No Property Taxes on Seniors: a Really Terrible Idea

 A Really Terrible Idea

 In the last couple of posts on this blog, I talked about the anti-tax movement that has caused the decay of our country and of our public services.  One particularly awful demand of the anti-tax movement is the demand to eliminate property taxes for old people like me. The demand takes two forms: one of them is a demand that people over 65 should pay no property taxes, and the other is that there should be no property taxes on a property if the mortgage on it is fully paid off.

Many Old People Can Afford to Pay the Taxes

These are terrible ideas for several reasons. First, many old people can well afford to pay the taxes. Some old people are poor and struggle to get by, and perhaps we should help them so that they can stay in their homes. We don't really need to kick poor people out onto the street. On the other hand, there is no reason to provide tax relief to wealthy old people who own large properties and they, of course, would be the main beneficiaries of these ideas.

Today’s old people own 51% of our country’s wealth. We have been the beneficiaries of a period of great economic growth.  Why should our good luck entitle us to special tax treatment? Moreover, we also consume public services just as younger people do. Why should our children and grandchildren - who have had less time to accumulate wealth than we have - carry the burden of paying for the services that we use?

Should People be Exempt From Taxes Because They are Rich?

The idea that that there should be no tax on a property when the mortgage on it has been paid off is even worse. Real estate property is a form of wealth; the more such property I own, the wealthier I am. What is usually called my "net worth" is equal to the value of what I own minus the debts that I owe. For example, if I own a house worth $500,000, but carry mortgage debt of $250,000, my net worth is $250,000. On the other hand, if I own the same house but carry no mortgage debt, my net worth is $500,000. In other words, the less I owe in mortgage debt, the higher my net worth is. Why should I be exempt from taxes just because I have a high net worth?

The Main Beneficiaries Would Be Rich People

If we ask ourselves who would be the main beneficiaries of the elimination of property taxes on old people or on properties with paid-off mortgages, the answer is obvious. The main beneficiaries would be wealthy old people who own large properties and have to pay big property tax bills. The image of a poor couple who have worked all their lives and now struggle to pay their property taxes is nothing but a screen to hide the real beneficiaries of these destructive policies. Rich people who are trying to avoid carrying their fair share of the tax burden are the people who are paying for the campaign to enact such policies. They do it because a reduction in property taxes would reduce their tax burden substantially. That is of course, the real reason for the whole campaign to eliminate property taxes on retired people. Rich people are paying for the campaign to reduce the taxes they pay. If it happens to reduce taxes for a few other people, the rich can live with that.

Working Americans Should Stick Together

Finally, we should note that the demand for these policies also has a destructive political effect. It divides working Americans among themselves. It encourages young and old people to fight against each other instead of fighting against the oligarchs who run our country and are gradually destroying it by choking off its revenue.  Let’s keep our minds clear and remember where our real interests lie!