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Guest Post: Could Declining House Values Spark The Next Taxpayer Rebellion?

Tyler Durden's picture


Submitted by Charles Hugh Smith from Of Two Minds

Could Declining House Values Spark the Next Taxpayer Rebellion?

You might think property taxes have declined 30%, paralleling declines in housing values. But nope--property tax revenues have shot up 27% just since 2006.

Something remarkable happened to property taxes in the U.S. while housing lost 31% of its value from 2006 to 2009: they went up by $100 billion (27%). Equally remarkably, as we can see from this U.S. Census Bureau data on state and local tax revenues, property taxes went up even when housing slumped in the early 1990s.

So though U.S. housing continues losing value--U.S. home prices declined in January, continuing a downward trend that began in August, with average U.S. home prices retreating to summer 2003 levels, according to the S&P Case-Shiller home-price indexes--property tax revenues continue their inexorable rise.

I've plotted out the total national property tax revenues on a chart of the Case-Shiller home-price index.

According to the Bureau of Labor Statistics inflation measures, if property taxes had risen along with inflation, the total property tax revenues nationally would have risen from $210 billion in 1996--more or less about the start of housing's decade-long bubble--to $296 billion in 2011.

But property taxes totaled $476 billion in 2009, a solid 60% ($180 billion) above inflation.

So even as the net worth of property has fallen by a third, the property taxes collected from the owners have risen 27%. Exhibit A in this ceaseless rise of property tax revenues is the structural shortfalls in state and local government budgets between what was promised to various fiefdoms and constituencies at the apex of various bubbles, and what is sustainable in non-bubble times. Here is a chart of California's systemic gap between revenues and expenditures. Please note that the apparent alignment of revenues and expenditures in 2010-11 is entirely illusory: the budget gap is $26 billion or perhaps more, once the fantasy accounting is removed.

And here is a chart of house prices in a classic symmetrical post-bubble deflation. I've drawn a target which is drawn from the reversion-to-the-mean model that the majority of bubbles track: prices don't just retrace to the starting lift-off point, they overshoot to a level below that initial line.

As I reported in House Values Fall 30%, But Property Taxes Keep Rising  (December 22, 2010), the nation's state and local governments will collect an estimated $476 billion in property taxes in 2010--about 90% of state income tax revenues of $250 billion and sales tax revenues of $286 billion combined.

A decade ago, property taxes were roughly equivalent to sales taxes. In 2000, property taxes totaled $247 billion and sales taxes came in at $223 billion-- a differential of roughly 10%. Sales taxes have increased by 28% since 2000-- roughly in line with the rise in consumer prices.

State income taxes have risen nationally from $217 billion in 2000 to $250 billion in 2010, after peaking at $303 billion in 2008, just as the global financial meltdown began. That's a rise of $33 billion, or 15%--actually less than inflation (27% from 2000 to 2010).

Add all this up and we can see that local governments have become far more dependent on property tax revenues than they were in 2000. Thanks to stiff increases in junk fees and taxes of all kinds, state and local government revenue has climbed back to its pre-recession height of $1.29 trillion, roughly equal to the $1.32 trillion collected in 2008. In terms of total tax revenue, the recession is over--yet the gap between expenditures and revenues continues to widen in most states and local governments.

As their properties continue sliding in value, devastating their net worth, do you reckon the average homeowner might start resenting the rapid rise of the taxes they pay for the privilege of owning real estate?

Imagine if your income taxes rose by 27% even as your income declined by 30%.

The ultimate tax hostage is the property owner. The business owner can pull up stakes and leave, the wage earner can transfer or get another job elsewhere, and the consumer can restrict his/her consumption to lower the burden of sales taxes, but the property owner is the perfect tax donkey because the transaction costs of selling are so prohibitive.

With some 11 million homeowners owing more on their mortgage than their house is worth, i.e. they are underwater, then selling is no longer an option unless the bank accepts a short-sale--something the lenders are loathe to do.

Given that there's about 48 million mortgaged homes now, then those 11 million represent about 23% of all homeowners.

How long will property owners keep swallowing significantly higher property taxes even as the value of their real estate continues declining? It's an open question. I suspect the answer won't be known until some invisible breaking point is reached, and voters simply rebel against higher taxes while their own net worth and incomes stagnate.

Just because there is little visible resistance to sharply higher property taxes (and other taxes and junk fees as well, of course) doesn't mean resistance isn't building below the surface, unreported by a financial media obsessed with the S&P 500 as the only metric of wealth and prosperity and unnoticed by state and local governments obsessed with stripmining more tax revenues by any means at hand.

The tax donkey is already weighed down with a heavy load, and it won't take much more than a double-dip recession, higher prices for essentials and declining home values to snap the pack animal's weakened back.

The rising S&P 500 looks good as propaganda, but for most Americans, that's about as edible and nourishing as an iPad.


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Wed, 03/30/2011 - 09:39 | 1116563 cranky-old-geezer
cranky-old-geezer's picture

NEXT taxpayer rebellion???????

I haven't seen the first one, and really doubt there ever will be one. 

Wed, 03/30/2011 - 09:40 | 1116573 franzpick
franzpick's picture

The RE tax rebellion is strong and growing.

Wed, 03/30/2011 - 10:11 | 1116708 Sudden Debt
Sudden Debt's picture

People should realize that this tax actually keeps the homeprices from dropping much harder and puts a brake on new constructions which could overheat the housing market even more.

In this case, "tax rebellion" is not in place and now is a good thing.


Wed, 03/30/2011 - 10:20 | 1116739 Dr_Dazed
Dr_Dazed's picture

So high taxes support housing prices?  How does that work?  You also say that the housing market is "overheated"?

Which planet are we talking about Mr. Spock?

Wed, 03/30/2011 - 10:43 | 1116835 Jay Gould Esq.
Jay Gould Esq.'s picture

As Beldar Conehead once said, "We're from France."

Or, in S-D's case, Belgium. Same difference.

Wed, 03/30/2011 - 12:50 | 1117571 famousamos
famousamos's picture

"We went to the moon, we can surely balance the budget!" ~ Some talking head on FOX last night

"Man... on the moon... HAHAHAHAHA!!!" ~ Mr Conehead

Wed, 03/30/2011 - 10:46 | 1116848 TBT or not TBT
TBT or not TBT's picture

Public employee unions and their bought and paid for legislators are the problem driving up state and local taxes (and debt).   Bills to simply prevent automatic deduction of unions dues from public employee pay are causing them to go the mats and entire democratic caucuses to flee their states to avoid votes.    

