The Elimination of Property Tax, Explained

Elimination of Property Tax

Property tax is the most immoral of all taxes because it is the state’s way of deifying itself by claiming that it owns everything, and then forcing you to pay an annual tax on property that is supposed to be yours. But if you have to pay a tax on it forever, or it is taken away from you, then how is it actually yours?

People everyday in Idaho are losing their homes to state officials because they can’t pay the property tax. It is the elderly that lose their homes the most, but people that find themselves without a job for a period of time or disabled are losing their homes to the state as well.

The right to own and control your own property without paying someone to keep it, is the American dream! Taxes based on ownership of property were used in ancient times by British and European kings or lords who claimed that all the land belonged to them and the peasants had to pay them to use it. Property tax in Idaho is no different. We have to pay state officials until the day we die, or they will take our property.

The father of communism Karl Marx said in his Manifesto of the Communist Party “Communists may be summed up in the single sentence: Abolition of private property." Marx also said, “Private property has already been abolished for nine-tenths of the population. In other words, as long as the economy is run by a few wealthy people in their own interest, the working class won't be able to achieve prosperity.” In effect, the State of Idaho is enforcing a portion of communism upon Idahoans, and they do it in the name of "property tax".

What if there was a way to rid ourselves of this communistic type control on private property and still have a way to fund the legitimate purposes of local government? I believe there is! So rather than abolishing private property, let’s abolish property tax and replace it with a moral consumption tax.

Let me explain: The average home in Idaho is valued at around $400,000 (I know its crazy, right?, but that’s what the average home cost is in Idaho). Using that average home value (depending upon the county) a home owner would pay $2,000 to $3,000 in property tax every year. That’s $60,000 to $90,000 in a 30 year period. Remember that amount $60,000-$90,000.

That is a lot of money going to the state, but the worst part of property tax is you never own your home!

So let me show you how we can get rid of property tax by implementing my Keep Idaho IDAHO plan. Let’s take that same $400,000 home. At the time of purchase the new owners would pay around 5% of the home value to the state (consumption tax). That amount can be rolled into the mortgage and the state would have no interest at that point in your property. Once the mortgage is paid off you own your home free and clear and it can never be taken from you by the State.

Now, if you have done the math at 5%, a $400,000 home would bring $20,000 to the state each time it is sold. You may be saying, that’s a long ways away from $60,000-$90,000 dollars compared to the property tax revenues over 30 years. However, you must calculate that the average home in Idaho sells 3 to 5 times in a 30 year period. That would bring $60,000 to $100,000 to the state in replacement of property tax. More than enough!

So, what’s the main difference between the current property tax system and my Keep Idaho IDAHO plan? Both bring approximately the same amount to the state, but with my plan, you own your own home and state officials can’t take it from you for not paying them!

Q&A

Question:  What about the people that currently have property in Idaho, would they keep paying property taxes?

Answer:  For a period of time (estimated 5-7 years) the state would graduate into the consumption tax system and completely eliminate property tax. During this period, those who own property, purchased before the period began, would continue to pay a property tax until the period ends.

Question:  Would the consumption tax for sure be 5%?

Answer:  No, the consumption tax may only need to be 2-4%, depending on the needs of the state determined by the state legislature. In my plan the legislature would cap the tax percentage to 5% and each county can set the tax amount below 5% if they decide to. 

Question:  Why is consumption taxes moral and property tax immoral?

Answer:  With consumption tax on property at the time of purchase the person only pays a tax one time when they purchase the property. The person chooses to pay the tax by deciding to purchase the property. With our current  property tax system state officials force you to pay them to use the property every year, forever, you don't have a choice and you never completely own your property after you pay it off.

Comment: Bundy's proposal for getting rid of property tax is an additional sales tax that can be incorporated into the property loan. What he is proposing is basically a lien. His proposed decreased rate at 5% for a $200k home purchase, would add $10k to the loan, plus compounded interest. If that amount isn't paid off by the time the house is sold, the owner is still on the hook to pay that sales tax. By his logic that a 5% sales tax per $100k is comparable to 30 years of property taxes, if that house is sold two, three, or X number of times in 30 years, the City has actually collected X times the amount they would have through property…

Answer: My tax plan is very simple and so is the math, it protects people’s private property and still pays for the legitimate needs of the local government. 

This person has not understood my plan or intentionally wants to make it look complicated so others reject the simplicity and protection of the plan. Their logic is wrong, as well.

Currently the average home in Idaho is around $400,000. Under our current property tax system this home would bring in $2000-$3000 in taxes each year to the State. However, if you can't pay the property tax, the State WILL TAKE YOUR HOME.

Under my plan, when that same $400,000 home is sold, the purchaser would pay a consumption (sales) tax due at the time of purchase. If the consumption tax was set at 5%, then $20,000 would be due to the State at the time of purchase. After the purchase, the property is yours and the State has no interest or right to lien or take the property. If a person needs to roll the amount of the consumption tax into the loan to pay it off over time, then that is between the bank and them; the state has nothing to do with it. Of course the bank will want some interest, but it is much better than the State being able to take your home anytime you can't pay the tax, and the monthly amount would be nearly the same as monthly property taxes that are impacted. 

The average home in Idaho sells 3 to 5 times in a 30 year period so the State will bring revenue enough to pay for the legitimate purposes of local government like schools, roads and sheriffs. In my plan the Legislature would cap the tax percentage to 5% and each County can set the tax amount below 5% if they decide to. 

My plan is simple math, straight-forward, protects each person's private property, and still pays for the needs of legitimate government.

Other Benefits & Negatives

[+] With a consumption tax system the country (state) will have funds up front to build roads, utilities and infrastructure rather than needing to take out large bonds with heavy interest.

[-] For those who choose to add the consumption tax to a mortgage, interest may be accrued.