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Thread: The right kind of property tax vs. the wrong kind

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    Veteran Member Lumpenproletariat's Avatar
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    The right kind of property tax vs. the wrong kind

    Property tax assessment has always been a scandal, as shown by the following case, which might be a little worse than average, but the same corruption exists everywhere. There is a solution to this which would eliminate arbitrary "tax assessment" and replace it with market-based valuation of property. Many forms of this solution have been around for a long time but are taboo to the brain-dead idiots we put in power

    https://www.illinoispolicy.org/feds-...n-cook-county/

    FEDS INVESTIGATE PROPERTY TAX BRIBERY SCHEME IN COOK COUNTY

    Patrick Andriesen
    / GOOD GOVERNMENT
    JULY 19, 2021

    Feds investigate property tax bribery scheme in Cook County

    A Board of Review employee claims corruption is rampant in his Cook County office after an FBI affidavit states he was charging $2,000 to lower assessment on commercial properties and $1,000 for homes.

    A Cook County Board of Review employee has come under FBI investigation for allegedly accepting thousands of dollars in bribes to lower property tax assessments, according to a federal court affidavit obtained by the Chicago Sun-Times.

    The employee, an unnamed member of the administrative clerk’s staff, said the $43,000 he accepted in bribes was to be split with others in the Cook County office, insisting, “I’m just the middle guy.”

    The corruption claims involving the Board of Review are coming as property tax bills were expected to be mailed out. . . .

    The Cook County property tax scheme was revealed as part of a federal probe dating back to at least January 2019. The inquiry involves another unnamed individual secretly cooperating with the feds under a separate criminal investigation. That person has yet to be charged.

    According the 45-page affidavit, the cooperating witness approached the Board of Review worker about lowering property assessments in July 2020, eventually emailing the employee 18 commercial properties and seven residential properties owned by an associate on Jan. 5.

    The Board of Review employee under investigation told the witness later that day “everything’s doable” and allegedly offered to reduce property assessments in exchange for bribes.

    The Cook County employee charged $2,000 per commercial property and $1,000 per residential.
    I'll take a dozen.


    “Half now and half when it’s completed,” the employee allegedly said, later agreeing on $21,000 for the first payment. The affidavit contained a photo of the employee accepting the bribe in a Skokie parking lot Jan. 15.

    The employee sent the cooperating witness the reduced property assessment in May, reportedly saving his associated around $99,000.
    A good-day's pay for a good-day's work.


    The Board of Review worker then requested to meet with the witness to collect the second $22,000 payment July 1 for completing the task. The feds filed their affidavit June 30 to search the employee and his phone.

    After being made aware of the federal affidavit, Board of Review Commissioner Tammy Wendt told the Sun-Times, “It is not a surprise to me as I have discovered a culture at the Board of Review that believes it operates in a vacuum. I have pressed the issue of adhering to the Open Meetings Act, homeowner appeal denials, financial responsibility and other issues of concern in my short time at the Board.”

    “I hope this serves as a wake-up call to everyone. If this was truly an organized crew inside the Cook County Board of Review, we need to do a full forensic accounting of any and all work touched by those named in this investigation,” Wendt said.

    Commissioner Larry Rogers Jr. said in a written statement, “We take any allegation of impropriety very seriously and will be opening an investigation.”

    The exposition of an alleged pay-to-play scheme in the Board of Review coincides as Cook County residents prepare to shoulder one of the highest property taxes in the nation.

    Property taxes billed by Cook County’s local governments has been nearly triple the rate of inflation during the past 20 years, according to a study from 2020.

    Cook County residents pay an average effective property tax rate of 2.1% of their homes’ values each year – almost double the national average of 1.1%. That burden is not equally shared.

    Cook County performed worst among DuPage, Lake and St. Clair County for accuracy and fairness for assessing property values, according to an analysis of Illinois Department of Revenue data. This means properties with comparable features located in similar areas were more commonly assessed at different rates when compared to their county neighbors.

    Cook County also saw owners of higher-value residential, commercial and industrial property with lower levels of assessed value than owners of less expensive property. Wealthier property owners in Cook County tended to catch a break in their assessed values, while poorer property owners did not.