Now in Wisconsin a liberal judge has stopped the law that would prevent this, while lefty statist assholes militate for getting a judge to the state bench who'll put things back to normal..i.e. your taxes going directy into democrats campaign funds.

Wed, 03/30/2011 - 11:01 | 1116922 writingsonthewall
writingsonthewall's picture

" lefty statist assholes"

Glad you put so much effort into your analysis - did you think that up all by yourself or did you get help from your 'carer'?

Good thing the average republican understands fuck all about economics - otherwise the Government would never get away with their robbery of the taxpayer.


No bend over and stop complaining - you're about to get royally screwed you schmuck.

Wed, 03/30/2011 - 15:45 | 1118498 Fascist Dictator
Fascist Dictator's picture

3 week old Troll

Wed, 03/30/2011 - 11:03 | 1116928 markelshark
markelshark's picture

I smell bullshit. It doesn't matter who is in office: Democrats or Republicans. Both parties have spent us into this hole.

Wed, 03/30/2011 - 11:22 | 1117043 TBT or not TBT
TBT or not TBT's picture

Let's see, public employee unions send just about all campaign contributions to Democrats, and Democrats expanded benefits and pay of public employee unions, as well as their numbers.    That's uni-partisan there, markelshark.

As to deficit spending, compare any deficit under Obama to the very worst deficit year under Bush.    The Pelosi-Reid Congress in power two years before Owebama descended to the throne also has something to do with it.     The Democrats are the Government Party, beholden to public and private unions' economy crushing featherbedding.

Wed, 03/30/2011 - 12:35 | 1117494 lostintheflood
lostintheflood's picture

junked you for watching faux entertainment and then repeating their bullshit.

Wed, 03/30/2011 - 13:00 | 1117625 percolator
percolator's picture

And what have the Republicans done about it?

Demoncrats and Rethuglicans, they're both the same other than their views on wedge issues which make it appear to the sheeple that there's a difference between these 2 corrupt parties.

Wed, 03/30/2011 - 12:09 | 1117357 Auric Goldfinger
Auric Goldfinger's picture

Junked you for elevating the discourse. 

Wed, 03/30/2011 - 12:01 | 1117291 Golden monkey
Golden monkey's picture

I think there will be rebellion in the US, but not related to housing price.

The reason for that is simple : owning a house (especially using mortgage) is an act resulting of social conformity. (Owning silver bullions for the first time in 2010-11 in an act of rebellion, though).

That kind of sheeple will hesitate before joining the rebellion. 

The (housing) tax is like a hook on the balls of those sheeple. Maybe tax will add an extra 5% rioters. Because when you squeeze a chicken by the neck and you make the grip tighter, the chiken could become suddently very mad...

Wed, 03/30/2011 - 09:41 | 1116583 SheepDog-One
SheepDog-One's picture

The only possibility of any type of 'rebellion' in this country seems to be if McDonalds should run out of Chickin McNuggets. 

Wed, 03/30/2011 - 10:04 | 1116676 Infinite QE
Infinite QE's picture

And if the homies get their welfare cards cutoff!

Wed, 03/30/2011 - 10:08 | 1116682 Alcoholic Nativ...
Alcoholic Native American's picture

Or if the McMansion monkeys have to actually start paying their mortgage.

Get it? McMansion Monkeys?  A play off of Porch Monkeys, I made that up myself.

Wed, 03/30/2011 - 10:20 | 1116747 SheepDog-One
SheepDog-One's picture

WHOA nice work Mephisto!

Wed, 03/30/2011 - 10:14 | 1116720 Sudden Debt
Sudden Debt's picture

Word like that could cause a Run on the McDonalds and triggering a shortage of McNuggets which could lead to a world depression.

Better be carefull what you say!



Wed, 03/30/2011 - 10:20 | 1116746 I Am The Unknow...
I Am The Unknown Comic's picture

Official Fed Chief Clown Benold McBernakold press release:  "The fundamentals of the Micky D economy are sound.  The issues with the sub-prime BBQ dipsauce should be contained and should not affect other, better dipsauces such as Sweet-N-Sour and Honey, nor should it affect the broader McNugget market."


Wed, 03/30/2011 - 10:50 | 1116874 Loose-Tools
Loose-Tools's picture

But... if in the future you ever need to hoard, you could store them in the open air at room temperature and they would never spoil!

Wed, 03/30/2011 - 12:10 | 1117353 New_Meat
New_Meat's picture

call 911

Wed, 03/30/2011 - 09:42 | 1116590 Head for the Hills
Head for the Hills's picture

Taxpayer rebellion is simple.

Convert all assets to gold and bury it in the country. 

Apply for foodstamps, disability and welfare.

Declare victory and never pay another net dollar in taxes.


Wed, 03/30/2011 - 09:50 | 1116620 Alcoholic Nativ...
Alcoholic Native American's picture

What if you don't have any assets? Is it still rebelling if you apply for food stamps disability and welfare?

I'm in!  Let's do this guys.

On a serious note, a lot of people here in Georgia if they have a lot of property they simply build a church on it and they get tax cuts!

Wed, 03/30/2011 - 10:14 | 1116712 CitizenPete
CitizenPete's picture

Georgia?... now I understand how you got Iraq and Israel confused in your previous comment about 9/11. Too much vitamin J.

Wed, 03/30/2011 - 09:55 | 1116631 Popo
Popo's picture

People are finally realizing that housing is not only a terrible investment, it's exposure to infinite taxation.   Buy real estate and you are officially a serf:  bound to the land.

Besides, there's no such thing as real estate ownership in the USA.   All real estate is rented from the government.   Go ahead and try to stop paying your rent (sure, call it "taxes" if it makes you feel better), and the actual 'owner' will show up and kick you out.




Wed, 03/30/2011 - 10:01 | 1116653 Alcoholic Nativ...
Alcoholic Native American's picture


fuck this so called "ownership society" that was pushed during the dark years when Iraq was blowing up the world trade towers.

Rents are going up too though, good thing im locked in in my non adjustable rate 225 dollar rent.

The cost of living is going up in America.  I guess that's just the cost of freedom.  Right?

You are right about paying rent, a couple of deadbeats thought they were gonna stay in my parents property but woke up to a rude awakening, not only were they booted the fuck out, sheriff came and took all their stuff and auctioned it off to pay up.


