehurdles 7y ago
They did charge interest and didn't confiscate it immediately. The thing is, the tax liability was actually about $500, it was owed in 2011, and it was still owed in 2012, at some point the owner entered a payment plan for a few years, and still owed money on the same bill after the plan. Regardless of the amount, at some point enough is enough and the state should act. The process where the department is obligated to return the positive delta to the previous owner after an auction is a self-bankrupting process. It starves the department of funds and leads to higher taxes to fund it while people are willing. It's classic libertarian starve-the-beast mentality to destroying public isntitutions. The department would have no incentive to sell for above market+interest prices and would burn through its budget on those properties not mentioned by Reason that are sold at a loss.
- throwaway34241 7y ago
  I still don't understand why the state needs to act (by confiscating the house) regardless of the amount. As long as it gets its money plus interest, what is the harm to the state by waiting? Sure, there will be a delay in payment, but if the interest rate is high enough that would be a benefit, for the same reason that it's better for credit card companies if the balance isn't paid off right away. I really don't see the problem with waiting. Either it's paid off with interest and the state is made whole, or they don't pay and they sell the house once it becomes a reasonable amount (and the balance is paid off with interest). Either way the state gets its money (plus interest). I'm not against raising revenue, but I don't think all ways of raising revenue are automatically good. For example you could also raise revenue by taking someones car if they don't have a current sticker on or get a parking ticket. Taking homes like this confiscates an almost random amount from people with no consideration of their means or the amount other people are paying. You could be confiscating most of the savings of a middle class couple near retirement for example, and by doing so make them contribute 100x what their wealthy neighbor does to government revenues. If there is no problem with collecting in a way where everyone pays the same and the state is reimbursed for any additional costs, they should do that. If they need more revenue, they should raise property tax, not play games where a few people pay 1000x more because a mail didn't reach them (and if you read the article, it seems like some counties were deliberately doing the absolute minimum notifying people so they could hit the jackpot).

ilikehurdles 7y ago

They did charge interest and didn't confiscate it immediately. The thing is, the tax liability was actually about $500, it was owed in 2011, and it was still owed in 2012, at some point the owner entered a payment plan for a few years, and still owed money on the same bill after the plan. Regardless of the amount, at some point enough is enough and the state should act. The process where the department is obligated to return the positive delta to the previous owner after an auction is a self-bankrupting process. It starves the department of funds and leads to higher taxes to fund it while people are willing. It's classic libertarian starve-the-beast mentality to destroying public isntitutions. The department would have no incentive to sell for above market+interest prices and would burn through its budget on those properties not mentioned by Reason that are sold at a loss.

throwaway34241 7y ago
I still don't understand why the state needs to act (by confiscating the house) regardless of the amount. As long as it gets its money plus interest, what is the harm to the state by waiting? Sure, there will be a delay in payment, but if the interest rate is high enough that would be a benefit, for the same reason that it's better for credit card companies if the balance isn't paid off right away. I really don't see the problem with waiting. Either it's paid off with interest and the state is made whole, or they don't pay and they sell the house once it becomes a reasonable amount (and the balance is paid off with interest). Either way the state gets its money (plus interest). I'm not against raising revenue, but I don't think all ways of raising revenue are automatically good. For example you could also raise revenue by taking someones car if they don't have a current sticker on or get a parking ticket. Taking homes like this confiscates an almost random amount from people with no consideration of their means or the amount other people are paying. You could be confiscating most of the savings of a middle class couple near retirement for example, and by doing so make them contribute 100x what their wealthy neighbor does to government revenues. If there is no problem with collecting in a way where everyone pays the same and the state is reimbursed for any additional costs, they should do that. If they need more revenue, they should raise property tax, not play games where a few people pay 1000x more because a mail didn't reach them (and if you read the article, it seems like some counties were deliberately doing the absolute minimum notifying people so they could hit the jackpot).