In my previous blog post I characterized the homestead property tax as being rogue. We all know that we need taxes to sustain our government, but it is very difficult to tolerate a rogue tax. The homestead property tax is based on a premiss that is impossible to sustain on its own. It is impossible to pay taxes on capital gains that one has not realized. To perpetuate the impossible property tax demand, the government assumes that all of us have other means of income to satisfy the impossible tax demand. Such an assumption, by the government, makes our homestead property taxes a form of extortion that can have extremely harsh consequences for the homeowner.
In Minnesota, are we all so desensitized that we can’t see that our homestead property tax is exclusively based on unrealized capital gains? I am convinced that there would be a massive protest if our income tax code would start taxing all of our unrealized capital gains. But why is it then that we can’t make the connection between property taxes and income taxes from the justice point of view?. After all, we pay all of our taxes from our incomes. Californians passed Proposition 13 that was a revolt/referendum against taxing unrealized capital gains for homestead property taxes.
Minnesota has the tax infrastructure and tools to make our homestead property taxes even more equitable than the California’s Proposition 13. I will comment on its details later, but for now, just click the MN Department of Revenue button above to see the resource for a just and equitable homestead property tax.
Our State Constitution, in its first article and section, states the following: Object of government. Government is instituted for the security, benefit and protection of the people, in whom all political power is inherent, together with the right to alter, modify or reform government whenever required by the public good.
Our present form of homestead property taxes that take our homes as hostages in exchange for a ransom are punitive and in complete opposition of providing security, benefit and protection, It is extremely hard to accept the fact that the same government that is supposed to protect us has promulgated tax laws that harm us.
How can MN tax infrastructure make our homestead property taxes more equitable than California's Proposition 13?
ReplyDeleteEven though Proposition 13 corrects the unfair taxation of unrealized capital gains, it creates a tax loophole that is not entirely fair to the government. In California a homeowner can have 100 fold increase in income and pay the same property taxes as long as the homeowner continues to live in the same house.
ReplyDeleteProposition 13 forgot to index their property taxes to peoples incomes. If they had done that, it would have been fair to taxpayers and the government.
Minnesota has the a tax infrastructure that can correct California's shortfall and create a completely fair homestead property tax that is equitable to the taxpayers and the government