You don't want to piss off actual paying landlords in this stressful enviroment.

Wed, 03/30/2011 - 10:54 | 1116899 Bicycle Repairman
Bicycle Repairman's picture

"Iraq was blowing up the world trade towers."

I think you mean when the Germans were bombing Pearl Harbor.

Wed, 03/30/2011 - 11:04 | 1116943 Idiot Savant
Idiot Savant's picture

You beat me to the punch BR - I hope the guy is just being sarcastic.

P.S. - I thought Israel bombed Pearl Harbor....

Wed, 03/30/2011 - 11:18 | 1117004 TruthInSunshine
TruthInSunshine's picture

The Persians sacked Rome, Ghengis Khan invaded Poland, Iraq blew up WTC, Germany bombed Pearl Harbor, Mark David Chapman assassinated Kennedy, Alexander the Great invaded the Falkland Islands, Lee Harvey Oswald shot J.R., and Tupac killed Archduke Franz Ferdinand.

Wed, 03/30/2011 - 12:26 | 1117440 sunkeye
sunkeye's picture

yeah and custer's triumphant return to the phillipines

now dont bother me im cramming for  my bong architechture final ie im beta testing  the class project prototype 


Wed, 03/30/2011 - 11:06 | 1116947 TBT or not TBT
TBT or not TBT's picture

So then, rent control boy, Iraq blew up the world trade towers?    You should contact Oliver Stone immediately!

Wed, 03/30/2011 - 12:05 | 1117328 Golden monkey
Golden monkey's picture

"Iraq was blowing up the world trade towers."


Breaking : A monkey just busted an overweight troll. (Our special report tonight : "Dick Cheney : a man with a heart of gold").

Wed, 03/30/2011 - 10:01 | 1116663 pazmaker
pazmaker's picture

so what do you do Popo?  Homeless?(very uncomfortable lifestyle)   Rent?(you still are paying a master)......   You have to live somewhere right?

I'm not being sarcastic but realistic...what other options do you have?

Wed, 03/30/2011 - 10:06 | 1116675 Alcoholic Nativ...
Alcoholic Native American's picture

Do like what most people in my generation are doing, move back in with mommy.  I lucked out and found a landlord I knew that gives me a good price and no credit/job check.

Wed, 03/30/2011 - 10:11 | 1116709 pazmaker
pazmaker's picture

Ahh that is an option...I have one moving back in with me in July... I don't have any plans on selling so the value of the house to me is that I have a safe secure place to live. I'm in a rural area and trade with some of the neighbors. eggs, vegatables goat cheese etc.


So the value to me is not what someone would give me for it.


Wed, 03/30/2011 - 12:09 | 1117343 Golden monkey
Golden monkey's picture


I swear to God just seconds before I read him, I was thinking that I was fucking his mom...

Wed, 03/30/2011 - 15:36 | 1118466 Bagbalm
Bagbalm's picture

Motorhome? Tent/\? Charity shelter. Cave.

Wed, 03/30/2011 - 11:11 | 1116973 MachoMan
MachoMan's picture

Popo, the ability to tax real estate is a fundamental check and balance of the system.  The trick is to identify who is the central taxing authority for real property.  Yep, the LOCAL government...  that part in which we should be most able to influence...  Further, this taxing authority essentially gives cities/counties the inherent authority to extract taxes from unwanted foreign intruders...  (for example, massive amounts of land held by TBTF banks).

Now, if you want to talk about our local voting process being controlled by government employees, then I'm all ears...  but, that doesn't change the fact that it's a necessary right to local governments in the scheme of things...

Wed, 03/30/2011 - 10:47 | 1116851 baby_BLYTHE
baby_BLYTHE's picture

Gerald Celente no longer predicts civl unrest in the United States!

"There will be an increase in crime, but no civil unrest. The American people are too Snooki stupid"

Guess it's time to think about consuming some of the supplies I stored for prep. Also think about unloading some PMs in the near future.

Wed, 03/30/2011 - 11:29 | 1117074 chumbawamba
chumbawamba's picture

What he didn't say but what you would understand if you've been following along for the past few years is that it'll be worse than civil unrest, because Americans will simply roll over and accept fascism.  In fact, the transition has already happened and is nearly complete.

Abandon all hope.  Get ready to fire.

Wed, 03/30/2011 - 11:44 | 1117174 baby_BLYTHE
baby_BLYTHE's picture

locked n' loaded

Wed, 03/30/2011 - 13:10 | 1117691 cranky-old-geezer
cranky-old-geezer's picture

Fire at what?

Wed, 03/30/2011 - 09:37 | 1116567 franzpick
franzpick's picture

Strike 1

Wed, 03/30/2011 - 09:39 | 1116574 lordbyroniv
lordbyroniv's picture

My water bill is also up, are my gas..and my electrcity.


This is getting totally nutz !!!!!!

And yes,...prop taxes are up.


I am sick of this government.  sick.  sick.  sick.


Looks like the banksters want everyones we all default.


That is the trend.


Wed, 03/30/2011 - 09:52 | 1116622 Alcoholic Nativ...
Alcoholic Native American's picture

Freedom isn't free.  Support the troops/IRS.

Wed, 03/30/2011 - 11:09 | 1116969 TBT or not TBT
TBT or not TBT's picture

There's a hefty fuckin' fee.   Freedom costs a buck oh five.

Wed, 03/30/2011 - 11:49 | 1117211 Two Face
Two Face's picture

I went back and checked my water/sewer/garbage utility bills for the last 5 years just to see how much rates had changed over that time period.  Lo and behold, the rates for each were up between 52-55%.  I about shit a brick when I saw the numbers.  CPI of 1-2%/yr, my ass!

Wed, 03/30/2011 - 09:39 | 1116576 pazmaker
pazmaker's picture

Property taxes where I live are .445 per $100.00  fairly reasonable, however the trick is constant reevaluation by the municipality and listing values higher and higher every year is how they raise taxes.  So even though property values have decreased, the county claims our property is worth more.

Wed, 03/30/2011 - 09:44 | 1116593 LawsofPhysics
LawsofPhysics's picture

I have fought this twice in two years and won.  It is even worse for a successful business property.

Wed, 03/30/2011 - 17:48 | 1119059 buzzard
buzzard's picture

+1776 Now you're talking. We in our small community are organizing pre-empively for when the show down comes. Here land is either commercial or agricultural- those are the choices. Har-de-har-har...

