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Property Tax and ConfiscationFrank Lechner
Dependent on the area of the country in which you reside, property taxes have risen dramatically. My personal property taxes rose 80% last year, in addition to investment properties rising a minimum of 12% and on up. Many of us are now paying property taxes greater on a monthly basis, than it used to cost for a whole year. These are incredible numbers to bear. This results in further confiscation of wealth by your favorite government, all for causes and justifications that are well beyond my comprehension. A while back, I laid out the reasoning that this was to come. If you remember in the very recent past, as the stock markets were pulling back significantly, state budgets all across the US were awash in red ink. They were so far upside down, that many bond rating agencies were falling all over themselves to decrease the bond rating on many states. This was serious trouble on the horizon. The socialistic monopoly that is modern government, was in dire need of an injection of cash. The ability to raise taxes, all but in the most minute ways, for instance cigarette taxes, was and is non-existent. There had to be another way, as we are talking of serious inputs needed. The Feds have cooperated mightily. The printing press has been running full bore, thus creating new bull markets in many items real, and an all out bubble in various locales in Real Estate. There is NO bubble nationwide, it is strictly limited to various markets. While some went to bubble status - Florida coastline, Boston, Las Vegas, and many areas of California to name a few - the overall real estate market has enjoyed typical considerable gains without achieving bubble status. This is the sopping up of excessive liquidity in action. My argument is that this has all been well contrived from the time of the Duck bubble bust. Capital gains receipts were down for taxing agencies, and was to be for some time, so another avenue of revenue enhancement would have to be found to supplant this mechanism. Here comes real estate, and the capability to raise taxes without raising taxes (so they say). We all understand how property is re-appraised by taxing authorities as values increase. We also understand that this new value, is still taxed at X mill rate. Crucial fact but true, the mill rate does not decrease! Thus, they are able to pull a 2% tax on $200,000 of value instead of the old value of let's say $100,000. (old tax value = $2000, and new = $4000). Your taxes have just risen by 100%, while they in fact claim that the taxes stayed the same, or your taxes never rose, as the mill rate was held steady. In addition, they claim that they cannot help it that the value of your abode rose. Or, they will ask you if you would choose to sell at the old value, instead of the new inflated value. Of course, your answer is no, and they then say that settles it, you have just agreed to be taxed on the new higher value. Now I don't know about you, but if I am out of pocket more fiat. THAT IS A TAX INCREASE! Should those arguments not work for those that tax, then they scream at the top of their collective lungs - IT'S FOR THE CHILDREN! (as many states use property tax revenue to feed the public school monster). When in fact, it is not, and never will be. The issue is not whether or not our kids are receiving proper schooling, it is not about whether or not our kids are receiving the books and computers needed in the education process. Those are trade-offs. A serious problem is unfunded mandates by both the Federal and State governments, it is excessive regulation, it is school boards believing swimming pools and track fields are more important than books. It is a false belief in smaller class size equals better education (within reason of course). It is our ineffectual class management, and of course our inability as adults to make decisions based on need instead of want. We have forgotten why our children go to school, and what they are to learn, all in the supposed interests of a 'well-rounded education...' read socialist programming. Until we understand the fiat monetary scheme, and all of its unintended consequences, we are doomed to an uncertain future at best. The bills continue to roll in, as government budgets continue to expand, and the capacity and capability to pay these bills declines over time. When was the last time you heard of a true or honest decrease in government spending? Not just a decrease in the projected expansion rate. Until we have the ability to stand up and say enough is enough, everything will continue on, business as usual, plunging headlong into a deflationary collapse in a very uncertain future. Don't get me wrong, inflation first, then the deflationary dessert is to be served later. As investors, in order to weather these ever-evolving storms, you need to understand the current situation, with a peek to the future. You need to understand that gold and silver are your one true store of wealth. Opportunities such as real estate, stocks, bonds, commodities, will come and go, with a great deal of wealth created and lost accordingly, yet all persons should have a store of wealth unseen to the system. This store of wealth is to be in physical gold and silver. Other investment mediums are of course fine, when properly utilized. To be prudent is wise, and a portion of your holdings in gold and silver is prudent. There is no feeling quite like holding 'real' gold and silver, not paper certificates or electronic entries, and all the while knowing full well that whatever the world throws at you, you are going to be A-OK. You can lose a job, interest rates can go to 15%, the states can institute a 'breath' tax on the oxygen you breathe, but you have a Plan B. A plan that is separate from them and their governance over your every move. A plan that sets you apart from the common Sheeple. You have a fall back position. In today's world, you NEED gold and silver physical, if only for peace of mind. Every day is the right day to accumulate gold and silver! April 9, 2005
321gold Inc |
