Thoughts, essays, and writings on Liberty. Written by the heirs of Patrick Henry.

September 3, 2007

Taxachusetts: Why Property Taxes Are Going Up Again

by tarran

The defining characteristic of socialism is that it divorces production from consumption. In other words, in socialist systems consumers are permitted to consume goods without producing anything, and producers are forced to give up the the fruits of their productive labor to consumers without regard to how they (the producers) would like these fruits to be distributed or used.

Of course, since they do not have to limit their appetites to that which their production would support, consumers naturally increase the goods and services that they demand, requiring increasing levels of forcible distribution to support. When the amount of unwanted distribution crosses some threshold, a producer will be tempted to rebel, or at least not work very hard or very carefully. When this phenomenon becomes widespread enough, socialists systems begin to breakdown. Avoiding this trap is possible, and long-running voluntary socialist systems such as Hutterite colonies seem to have perfected a set of customs that do just that.

However, coercive systems take the easy way out and inevitably resort to coercion to attempt to close the gap between consumptive demands and production, especially in the case when production levels are in a decline. Producers are threatened with kidnapping, assault, or even murder if they do not produce more, or hand over the goods they must be ‘hoarding’.

While some socialists such as Lenin or Castro are unabashedly straightforward about their willingness to attack producers who are insufficiently enthusiastic, most socialists are uncomfortable with such naked aggression. They choose to cloak their violent impulses with euphemisms such as demanding that force people to “pay their fair share” or “give back to the community”. They also try to set up confiscatory systems that are mechanistic and impersonal. Governments, being socialist organizations that claim a monopoly on the use of violence in some region of territory, all adopt a system of “property taxes” where property owners are forced to pay the government for the privilege of occupying their land. The protection money extracted from these property owners is then spent on “services” which are consumed by other people. These services can vary from popular ones such as government operated schools to unpopular extravagances such as the marble floors in our new town hall.

To make the tax mechanistic, impersonal, and thus seemingly fair, the town governments typically peg the tax to some percentage of the property’s “fair market value”. The “fair market value”, of course, is determined by appraisers in the employ of the town government, who take their guidance from the prices of recent sales of similar properties nearby. The property owner has little choice in the matter: if he holds on to the property, he is not participating in setting the market price.

In the 1950’s, government officials began to reap an unexpected windfall from this system. It was wholly unexpected, and due entirely to the monetary inflation that had taken place in the decades since FDR had last devalued the U.S. dollar. This process which accelerated dramatically in the 1970’s when the Nixon administration devalued the U.S. dollar again, worked in the following way:

The newly created money by the U.S. central bank was funneled to politically well connected people or firms, working on projects of interest to the U.S. government. In addition, this money, when deposited into the banking system was used as the reserve justifying a large number of loans, increasingly directed by political incentives towards people looking to acquire homes. The end result was a steady increase in the amount of money available for home purchases, and a concomitant increase in sale prices for real estate. Of course, the appraisers took advantage of these price signals to raise the “fair market value” or properties, with the result that taxes increased dramatically.

This of course was a double whammy. The monetary inflation had not uniformly raised prices across the board. Prices are set by sellers who try to set the maximum price that will move all their stock. Some goods and services, particularly those in demand by politically connected firms who received the newly created money first, saw massive price increases, where as firms and people that were economically distant from the money creation had no reason to raise their prices. This latter group saw their incomes grow little, or not at all, while their cost of living increased dramatically. Then they were hit with a tax bill that demanded an increasing share of their dwindling purchasing power.

In the 1980’s, there was a backlash. Here in Massachusetts, a popular referendum limiting tax increases to 2.5% per annum easily passed. But a backdoor was in place: if government officials could convince half of those showing up to a voting booth on a certain day each year to vote for an “override”, the cap could be lifted. So the government officials used an old scheme. They transferred money from popular projects to unpopular ones. They built tony “senior centers” and “modernized town halls” with funds transferred from the road maintenance budgets and school budgets. Then they called for an override explaining that without it the potholes would not get fixed and high-school football would be cancelled. In some towns, people saw though this trick. In others, the referenda were passed by the minority who bothered to vote and voted in support of the increased taxes.