Wed, 03/30/2011 - 09:45 | 1116605 SheepDog-One
SheepDog-One's picture

See thats where you fall into the hole, judging how much they tax you at gunpoint on something YOU 'own' as 'Meh, seems pretty fair to me' dont own your property if youre paying someone else! Its slavery, yet americans find it acceptable, and people wonder why the govt treats you like a peasant.

Wed, 03/30/2011 - 09:54 | 1116632 pazmaker
pazmaker's picture

so you don't pay property taxes sheepdog?  If you rent you pay them indirectly.

Enlighten us all and tell us how you get by without paying property taxes.

Wed, 03/30/2011 - 10:10 | 1116701 FEDbuster
FEDbuster's picture

I'm goin' home
And when I wanna go home
I'm goin' mobile
Well, I'm gonna find a home
ON WHEELS, see how it feels
Goin' mobile
Keep me movin'

I don't care about pollution
I'm an air-conditioned gypsy
That's my solution
Watch the police and the tax man miss

I'm mobile
Oooooh, yeah, hee!

The Who, Goin' Mobile

Wed, 03/30/2011 - 10:24 | 1116753 SheepDog-One
SheepDog-One's picture

No Ive refused to pay property taxes for years! 

Wed, 03/30/2011 - 11:13 | 1116985 pazmaker
pazmaker's picture

so you have a tax lien on your property?

Wed, 03/30/2011 - 10:00 | 1116650 FEDbuster
FEDbuster's picture

Everyone is always a "renter", as long as there are property taxes. 

Our property values have fallen by 50% here in AZ.  The assesor has dropped values by 30-40% in most cases, but the rate at which you are taxed at has risen.  All the parasites set their own rates in order to make sure their tax revenue stays the same or rises each year.  As property owners, you are a sitting duck for the parasites. 

It is a rigged game.  Values go up, taxes go up.  Values go down, taxes go up.

Wed, 03/30/2011 - 10:46 | 1116862 Jay Gould Esq.
Jay Gould Esq.'s picture

Operative word: parasites.


Wed, 03/30/2011 - 11:58 | 1117282 CH1
CH1's picture

Yes. And as long as silly people worship and obey, they keep feeding.

Wed, 03/30/2011 - 12:27 | 1117448 LawsofPhysics
LawsofPhysics's picture

No shit everyone is a "renter" on the planet. Nature makes no promises regarding your survival so, no shit, you have to "pay rent" simply to exist.  What kind of dumb-ass logic is that?

The key is an occasional purge of the parasites so that the productive ones can get back to work.

Wed, 03/30/2011 - 09:43 | 1116580 LawsofPhysics
LawsofPhysics's picture

Second amendment bitches.  I agree, apparently I missed the first taxpayer rebellion.  Should I stop paying my taxes now?  Should my business stop paying it's taxes too?  I am ready, someone organize this and say the word.  I am ready to pull my trigger.  Sounds like a job for ZH.

Wed, 03/30/2011 - 10:27 | 1116768 HoofHearted
HoofHearted's picture

What we need is one "V" out there. We all need to be made free from our overlords, but too many of us don't realize that we are serfs.

Wed, 03/30/2011 - 17:55 | 1119074 buzzard
buzzard's picture

As I recall the first tax rebellion was when Jefferson was president, or was it Washington? The "Whiskey Rebellion". We didn't even make it into the 19th cent. Man oh man...

Wed, 03/30/2011 - 09:43 | 1116581 bania
bania's picture

a ratchet works in a very similar manner

Wed, 03/30/2011 - 09:42 | 1116588 SheepDog-One
SheepDog-One's picture

'Rebellion' in THIS country only if and when food stamps and cable TV are cut off.

Wed, 03/30/2011 - 09:44 | 1116597 LawsofPhysics
LawsofPhysics's picture

Funny, if it wasn't so true.

Wed, 03/30/2011 - 09:53 | 1116624 yabyum
yabyum's picture

Sheep dog, I disagree to a point, the meetings  they have for raising property taxes are getting more vocal all the time. Property is, and will be one of the last revenue streams they have.

Wed, 03/30/2011 - 09:55 | 1116634 Alcoholic Nativ...
Alcoholic Native American's picture

Amen brother

  ****goes back to watching TV and eating food he bought with food stamps****

Wed, 03/30/2011 - 09:50 | 1116617 TradingJoe
TradingJoe's picture

The "cash-rich" are buying up properties left and right, which tells me that printing won't stop until either the system re-sets itself or "they" got it all! Total economic slavery seems to be the goal! No one knows when it all collapses but it eventually will, we all tend to believe The Benster does not know or have a clue, I actually believe he KNOWS IT ALL but does not care, total economic annihilation is the goal, the only "unknown" in this equation is the "american taxpayer" who seems to have nicked in while watching some dumb tv show, honestly I don't what to be here when this "guy" finally wakes up! Whenever that might be!

Wed, 03/30/2011 - 09:49 | 1116618 Lucius Corneliu...
Lucius Cornelius Sulla's picture

County assessments around where I live were way below bubble valuations in 2006.  Prices came down to meet them at about where they are now, though prices are now falling below County assessments.  So, for State and Local governments, I think the pain is about to be felt.

Wed, 03/30/2011 - 10:05 | 1116674 FEDbuster
FEDbuster's picture

They feel no pain.  They raise the tax rate to offset the lower values.  If you "own" real estate you are screwed. 

If you rent, at least there is some competition in rents depending on local vacancy rates.  You always have the option to move or down size when your lease is up.

Wed, 03/30/2011 - 09:54 | 1116635 Sparrowhawk
Sparrowhawk's picture

Property taxes are generally used to fund education.  In our state, a bill is in the legislature to allow the school board to determine/raise property taxes.  Absolutely unbelievable!

Wed, 03/30/2011 - 09:59 | 1116644 GOSPLAN HERO
GOSPLAN HERO's picture

By the by, is that the Soviet Republic of Massachusetts?

Wed, 03/30/2011 - 10:10 | 1116699 docj
docj's picture

Probably not - most property taxes in Massachusetts are determined after the budget, and that's done in most MA towns during Town Meeting.  So the school board cannot directly set property tax rates.