    While state residents expect higher property taxes to fund services that improve their communities and raise home values, less than 50 cents of every additional dollar paid in Illinois property taxes went to pay for services between 1996 and 2016. Meanwhile, 45 cents of every dollar went to supporting government worker pensions.

    Illinois’ worst-in-the-nation pension crisis consumed 26.5% of the state’s total operating budget in 2020, up from less than 4% in 1990 through 1997. As a consequence, increased pension contributions have diverted property taxes from spending on core services that benefit the community and raise home values.

    Curbing the growth of future, unearned public pension costs by amending the Illinois Constitution is a major element in digging out of the $317 billion pension hole and controlling the rise that make Illinois property taxes second-highest in the nation.


    The Solution to this

    Have all property owners put their property up for sale, perennially. Have them declare the selling price at which they are prepared to sell the property.

    The exact rules, precise conditions, are not what's important. But it might be something like this: If the owner receives 3 offers, then s/he is required to sell. To avoid selling, the owner only needs to increase the selling price after receiving 2 offers.

    To prevent excess offers, the buyers must pay a deposit, such as 10% of the selling price, and this would be refunded to the buyer only if there's no sale. And also there needs to be a nonrefundable price paid in order to register the offer. The buyers are entitled to some protection, but they must be discouraged from making non-serious offers.

    By having the owner required to declare the selling price, the need for the tax assessor is eliminated, because the real value is fixed by the market -- by the seller/owner and buyer -- reflecting the true value of the property rather than an arbitrary assessment by a public official who is easily subject to corruption/bribery.

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    Contributor skepticalbip's Avatar
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    Corrupt government officials in Cook county? what a surprise... not.

    But your "solution" sucks. Why put a burden on the home owners? A better solution for this particular corruption would be much higher punishment for the corrupt government officials. Maybe a mandatory ten year prison sentence for any government employee caught soliciting or accepting a bribe.

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    Quote Originally Posted by skepticalbip View Post
    Corrupt government officials in Cook county? what a surprise... not.

    But your "solution" sucks. Why put a burden on the home owners? A better solution for this particular corruption would be much higher punishment for the corrupt government officials. Maybe a mandatory ten year prison sentence for any government employee caught soliciting or accepting a bribe.
    I thought Lumpenproletariat's solution was quite clever! It's flawed: many property owners will have reasons of sentiment or convenience that make them unwilling to sell for MUCH more than the market price, but maybe there are clever workarounds to address that.

    But I also do agree with you about penalties for corruption. It is outrageous how much bribery is accepted in the USA. (There was a Governor who took several $100,000 in bribes, but had his conviction overturned a few years ago because there was no "smoking gun" audio recording where an explicit quid pro quo was arranged.)

    In the USA, people have been executed on the spot for selling loosies, or attempting to pass a counterfeit note. I'd be happy to see capital punishment for bribed government officials.

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    Fair dinkum thinkum bilby's Avatar
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    Quote Originally Posted by skepticalbip View Post
    Corrupt government officials in Cook county? what a surprise... not.

    But your "solution" sucks. Why put a burden on the home owners? A better solution for this particular corruption would be much higher punishment for the corrupt government officials. Maybe a mandatory ten year prison sentence for any government employee caught soliciting or accepting a bribe.
    Mandatory sentencing is a generally bad idea, not least because it constitutes an unwarranted intrusion by legislature on matters that are properly the remit of the judiciary.

    Every case is unique, and setting a minimum penalty is a dangerous thing to do.

    If you want to deter crime, this can be achieved by setting a high(er) maximum sentence, and allowing judges to impose those in cases where the evidence and facts indicate that it is warranted to do so.

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    A major problem with the solution in the OP is that a potential buyer would have to inspect and make offers to many properties before they make one to someone who wants to accept it. This will make buying and selling very expensive.

    A better solution is to have everything open. It should be easy to find out how much property taxes are for any property. Then if you find your neighbour is paying far less than what you are then you should be able to find out why. Revenue will then go down and enquiries will be made.

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    Comrade, is there something related to social science here or is this a spam alama ding dong song?

    Yes taxes are problematic at times and property owners pay for things like schools, would you like to offer a 'political' alternative that is more workable?

    The thing about Marx and people like him in modern history is that they never have had to actually deal with practical realty and make something work with real not ideal people.