So once again in Massachusetts, we see people being squeezed. Unlike any other expense, they cannot control their taxes, which increase seemingly without limit.

Property tax bills rose an average of $161 in the past year. The average bill for a single family home hit more than $3,962 — an increase of about 4.2 percent compared to last year.

In 65 communities, taxes climbed at a rate of 7 percent or more, according to the state Department of Revenue.
Since 2000, property taxes have jumped nearly 50 percent. Over the past seven years, the average annual property tax hikes for homeowners have ranged from about $150 to nearly $215, The Boston Sunday Globe reported.

The increase has homeowners grumbling that they are being asked to pay higher taxes even as local services are being trimmed.

So long as we force people to pay for others’ consumption through taxes, we will see this phenomenon continue. The consumers will inevitably be able to use the threat of state violence such as evictions and arrests for tax-delinquency to ratchet up the amount of wealth that is forcibly transferred. Their demands will continually outstrip supply, resulting in perpetual “shortages” and crises. It’s a pity that in the U.S. we permit such vital services such as roads, schooling, water and sewage to be provided by a system which discourages thrift, efficiency, and high quality, while encouraging perpetual crises that set neighbors at each others’ throats.

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  • http://anarchangel.blogspot.com Chris

    Yet another treason… I mean reason (no seriously that literally just slipped out. I looked back up and it was there completely unintentionally…. though accurately) that I left my home state as soon as I could, and only moved back once, briefly, when I was forced to; leaving again as soon as possible.

    I live in a free state now. It may be damn hot here, but at least I have less coercive redistribution of my wealth and limitation of my liberty.

  • Chepe Noyon

    I agree that it is a pity that our political system has flaws, but I don’t see you offering any alternative. Are you proposing that we dispense with democracy?

  • http://dangerouslyidealistic.blogspot.com/ UCrawford

    Chepe,

    We’re not a democracy, we’re a constitutional republic. Or at least we’re supposed to be, according to our Constitution.

  • tarran

    Chepe

    – Yes. I am opposed to all forms of theft and extortion, including the existence of gangs that call themselves “Democratic Governments”

    UCrawford

    – Son, a republic is basically a democracy wearing a ball and chain and a lockpick. Eventually the chain comes off, and everything goes down the tubes. Is there any functional difference between the U.S. today and that which we would get with a democracy? I consider claims that we “live in a Republic” to be meaningless.

  • http://dangerouslyidealistic.blogspot.com/ UCrawford

    Tarran,

    You’re right, what we are practicing now is basically democracy. And I think that it’s wishful thinking and naive to believe that in any form of human government there won’t be moves towards tyranny. Unfortunately, I think that this is also true of anarcho-capitalism (or free market anarchy, if you prefer). In a constitutional republic, however, we have a tool (a Constitution) by which it’s possible to slow the growth of government and occasionally move it back.

  • Chepe Noyon

    OK, then, so am I correct to infer that you fellows prefer anarchy to any form of government?

  • tarran

    It would depend on who you mean by “you fellows”.

    As far as regular contributors to “The Liberty Papers” go, it would be incorrect; I am the only anarchist in this group.

  • Chepe Noyon

    Thanks, tarran. It would seem that you are the only person who has offered an alternative to the situation decried in the original post.

  • http://www.thelibertypapers.org/ Stephen Littau

    I agree with UCrawford’s assessment regarding republics vs. democracy. While republics are not perfect, they are superior to democracies. No matter what form of government one chooses, the ultimate end is tyranny (it’s just that some forms of government slow the path to tyranny more than others). So why not go to anarchy as my friend tarran suggests? While in theory anarchy seems like a great liberating alternative, it’s quite the opposite. The only thing that could lead to tyranny faster than democracy would be anarchy. In anarchy, the people with the most guns take control, thereby ending the anarchy. I do not know of any prosperous and free anarchy anywhere in the past or the present. If such a society does exist or has existed in the past, I would love to study it and reconsider my position.

