Government should tax fairly and conduct themselves honorably. Post 190

Brian Ellis Investing Letter       

NCLC Targets Individual Investors and School-Aged Children

July 11, 2012

Allow me to point out the latest way that your rights as an investor are being targeted by government generally and by liberal interests specifically.

The “National Consumer Law Center” (NCLC) – a group that trots out “research reports” claiming to be objective, but are …one-sided…policy papers funded by none other than ultra-liberal financier George Soros – has…yet another “research report” that…is a frontal attack on investors of all sizes …individual investors, too.

…called “The Other Foreclosure Crisis: Property Tax Lien Sales”… The premise is: Tax lien sales – in which county governments auction off liens against real estate for which the property taxes have not been paid – are baaaaaaaad and unfairly target unfortunate homeowners who have not paid their property taxes.

Why are these tax liens so baaaaaaad according to NCLC? It’s simple, really: Those greedy, selfish, awful … investors who buy these tax liens are making a … get ready for it… A PROFIT by investing in those tax liens. Sometimes, they even make big profits. And that makes these greedy, selfish, awful, greedy investors EVEN WORSE in the eyes of NCLC, and other liberals.

In this case, [NCLC[ claim[s] that the people who are being damaged are people who are incapable of managing their financial affairs such as those who suffer from Alzheimer’s, dementia or other cognitive disorders.

This is how groups like NCLC and their liberal brethren in the political world lie to us all: They make arguments that seem plausible, but are absolutely not rational. Rather than reason, they make intellectually vapid emotional appeals. (A primary example: “Hope and Change”.) If mental health issues are what NCLC is concerned about, they should spend their time raising money for research and providing for the needs of people with mental health issues… [Great point! editor’s note]

The tax lien system exists in its current form because local government must have a way to collect revenue to pay for, among other things, public education. Since not everybody is going to pay their tax bill on time, the tax lien system has developed into what it is right now: A system that motivates individuals to risk their own money in exchange for the opportunity to make a profit. There’s nothing bad about profit. In fact, profit is good. It’s what motivates people to put their money at risk, which creates opportunity for other people. [Another great point! editor’s note]

Clearly, NCLC does not care about the education of children since they are attacking the very system that assures that funding for that education is made available…Without reasonable motivation – in the form of PROFIT – nobody will be willing to step up and take the risk to buy tax liens, and thus provide funding for local governments when property taxes aren’t paid as expected.

…people who are delinquent on their property tax bills are given years to bring their debt s current. Furthermore, tax liens are strongly regulated such that they’re sold in open auctions that assure that the same rules are being applied to everyone.

…and shame on NCLC for trying to negatively change a system that is so critical to making sure children receive an education. NCLC should be ashamed.

See the entire article: NCLC targets individual investors and school age children


Coach Mitch’s REFLECTIONS™


This is a good subject.

I agree with much of Brian’s logic. However, I also know that the way the counties administer the tax lien/deed system is often not fair to property owners. I would opt to totally eliminate the property tax and replace it with a sales tax or some other scheme that is fairer.

I offer several examples of real world unfairness by government which I am sure that the NCLC did not address.

1 Counties are obligated to notify the delinquent tax payer of pending legal actions. The requirement is to send the notices to the last known address, which is often not the current address of the property owner, and therefore, the tax delinquent property owner never gets served. So that the property tax bill can be forwarded, when moving, it is the responsibility of the property owner to notify the taxing authorities of any new address; however I also think it reasonable to require government to actually find the owner of property prior to taking (stealing) his property. The county can easily hire a skip tracer to locate absent owners and charge the skip trace cost onto the amount owed. But, I contend, the county does not want to find the owner because the county wants the property. The county has a vested interest in taking and then selling the property in order to make a profit and fund its programs. The county is therefore, not an honest broker. In fact, the government is being dishonest.

2 When the county auctions off the deed for the back taxes, any amount over the taxes owed should be rightfully forwarded to the taxpayer. However, counties see these excess proceeds or overages as a windfall and make it difficult or impossible for the rightful owners to collect them. In some states, the county will first foreclose on the property, taking legal ownership and then auction the property, keeping all the profits because, upon a foreclosure, the county becomes the owner. One federal judge has called this practice “unseemly.” Where overages are escrowed, in almost all cases, the county makes no real effort to find and turn over the overages to the previous owner. The overages amounts to millions of dollars in unclaimed funds and the county should be required to locate the rightful owner and give them the overages – with interest.

3 When an owner falls behind in paying his property taxes, the county will often set up a repayment schedule, and this is good. However, not so good, the county requires that the oldest tax delinquent year be paid first, rather than credit payments to the most recent delinquency. This practice can easily still make a property qualify for tax foreclosure and be auctioned off, yet, deceptively, the county has rung out of someone every penny it can. It’s heartless.

4 In this country, the mantra is: “the punishment shall fit the crime,” please tell me how it is fair that someone loses their $125,000 home because they failed to pay several years taxes totaling $12000. This was a real world example. This sadness occurs many tens of thousands of times each year. The penalty for non-payment of property taxes is cruel and unusually unjust. However, government benefits, so the practice continues.

I invest in tax delinquent property.

Because of the stress on the homeowner, one can see how it can be very profitable to invest in properties that are tax delinquent. They are “The most motivated of all motivated sellers”™ However, I also see how the state is taking advantage of people for its own gain and feel called to right this wrong. Property taxes should be eliminated. I can make profits in other ways. I would rather see the state acting honorably.

Taking property for non-payment of taxes is overkill, akin to municipalities charging $150 for a parking ticket because the police department needs funding. Government should raise the taxes it needs in an honest way and not through hidden punishment. It’s not right. We deserve better.

G-d Bless US,

Mitchell Goldstein - Coach Mitch
518-439-6100 until midnight EST

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