But the principle is the same.  The teachers' contract in my town is up and they're looking for a 9.3% increase over the next 3-years (that's 3%, 3%, 3%) on top of automatic step/lane increases that bake-in about 2.5% growth into every year's expenditures even if there are "no raises".  Year-after-year the union packs Town Meeting to the rafters and don't for an instant think they don't keep very close tabs on who dares speak against their God-given right to increase their own salaries at 3-4 times the rate of their private sector counterparts.

Good economy, bad economy, no economy - none of that matter to them.  After all, they all have houses down the Cape that need to be kept-up, you know.  (Well, not all - just most.)

Wed, 03/30/2011 - 10:28 | 1116778 Obnoxio
Obnoxio's picture

I believe in MA that Proposition 2 1/2 limited yearly property tax hikes to 2.5% per year. Increases over 2.5% need the voters in a town to approve an over-ride. Not sure if this has changed. Property tax rates aren't that high in MA but home values are high so the bill can be high too.

Wed, 03/30/2011 - 10:45 | 1116850 docj
docj's picture

That is correct - Prop 2-1/2 is still, for now, the law of the Commonwealth.  Don't know for how much longer, though.

So what happens is that the total municipal budget can only increase by 2.5% plus any projected new growth in taxable property (new houses, office parks, etc.).  The overall tax bill can therefore go up well over 2.5% even if the voters don't approve an override.

Wed, 03/30/2011 - 10:50 | 1116869 Jay Gould Esq.
Jay Gould Esq.'s picture

Indeed, I am still waiting for that tax relief promised by Coupe Deval from Election Cycle '06.

Wed, 03/30/2011 - 11:04 | 1116949 Bicycle Repairman
Bicycle Repairman's picture

Income tax relief was voted in thru the referendum process and the state government simply ignored the vote.

Wed, 03/30/2011 - 10:32 | 1116797 Sparrowhawk
Sparrowhawk's picture

No, it's the tax-the-shit-out-of-you state of Maryland.


Wed, 03/30/2011 - 10:02 | 1116662 Flakmeister
Flakmeister's picture

Thing will be interesting in September if gas is $5.25 and there is no NFL....

Wed, 03/30/2011 - 10:15 | 1116718 I am Jobe
I am Jobe's picture

Gas at 6.00 and NFL will sell tickets, no matter what. Americans will nto forgo the crap and will whine a lot more.

Wed, 03/30/2011 - 10:26 | 1116759 SheepDog-One
SheepDog-One's picture

The real story of the NFL troubles are their declining attendance. Theyre seeing the avg Joe is no longer forking out $100 for nosebleed seats. 

Wed, 03/30/2011 - 11:02 | 1116937 Flakmeister
Flakmeister's picture

They'll still sell tickets when gas is $6, the question is  how will the sheeple handle no NFL. Remember it is panem et circenses,  it will be interesting if there are no circenses...nothing like running out of distractions while things descend into the shitter....

Wed, 03/30/2011 - 12:28 | 1117471 LawsofPhysics
LawsofPhysics's picture

Hhmmm, should we start building our own colosseums now?  Where can I buy shares?

Wed, 03/30/2011 - 10:02 | 1116667 Lone Mad Minute...
Lone Mad Minute Medic's picture

Sell your house and get into a section 8 house. Let the taxpayer schmuks pay your rent.

Wed, 03/30/2011 - 10:11 | 1116702 Mercury
Mercury's picture

That's where the incentives lie brother.  Get rich or get on the gravy train because the middle class is a wallking dinosaur. 

Wed, 03/30/2011 - 10:03 | 1116669 Mercury
Mercury's picture


Property taxes rarely get discussed in the context of the residential RE market but this article is spot on.  In almost all municipalities property taxes are about feeding the ever-growing Leviathan.  That's it.  Property taxes are fast becoming a bigger factor than interest rates in determining real estate values.  They are a perpetual expense that never decrease and have few barriers to increase plus they can't be hedged.

Wed, 03/30/2011 - 10:05 | 1116672 pasttense
pasttense's picture

This guy is talking apples and oranges here; the problem being he doesn't realize there is a steadily increasing housing stock in this country (from the growth in population, declining household size). For housing values he uses the per house value, but for property taxes he uses the total housing stock.

Wed, 03/30/2011 - 10:17 | 1116728 Mercury
Mercury's picture

The bottom line is that property taxes on pretty much each and every individual property are going up yoy in a declining RE market.

Wed, 03/30/2011 - 10:05 | 1116673 TruthInSunshine
TruthInSunshine's picture

Property taxes are the last bastion of local government revenues, and they will fight with white knuckles to not give up that juicy revenue stream.

It's a scam, also. If you have no children, you pay as much on an equivalent property as your next door neighbor who has 5 kids.

If you send you kids to private schools, you pay as much.

If you live part time in the house, you pay more.

It's one of the biggest scams ever devised.

As the article points out, taxes rise consistently over time, even during periods of deep distress and a lowering of valuations during period of incredible distress.

Wed, 03/30/2011 - 10:06 | 1116689 johnnynaps
johnnynaps's picture

Unenjoyment is my tax revolt! My property tax was 2800 last year and i collected 25500 on unenjoyment!

Wed, 03/30/2011 - 10:37 | 1116811 CitizenPete
CitizenPete's picture

Good on you!  However, I will bet you that you will never get back what you paid into Soc.Sec. when you did work...  You have miles to go before you put one over on Uncle Sam.  You need to go for the full Monty. My neighvors BOTH filed for state disability and I beleive after 2 years they got it,  Beat that Bitch.  :)  It's the race to the bottom or the "most needy"... It's "Twentieth Century Motors" in fucking real life.

Wed, 03/30/2011 - 11:25 | 1117046 technovelist
technovelist's picture

Yes, that is where we are headed. I hope we never get there, but that's the plan "they" have for us.

Wed, 03/30/2011 - 10:10 | 1116690 Mr. Regression
Mr. Regression's picture

Well, well, well.....I wondered how long it would be until this issue was raised.

I'm retired.  Middle class, 7 figure net worth, absolutely no debt, I lived a prudent life.

In 2010 my property tax bills here in upstate NY have exceeded my total Federal and State Income tax paid for the first time in my life.

Not much longer here in NY, but not much better elsewhere I'm afraid.

BTW, we own just one home (no vacation home), about 2500 square feet.

Wed, 03/30/2011 - 10:12 | 1116716 TruthInSunshine
TruthInSunshine's picture

You'd be far better off retiring to many other states, assuming you have no 'can't leave NY' sentiment or attachment.

Propery taxes in South Carolina are about 80% lower than New York City, and the valuations on properties are also much lower.