    Government is a necessary evil but it is necessary. Ideally, a government exists to protect the individual’s rights of life, liberty, and property. I think John Locke’s philosophy on government is mostly right.

  • http://dangerouslyidealistic.blogspot.com/ UCrawford

    I can cite at least one recent example of a society in which anarchy led to tyranny…pre-Taliban Afghanistan. The lack of all meaningful government following the collapse of Najibullah’s regime allowed the Pakistan-sponsored Taliban to enter and subdue 90% of the country within five years…ironically, one of the most successful conquests of Afghanistan in the long and brutal history of that country.

    Anarchy only works if all parties choose to forego violence in their interactions. Otherwise someone always tries to seize power by violent or coercive means. And if humans have demonstrated anything in their history, it’s that they have never been able to successfully remove violence from the equation.

  • http://www.no-treason.com Joshua Holmes

    The defining characteristic of socialism is that it divorces production from consumption.

    No, that would be the defining characteristic of state ownership. State ownership is not the defining characteristic of socialism, however.

  • Brad R

    Joshua,

    You might be correct there as far as philosophy is concerned, but the catch about socialism is, as great as it sounds *on paper*, in order to make it work in the real world, it’s necessary to have absolute state control. So depending on how you want to look at it, state ownership could be argued as the defining characteristic of socialism.

  • http://www.no-treason.com Joshua Holmes

    You might be correct there as far as philosophy is concerned, but the catch about socialism is, as great as it sounds *on paper*, in order to make it work in the real world, it’s necessary to have absolute state control.

    Only if you’re looking for a dictatorship of the proletariat, which libertarian socialists do not. Check out Emma Goldman’s My Disillusionment in Russia. Or the argument between libertarian socialist Pierre-Joseph Proudhon and state socialist Karl Marx. Or read up on the anarchist-statist split at the First International.

    Fun fact: Lysander Spooner, the author of No Treason: The Constitution of No Authority, called himself a socialist.

  • Artfldgr

    Only if you’re looking for a dictatorship of the proletariat, which libertarian socialists do not. Check out Emma Goldman’s My Disillusionment in Russia. Or the argument between libertarian socialist Pierre-Joseph Proudhon and state socialist Karl Marx. Or read up on the anarchist-statist split at the First International.

    Fun fact: Lysander Spooner, the author of No Treason: The Constitution of No Authority, called himself a socialist.

    here is a kick for you…

    lenin, stalin, et al… call themselves socialists.. not communists. communism is a state that has yet to exist, and requires a complete socialist world.

    the problem is that you cant resolve the problems. socialism is antithesis to freedom. and communists understand hegel and application than westerners do.

    the students in chavez state thing as you do joshua, and in case you actually havent read chavez stuff… he is one of those new socialists too.

    there are a few reaasons why it eventually degrades to a dictatorial state.

    the first is that in order to build it, the sociliast side has to be constructed around a set of people who will implement a political system against the majority peoples will. in other words, they have to be willing to not listen to the people, cause the people wouldnt choose what they have to offer. so, ergo, ipso facto… dictatorship is enevitable because once in power that particular nature does not dry up and go away, it rises to full flower in dictating what they think is the right course of actoin. any pain the public feels is considered whining to maintain the status quo, and preventing the work from getting done.

    another reason is that in order to take property away from people who work hard to obtain it (marxist fantasies of “fat cats” and such not being that true – in fact fascists, which are socialists do this much more, as socialist and fascists can not be productive – and fascism is leftist, though to the right of communism. democratic socialism is fascist light)

    A state empowered to do anything for you, is also empowered to do anything to you.

    this is an old fellow traveler argument given to the useful idiots… that they are not going to build the same thign. that somehow, their socialism will not be punitive, etc. that its a new breed, etc… that acorns will grow up to be kangaroos.

    however, those same people are not selling socialism on its real points… they NEVER do… since its purpose is to trade the leaders in meritocracy, to the despotic leaders and sociopathic control freaks.

