Chanting Points Memo: “Property Taxes Attack The Middle Class!”

It’s one of the most reliable warhorses in the DFL’s parade of chanting points; that if Local Government Aid (LGA) is cut, it’ll raise property taxes, which is an attack on the middle class.

So I have a question for you middle class homeowners out there: What do you pay for property taxes every month?

Without looking at your mortgage or escrow statements or county tax forms, I mean.

If you’re like most Minnesotans – Americans, really –  you probably don’t know.   You have a rough idea, I suspect – I know I do.  But unless you take a higher than average interest in taxes and home finance, it’s probably fairly ephemeral to you.

That’s intentional, of course; governments love relatively painless taxes, like payroll withholding and escrowed property tax payments.  Money people perceive only abstactly is hardly money at all.  It’s one of the reasons tax libertarians want to abolish payroll withholding; if people see what they’re paying, they get a lot more upset about it.

As an average, Minnesotans’ property taxes are slightly below the national average.  No, really – the national average is 1.38%; Minnesotans pay an average of 1.27%; higher than some high-tax states like California (.68%), higher than some low-tax states (Texas is around 2.5%).  Of course, they’re risen; being relatively “out of sight, out of mind”, local governments find them a fairly simple way to pay for their untrammeled profligacy.

But there’s a reason entrepreneurs push back the hardest on, say, payroll tax increases; because theirs are not withheld from their paychecks; they actually have to write out a check every year to the IRS for their full tax liability; it’s not an abstract thing to them at all.

And the same thing, it’s reasonable to infer, holds true with property taxes.  While most of us working schnooks will squawk if our cities raise them, we barely see them, it’s the people who pay ’em directly that are going to notice them most.

But while many, many people don’t receive withholding, and pay their own taxes, there is a much smaller group that pays their own property taxes.  A few people don’t escrow their taxes, of course; beyond that, there’s only on group of people who get to look at their property taxes face to face.   Of course, some people – the ones that pay attention, the ones that are notautomatically happy to pay for a better city or county – notice property tax hikes (hello, Mayor Coleman).  But for the vast majority of the population, it’s pretty low-pain, whether they know it or not.

It’s people who own their houses outright – especially people with big houses, sometimes plural.  H0uses that cost a lot of money.  And frequently were inherited.

So when the DFL bleats about Local Government Aid leading to middle class tax hikes, don’t be fooled; it’s not the middle class they’re concerned about.  It’s the list of plutocrat Minnesota liberals in Kenwood and Saint Anthony Park, in North Oaks and on Summit Avenue and Orono and Wayzata.

Let’s just make sure we’re clear on that.

13 thoughts on “Chanting Points Memo: “Property Taxes Attack The Middle Class!”

  1. Any one of us can get involved in local government if we want to raise or lower local taxes. If you want to keep your city on the LGA dole, too bad. Your city should adjust its priorities to fit the budget it has, without requiring contributions from people living outside the city limits.

  2. Good points. In a mortgage the property tax is usually bundled with the home owners insurance, making it’s exact amount even more vague.

  3. As I looked at the link, the one thing I could not figure out is what the base that the tax is expressed as a % of. Is it to assessed value or income? States can play around with assessed value quite a bit as well, so if the % is of assessed value, that not necessarily an apples to apples comparison. Many times I have heard the city of St. Paul say, no tax increase, but when I look at the tax bill, the amount going to St. Paul is going up, because they increased the assessed value.

  4. How are property taxes increased in MN? When I lived there at least a portion of it had to be approved by ballot.

  5. Without LGA my current burb has been lowering our property taxes. With LGA when I lived in MPLS my property taxes were going up 10% + every year.

    In the ten years we lived in MPLS we saw nothing but decay. Most of our good neighbors left and a housing project sprung up where a Supermarket had been. Burned up and boarded up houses stayed that way for years not weeks or months. Hearing gunshots was no longer surprising. When a group of “youths” attempted to break in our front door with us at home in the living room it was the last straw. When the officer who responded an hour later didn’t even get out of the car to write the report I was livid.

    That was in artsy fartsy NE. You are not paying for “A Better Minnesota” when you give more to the Sayles Beltons or RT Rybecks of this State you are paying for rot and decay.

  6. Hey! Sharon Sayles-Belton was um the um smartest um bestest um mayor um Minneapolis um ever um had.

  7. You know, if we seen property taxes as a tax on the costs that result from a house being there, there isn’t that much besides paying for infrastructure–a hundred feet of road and sewer/water, maybe a bit for police protection. Never mind that the initial costs for water, sewer, and roads ought to be paid when the house is built…..

    ….and come to think of it, I’m not seeing that this is that big of a cost. Hmmm……

  8. JPMN: Similar story. Lived in MPLS for 10 years. High crime, high taxes and dysfunctional families forced us to the ‘burbs. Got robbed three times, threatened a handful of times and watched every functional family on my block get the hell out of Dodge.

  9. But they have a sweet little choo choo train. It’ll take you down to the Mall of America to spend money you don’t have.

  10. and it only costs a billion dollars a mile… (figures to be adjusted after the debacle I mean expansion into the U of M campus happens)

  11. As a citizen of one of the northern suburbs that hasn’t received LGA since 2003 (and there are quite a few), cuts to LGA DO NOT mean property tax increases since we don’t receive any anyway. If our property taxes increase, it has nothing to do with any cut in state funding.

  12. There are not many taxes that directly hit trust fund babies like Governor Fruitcake, but property taxes are one of them. While it’s easy to manage your income to just what you want to spend, it’s harder to manage your ego and expectations to not have lavish things around you like a mansion when you’ve got that much money in the bank, which is why property taxes are soooo unfair to Richie Richs like our Gov. Nutball.

    Me? I always pay my property tax directly. I had an escrow account once, managed by BoA. After 3 years of never getting it right and hitting me with a $6K back bill for escrow I vowed never to escrow again and never have. Given my history with BoA’s vaunted financial abilities I figure I can do better than BoA and given how we both did before, during, and after the financial crisis I think that was proven pretty convincingly.

    But we have nothing to complain about on property taxes. If you want to see insanity, go back east and pay those bad boys. The brother in law has almost the same size house, same size lot, and in upstate New York pays about 3 times what I do.

  13. Pingback: We Warned You. Oh, Yes, We Did. | Shot in the Dark

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.