    Using Marx as a guide is akin to using Trump as a guide for business. Some people hang unto Marx even with the failed experiments that all turned opressive, some hang onto Trump as a biasness guru despite all his business failures..

    I like Bernie's idea, everything should just be free.

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    Quote Originally Posted by rjh01 View Post
    A major problem with the solution in the OP is that a potential buyer would have to inspect and make offers to many properties before they make one to someone who wants to accept it. This will make buying and selling very expensive.

    A better solution is to have everything open. It should be easy to find out how much property taxes are for any property. Then if you find your neighbour is paying far less than what you are then you should be able to find out why. Revenue will then go down and enquiries will be made.
    I already do this, sort of, by looking up local properties for sale on realtor.com. The taxes are very inconsistent and I doubt it's due to corruption in my town. I think it's more due to incompetence. I'm pretty sure that property taxes are public records, which one can probably ask to see, but I don't know the process or if there is a cost to requesting public records.

    So, I strongly agree that the solution offered in the OP isn't a realistic one. There are other ways to check to see what one's neighbors are paying in property taxes. Plus, if you have a few friendly neighbors, you can ask. I know that my next door neighbor pays about 1/4 of what I do, despite her home being worth about 1/2 of what mine is worth. Why is that? I don't think those who do the assessments are very good at it. We tried to appeal our last assessment, but we lost. Perhaps this discussion would fit better under miscellaneous.

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    Mazzie Daius fromderinside's Avatar
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    Make tax payment voluntary. Link payment to uses for which tax goes. Adjust use expenditures to address to what payer contributes. Fine owner if uses are not up to code by the amount code meeting costs plus government costs for updating. Automate the whole damn thing.

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    Quote Originally Posted by steve_bank View Post
    Using Marx as a guide is akin to using Trump as a guide for business. Some people hang unto Marx even with the failed experiments that all turned opressive, some hang onto Trump as a biasness guru despite all his business failures..
    Lumpen isn't a Marxist and that wasn't a particularly Marxist proposal. Seems like a bad idea to me, though. I can think of several better ways off the top of my head to use market-based pricing to eliminate the possibility of assessor corruption.

    1. Pass a California-style Proposition 13. Tax is based on most recent sale price.

    2. The government doesn't get money when it taxes property. It gets a lien: a claim on X% of the sales price of every house when it is next sold. If that doesn't satisfy the government because it wants its money now, it's free to sell the lien on the open market for whatever price the market will bear. If the homeowner doesn't want to give up X% of the equity in his house he's free to bid on the lien along with everyone else. If the liens amount to more than 50% when the homeowner dies then the probate court is allowed to sell the house over the objections of the heirs.

    Or best of all,

    3. Abolish property taxes. Raise the income tax to make up the lost revenue.

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    Quote Originally Posted by Swammerdami View Post
    Quote Originally Posted by skepticalbip View Post
    Corrupt government officials in Cook county? what a surprise... not.

    But your "solution" sucks. Why put a burden on the home owners? A better solution for this particular corruption would be much higher punishment for the corrupt government officials. Maybe a mandatory ten year prison sentence for any government employee caught soliciting or accepting a bribe.
    I thought Lumpenproletariat's solution was quite clever! It's flawed: many property owners will have reasons of sentiment or convenience that make them unwilling to sell for MUCH more than the market price, but maybe there are clever workarounds to address that.
    I don't think there are, and I think it could be use abusively by the big guys.

    There's also the problem that property has different value to different users, even if it is otherwise identical. Suppose you engage in pigeon racing--if you move you can't race again until you have a new generation of birds, the old birds are useless other than as breeding stock.

    But I also do agree with you about penalties for corruption. It is outrageous how much bribery is accepted in the USA. (There was a Governor who took several $100,000 in bribes, but had his conviction overturned a few years ago because there was no "smoking gun" audio recording where an explicit quid pro quo was arranged.)

    In the USA, people have been executed on the spot for selling loosies, or attempting to pass a counterfeit note. I'd be happy to see capital punishment for bribed government officials.
    Yup. I'd like to see the law changed on corruption, the prosecution still has to prove it waddles and quacks (the payment and the favorable action), but at that point the burden of proof shifts to the defense to show that wasn't corruption--there's no need to prove they agreed to an improper deal.

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