Wed, 03/30/2011 - 10:19 | 1116735 pazmaker
pazmaker's picture

agreed...get out of Dodge!!!!(NY)

Wed, 03/30/2011 - 11:09 | 1116960 Bicycle Repairman
Bicycle Repairman's picture

The only way to deal with property taxes is to find a low tax area and move.

Wed, 03/30/2011 - 11:21 | 1117035 TruthInSunshine
TruthInSunshine's picture

Vote with your feet and move, bitchez!


- Ronald Wilson Reagan

Wed, 03/30/2011 - 13:28 | 1117796 Lednbrass
Lednbrass's picture

Nothing personal, but the quota of Yankee invaders is quite full here.  Go elsewhere, no more Northerners wanted and those who are already infesting the South have generated sufficient hatred.  Shame you spineless fools turned your home states into sewers, but thats no reason to spread your sickness to otherwise nice areas.

Wed, 03/30/2011 - 12:02 | 1117307 pods
pods's picture

Get out of there now!  I have heard of crazy prop taxes there.

We moved out in '01.  Have not regretted it.  

Place is slowly dying.  Don't be the last to turn the light out.

NC has a much better climate, and opportunities are incomparable.


Wed, 03/30/2011 - 10:10 | 1116705 MrBoompi
MrBoompi's picture

I'm not surprised property taxes haven't dropped along with housing values. This seems similar to how gasoline pricing works. As soon as the price of crude rises, the gasoline prices all rise immediately, but when the price of crude falls there is a significant lag time before a downward price adjustment. And even then, does the price drop all the way back down?

What would happen to our local budgets if property taxes were reduced? They're already strapped for cash. As far as I'm concerned, we should continue to keep the property taxes as high as possible because the owners of real estate are most likely able to afford the taxes vs. renters or other folks with less money.

Until we see some gains in employment and an increase in other tax revenues, I'm not sure we can afford cuts in property taxes.

Wed, 03/30/2011 - 11:36 | 1117113 Boxed Merlot
Boxed Merlot's picture

keep the property taxes as high as possible because the owners of real estate are most likely able to afford the taxes vs. renters...

Please tell me you don't really beleve this. Do you honestly think the renter's rent is not affected by taxes? Who's the owner / landlord that will pay their rental's property taxes out of their own pocket and remain solvent? C'mon people, it's arguments like these and a basic ignorance of business / profit that amazes and amuses.

That "somebody else" that pays the tab is YOU!

Wed, 03/30/2011 - 10:10 | 1116706 captain sunshine
captain sunshine's picture

"property owners are the perfect tax donkeys"... Even an ass will speak after you strike it a few times.

Wed, 03/30/2011 - 10:13 | 1116710 oldmanofthesee
oldmanofthesee's picture

BINGO, geezer!

Wed, 03/30/2011 - 10:12 | 1116715 I am Jobe
I am Jobe's picture

Nah, so far nothing has happned in the USA. Sheeples led to the slaughter house. More over the Govt is buidling its tropps to shoot US Citizens. Police State, and they will shoot a US Citizen. They will not protect you period. They ave not so far from the banksters.

Wed, 03/30/2011 - 10:15 | 1116726 chumbawamba
chumbawamba's picture

This guy makes less sense everytime he puts out an article.  His assertions don't match his graphs, and he apparently doesn't know how to keep a single train of thought.

What is this shit?

Wed, 03/30/2011 - 10:18 | 1116740 spartan117
spartan117's picture

Are you the real chumbawumba?

Wed, 03/30/2011 - 11:17 | 1117005 chumbawamba
chumbawamba's picture

There never was a real Chumbawamba.

Wed, 03/30/2011 - 10:28 | 1116770 ggummm
ggummm's picture

yeah... plus he was one of the first to rush report on Rossi "new energy" E-Cat... oh... wait! that turned out true... :(

Wed, 03/30/2011 - 11:19 | 1117015 chumbawamba
chumbawamba's picture

Really?  What does that have to do with his disjointed and contradictory screeds?  I've reported many things that other people didn't know about that turned out to be true.  Can I be your hero, too?

Wed, 03/30/2011 - 10:22 | 1116756 I Am The Unknow...
I Am The Unknown Comic's picture

There will be no rebellion here.  We will get nothing and like it!

Wed, 03/30/2011 - 10:29 | 1116769 SheepDog-One
SheepDog-One's picture

There will be no mass rebellion. Americans for 30 years have been trained to 'never hit back' by the nurse Ratchets in the public schools. Most all will go on the bus willingly, the rest will be involved in some type of civil war until theyre done away with.

Wed, 03/30/2011 - 10:38 | 1116812 I Am The Unknow...
I Am The Unknown Comic's picture

yeah that pretty much sums it up, unfortunately...

Wed, 03/30/2011 - 10:26 | 1116772 eureka
eureka's picture

"...promised to various fiefdoms and constituencies at the apex of various bubbles, and what is sustainable in non-bubble times."


Some U.S. individuals are finally learning to behave

like U.S. corprations behave - as it dawns on them

that many small "fiefdoms" make one big empire,

which exists, not to create, but only extract, wealth,

from where ever possible.

And such is the innate nature, of not just empire,

but of a morally corrupt culture and nation:

Continued Decline Untill Dissolution.

Wed, 03/30/2011 - 10:44 | 1116777 CitizenPete
CitizenPete's picture

Expect all fees to go up 20-30% minimum.  If you have a well and septic expect new rules and regulations that will include a recurring fee or tax.  If you have city water and sewer then expect a huge increase. Expect surcharges or additional fees on any wire, cable, pipe, road, that enters or skirts your property.  If your a renter then God bless your foresight, now you have to figure out how to lock in or negotiate your rent down (unless you have some sort of control).  

If you have a mortgage at least you get to fix the roof, plumb the pipes, wire the electrical, replace the bulbs, mow the lawn, paint, clean, mulch, etc... as your property taxes go up and the value goes down.</sarc>

I am lucky enough that the Township I live in just built a new park with baseball fields that need to be maintained constantly at my cost.  That's were I am putting up my fucking tent - right field -- and they have Porta Pottys.

What are the dock fees and "taxes" and registration for a house boat?

I just acquired a WASR-10/63 from a "sporting goods store" and the DOJ "yellow sheet" includes the question: "Have you ever denounced your US citizenship?".  