    [historically speaking the anarchists have always been the dupes of the revolutoinary and transformational socialists]

    anyway… what you and most others dont get is that your personal versions and your concepts taken from people like spooner mean nothing.

    to communists, your movement and siding count for everything. through the process of dialoguing to consensus, your giving an inch to socialism, is as good as moving all the way to dictatorships of one sort of another.

    they dont need you to sign on for the whole program, they only need a group to sign on for each piece. so the first peice they sell the first 200 vote for… but the second piece they sell, the 200 are disillusioned, and another 200 vote for… and so on and so on.

    it matters not what these papers say or they promise… a person who reads lysander should realize this even more…

    but their light didnt come on. that the ideas in the constitution arent a contract, and are fluff, is just as valid an argument about the socialists and any other ism that is used to vault a group into power over a meritocritous group (by definition they cant beat them through merit, but need trickery)

    so if the constitution is fluff, and you believe that, then how can you also not notice the dissonance as you try to state your ideas are not fluff? think about it…

    anarchists dont seem to good at thinking… they tend to organize… but they shouldnt… they tend to do things totally against the ideology that they profess… (under the excuse that they have to till they get world anarchism.. which is akin to the excuse of the socialists that say they have to till there is also peace, defined as world socialism… two sides of the same coin)

    and using emma goldman you miss the crucial point in the whole story as you look at one leaf.

    she helped create the soviet union a socialist monster… her tract, points out that she discovered its real nature. however, you and other anarchists never get the point that by the time she wrote that… it was too late. she had already been a profoundly useful idiot. and still is!

    it was too late…

    none of her letters, writings, reversals, etc… meant anyting… her usefulness being over and her inability to actually do anything is why she found out she was a dupe… but her being duped didnt allow her to say… no no… give me a do over…

    and because of people like her realizing AFTER the glass was broken what it meant…

    more than 100 million people have been basically tortured to death by their own kind..

    eventually, it gets more punitive… if you compare america from the 1960s… when heavy socialism started in a ‘revolution’ and the slow march through the institutions was seen…

    to today… we are more dictatorial…

    and more and more dictatorial… because as you take more and more from people, you need more and more force to make sure they comply…

    and as far as helping poor… well we dont have a constitutional aportioned tax.. which woudl accomplish much of what socialist wealth redistribution would… but wouldnt have the huge infrastructure and state power base. (take 10% from everyone, rich, poor, etc.. divide what you get by the number of people in the country, and give it back. do the math, the middle stays the middle, the poor get a lot, and the wealthy get less… but ther ewould be no power base from that! so its about power NOT about social benifit)

    i could go on, but i wont. as leftists dont have large attention spans and tend to abuse the length of an argumetn as a menas of validity…

    the sad part is that despite millions who can tell such people that this doesnt work, and such… people like josua will have to try on a wool coat everyone says feels like silk… and when he tries to remvoe the itchy thing, find out that he is permently sewn into it.

    each state that takes this path finds the same end result… some walk the road fast… revolution is the outcome… some walk the path slow… and they vote them in.. like chavez AND hitler… both socialists..

    either way… the people find out the truth when its too late because they dont want to accept the truth without it jammed down their throat while contemplating their situation in some state machine that grinds them up.

    when america falls… there will be no place to run.. and a heel pressing the face to the floor will be the final state of all mankind.

    and they intend to seal it by genetic manipulation through selection.. the elite will breed better… and the poor will be subjected to laws (like we hasve today and like they first crated in 1917), that will confound their aiblity to be with and find good partners… and the eloi and such will be born…

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