Tax delinquencies trending dramatically higher. Post 47

Charlotte County, FL 08/18/07

Number of delinquent tax warrants spikes

Officials cite economic downturn for unpaid taxes

The Charlotte County Tax Collector was set to file for warrants Friday to seize personal property, if necessary, to collect $1 million in unpaid tangible property taxes from 1,204 people who failed to pay their 2006 taxes, according to a copy of the warrants list obtained by the Sun Friday.

The number of tangible tax-delinquent accounts on the warrants list represents a 71% increase over the number of warrants issued last year, said Vickie Potts, Charlotte County tax collector.

The tangible tax is a levy on the value of the equipment and furnishings of businesses and rental properties and mobile home attachments, such as carports.

Several other county and business leaders attributed the spike in delinquencies to a downturn in the local economy, which followed a couple of high-growth years in the wake of Hurricane Charley.

“I think it’s just the economy,” Potts said.

The tangible tax is one of three tax rolls that counties in Florida use to raise revenues. The others are the real estate property tax and railroad property tax rolls.

Voters in a referendum in January 2008 will get to decide whether to approve a $25,000 exemption on the tangible property tax.

Delinquent tangible taxes

Here’s a look at the number of delinquent tangible personal tax warrants sought in Charlotte County:

* 2003: 513 warrants.

* 2004: 885 warrants.

* 2005: 706 warrants.

* 2006: 1,204 warrants.

See full article:http://www.sun-herald.com/Newsstory.cfm?pubdate=081807&story=tp2ch7.htm&folder=NewsArchive2

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Coach Mitch’s REFLECTIONS

What goes up, must come down.

When tax delinquencies rise – people’s fortunes demise. (I feel like I’m in a fortune cookie.)

As we are starting to see, the real estate bubble is fast becoming prominent. Look at the fallout, with foreclosure rates already over 70% higher than last year’s record breaking numbers.

Just the other day, we saw the failure of two large hedge funds from Goldman Sachs, who had invested in mortgage securities. The capital markets responded quickly by drying up and fears about the liquidity of the mortgage market resounded. The Federal Reserve felt called upon to flood the financial market with cash so that this failure would not dry up capital investment in the USA.

It is an oddity that, as a result, the investors in the hedge fund, who had been told that their investment was lost, may now get their investment back. The rich stay rich! These big investors will still feel comfortable to invest in mortgage securities, knowing that the Fed will bail them out.  But who bails out the Fed – we do.

However, as a result of continued market liquidity, the middle and lower economic classes will still have access to traditional mortgage financing, at rates which are still historically cheap. Real estate investors also have alternate choices to hard money.

So, in the end, the calculation is OK. Our tax money goes to something worthwhile.

The rich stay rich. Their money is guaranteed. The great unwashed have continued access to that cash, so they can clean themselves up. Real estate investors get the opportunity to cash in on a great opportunity – the Real Estate Bubble.

See Coach Mitch’s “Ridiculously Simple System…” ™ for details.

All is well,