Hmmm, of course not: I'm paying 7% tax to buy this AK-47 aren't I?  Beacuse Paying your taxes PROVES your "a Proud American",  doesn't it?


Here we are now:

Wed, 03/30/2011 - 13:05 | 1117648 pazmaker
pazmaker's picture

So some how you think that all these fees and taxes you list will benevolently be asorb by landlords for the renters...... a bit naive don't you think.   If I'm a landlord and I have to pay increases and surcharges it will be passed on to the renters.  Santa Claus is dead and LandLords are not usually altruistic.

Wed, 03/30/2011 - 10:32 | 1116790 Zina
Zina's picture

Debt ceiling, debt ceiling... The time bomb is ticking...

Senators saying they won't vote to raise the debt ceiling:

(Marco Rubio, R-Florida)

(Jerry Moran, R-Kansas)


There is a thing called "political risk". Political risks can trigger much worse "black swans" than natural disasters and nuclear leaks...

The last time the debt ceiling was raised was in February 12, 2010. At that time, the US Congress was Democrat-dominated.

Now, the Congress is Republican-dominated.

The GDP of the US was 14.6 trillion dollars in 2010. The debt ceiling is 14,29 trillion.

Any raising of the debt ceiling will probably mean a ceiling above 100% of the GDP.

Will a Republican-dominated Congress be responsible for a debt ceiling above 100% of US GDP?

Wed, 03/30/2011 - 10:35 | 1116807 TruthInSunshine
TruthInSunshine's picture

It's all theater. Trust us (as in, realists).

Boehner has already admitted he won't budge on the budget until Tea Party activists are out of town (they're there in D.C. over the weekend to pressure freshmen Republicans) because it would be too difficult.

So, they will fold after the activitists leave town, on Sunday/Monday.

Wait, watch and see.

Wed, 03/30/2011 - 11:08 | 1116965 Zina
Zina's picture

Oh, I can't wait to see a Republican-dominated Congress be responsible for establishing a debt ceiling above 100% of GDP...

Goodbye re-election to all the Republican congressmen who vote to raise the ceiling...

Wed, 03/30/2011 - 11:32 | 1117095 Jay Gould Esq.
Jay Gould Esq.'s picture

If the Tea Party faithful do not leave on schedule, will Bawling John cry ? 

Boehner can turn on the waterworks with less provocation than Richard Simmons.

Wed, 03/30/2011 - 10:35 | 1116804 jemlyn
jemlyn's picture

Does anyone know if the banks pay property tax on all their re-possessed homes?

Wed, 03/30/2011 - 10:38 | 1116813 TruthInSunshine
TruthInSunshine's picture

Depends on the area.

In many counties, cities, townships, they do not, because they have a pre-arranged deal worked out with the Treasurer.

Wed, 03/30/2011 - 11:44 | 1117154 MachoMan
MachoMan's picture

Whoa.  How exactly do banks have agreements with local governments to be exempt from taxation?  I'm not saying you're full of shit, but this is the first I've heard of it...  if true, I will do some digging around here and seek to immediately nullify their ability to do so as I can't fathom that's within their legal rights without voter input.

My understanding is that banks have been keeping local debtors in possession of the homes and failing to foreclose due to the economic impracticality/macro impact on housing prices...  as a result, the debtors have not been paying property taxes and the commissioner of state lands is about to have a typhoon of lands certified to the state for tax sale...  once this process finally comes to fruition, the banks then pony up the cash in backed taxes if they want to get the property sold...  otherwise, they risk losing the property to a BFP at tax sale (recent case).

If it is found that homes actually owned by banks have been exempt from taxation or have been offered an alternative to payment from the typical taxpayer, then the city/county is going to have some pretty big problems on its hands.  Do you have any links or news articles reflecting your allegations?

Wed, 03/30/2011 - 12:15 | 1117381 TruthInSunshine
TruthInSunshine's picture

That's not exactly what I'm saying, MM.

Call your county treasurer's office and ask them which cities, townships, villages etc. are getting foreclosures from banks that are turning the properties over, and which ones aren't.

The county treasurer has a list of those cities, townships and villages that have pre-agreed to take back homes that the banks have elected NOT to pay property taxes on, even though the home may be foreclosed upon, either because it was abandoned or through the judicial process.

In the cases where the bank has stopped paying taxes, they agree to basically deed the property to municipalities on those lists, in lieu of paying back property taxes.

I know for a fact that this is the case, because these are the homes that the county treasurer offices are starting to directly auction off.

Wed, 03/30/2011 - 13:56 | 1117969 MachoMan
MachoMan's picture

Ahhh.  Much different scenario and perfectly acceptable.  Sad, but the economic reality.  Luckily, our local market is too good for this sort of thing to happen yet...  we really haven't had our comeuppance yet...  definitely a little light, but anything sub $175k is still moving pretty decently and that will get you a newer construction 2000+ sq ft. 3+/2+ all day.

What I don't understand is how the foreclosure process costs so much...  I guess I could see on houses that are ~$50k and whatnot...  but, even then, taxes in our area on something like that would be ~$400/year tops...  most foreclosure defendants end up defaulting anyway...  I'd guess $3k-10k on attorneys fees...  and ~$500 in costs, including filing and selling costs...  You gotta work pretty hard at it to not provide net profit...  at least around here.  I guess if houses are going for $20 in detroit, the analysis looks a little different...

If/when this becomes prevalent in my locale, I'll take it as the "get out the popcorn" signal.

Wed, 03/30/2011 - 10:35 | 1116805 Bastiat
Bastiat's picture

One of the reasons for the California budget gap is the Constitutional amendment limiting real estate taxes.  The chart is a good illustration of WHY the other states are raising real estate taxes -- ie. what happens when you don't, in this environment.  In the meantime Jerry Brown gave up on negotiations last over the budget last night.  The Republicans are holding out for pension consessions before they will allow the extension of certain expiring taxes.  The unions, dominated by schools and SEIU have dug in their heels on this.  Should be interesting.

Wed, 03/30/2011 - 10:37 | 1116808 Arch Duke Ferdinand
Arch Duke Ferdinand's picture

The Single Best Way to Kill a Corrupt US Congress.....Starve the Government...

Wed, 03/30/2011 - 10:44 | 1116809 Obnoxio
Obnoxio's picture

Over the long run total real estate costs including taxes won't be able to rise faster than real incomes. That is why real estate may not rise in real terms for a hundred years despite all the government subsidies to the bankers. If the bankers own all the real estate and the workers become serfs then a revolution will be overdue.

Wed, 03/30/2011 - 10:48 | 1116826 Seasmoke
Seasmoke's picture

IT SURE AS HELL SHOULD !!......and not only higher property taxes but LESS services.......its mostly all going to salaries and benefits (health and pensions).......THE MOST REGRESSIVE TAX IN THE WORLD AND ITS UNSUSTAINABLE !

Wed, 03/30/2011 - 10:43 | 1116833 baby_BLYTHE
baby_BLYTHE's picture

Granny is screaming for a % yield!

The FED needs to stop playing tug-of-war along the short end

Wed, 03/30/2011 - 10:49 | 1116870 Bicycle Repairman
Bicycle Repairman's picture

"The ultimate tax hostage is the property owner."

Correct.  Wonder how folks like their McMansions and vacation homes now?

Wed, 03/30/2011 - 10:55 | 1116891 SwingForce
Wed, 03/30/2011 - 11:08 | 1116952 ragedmaximus
ragedmaximus's picture

DON'T FRET ....  USA GOVT. only cares about PROTESTERS in OTHER COUNTRIES !!!!!!

Wed, 03/30/2011 - 11:12 | 1116989 TBT or not TBT
TBT or not TBT's picture

In Wisconsin and recently in London, the protesters were the government, dude.

Wed, 03/30/2011 - 11:27 | 1117071 Geoff-UK
Geoff-UK's picture

Someone please take away Charles Hugh Smith posting privileges.  His hyper-optimistic bullshit about a tax rebellion can be consumed AT HIS OWN FUCKING WEBPAGE. 

Wed, 03/30/2011 - 11:47 | 1117191 cpgone
cpgone's picture

Nah ,the American sheeple are too lazy.

Cut off the food stamps and American idol/dancing with the stars

crap and then something may happen.

Wed, 03/30/2011 - 11:56 | 1117268 ragedmaximus
ragedmaximus's picture

 " Gee Wally ,if our house is worth less then why are our property taxes rising ????"

Wed, 03/30/2011 - 12:02 | 1117306 Jerry Maguire
Jerry Maguire's picture

I noticed this relentless progression of property taxes years ago, when interest rates dropped low enough to bring us the real estate bubble:

One wonders when JQP is going to notice how he's being ravished and do something about it. 

Wed, 03/30/2011 - 12:14 | 1117389 anarkst
anarkst's picture

Housing in the U.S. is just another form of extortion.  After all, who doesn't get a piece of the action when it comes to putting a roof over your head?

Wed, 03/30/2011 - 12:30 | 1117485 velobabe
velobabe's picture

not sure if this applies in all 50 states, but you can file a protest to your property tax assessment. i had been doing this for a couple of decades. i guess i am cheap. nobody in my expensive to live and buy real estate town, did this much, until the bankstars moved in. hell even ken lewis had his attorney file a protest to his 9 million dollar McMansion p tax. americans are so lazy, they will never protest or complain about anything that is demanded of them from governance. i have been complaining my whole life, still get screwed every time i turn around, but at least i protest, willing to step out of line and speak my mind. not that i got any where with my hell raising, quite the opposite. but at least i know in my own mind i will fight shit.

Wed, 03/30/2011 - 12:36 | 1117512 Papaneuf
Papaneuf's picture

The Roma have it right. Gypsies don't pay property tax. Neither do full time Rv'ers, I believe.

Our local property taxes, in one of the highest taxed states in the U.S. went up 22.5 % in one shot last year!

All I can say is "Baaaaaaaaaaaaaaaaa"!

Wed, 03/30/2011 - 13:04 | 1117654 Watauga
Watauga's picture

"There is nothing new under the Sun."

Wed, 03/30/2011 - 13:08 | 1117675 Stephen
Stephen's picture

Why would you think there is a relationship between home prices and property taxes??

During the bubble phase, did a town's costs of running schools go up just because home prices doubled?



Wed, 03/30/2011 - 13:08 | 1117680 curbyourrisk
curbyourrisk's picture

Sign me the fuck up......  can we use real ammo this time?

Wed, 03/30/2011 - 13:13 | 1117708 PulauHantu29
PulauHantu29's picture

We still have 8 or 9 years of "correction."

This is not rocket science. RE runs in 10-12 year cycles and this past Up Cycle was an Uber one due to E-Z-Money.

Now we have 10-12 years of Downturn. It's the way RE always has worked since the caveman days and all the CBs can do os "soften" the plunge while they screw up the entire rest of the economy...and Ron Paul says in his excellent book, End the Fed.

What may make this plunge worse os the fact Australia and China are now on the verge of thier own massive Bubble Bursting party. Did you know the median house price in Australia is a Whopping $601,000 according to The Daily Reckoning?

USO, GLD, PALL and now with Billary's War, time to add HAL, KBR and FLR. Everything destroyed is gonna have to rebuilt by someone.

Wed, 03/30/2011 - 13:58 | 1117990 SilverFiend
SilverFiend's picture

How the hell else are we going to pay the bloated union salaries and cadillac health plan.  We sure don't want another Wisconsin.  Or do we?

Wed, 03/30/2011 - 14:31 | 1118153 crzyhun
crzyhun's picture

The housing crisis is very bad. Over at another blog, 1 in 3 have not paid their mortgage in 2 years with another 17% not paying for the last 23 month. This not even including the wave of alt resets... The blame is thick and it goes around the horn, from top to bottom and side to side. The state, local, and other public guarantees we are on the hook for, ie., those that are working at whatever job, is beyond any tax hike they can levy.

The best thing that can happen is not a rebellion, puerile thinking, rather getting down to business, admitting there is a huge problem, incentivizing productivity, and pulling in the belt where it makes the most impact. And do this right now.

Wed, 03/30/2011 - 15:02 | 1118310 MachoMan
MachoMan's picture

Our county outsources the determination of housing values and then the county assesses the value based on the results.  Well, the party doing the price guestimation charges seven figures to make a 3% increase across the board...  good work if you can get it right?  At any rate, this is pretty laughable given housing prices have most likely decreased by this amount...

So, what's the remedy?  Well, just call and complain (negotiate) and they'll drop the value...  yep, basically the treasurer's office knows its bullshit and so basically everyone that doesn't complain pays more taxes...  there isn't any formal necessity...  just call them up and tell them they're full of shit and you pay less tax...  nifty.

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