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Friday, April 15, 2011

DENNIS STILLINGS: PROPERTY TAX REPEAL WILL BE PASSED - A REPLY TO LLOYD OMDAHL

"Property is surely a right of mankind as real as liberty." — John Adams

I have great sympathy for Lloyd Omdahl.  I too am getting old and set in my ways.  So many things seem too complicated and troublesome to change, even if they are evil and unfair, like the property tax.  Prof. Omdahl quite agrees; indeed as he states, “[Angry citizens] claim that the property tax is unfair.  They are absolutely right.” Furthermore, Omdahl asserts that “It would take a book as fat as ‘War and Peace’ to enumerate the many evils of the property tax.” (L.O. Editorial “It is true: Property taxes are unfair” 3/2/10).

Exhibiting his deeply ingrained patronizing attitude toward the North Dakota electorate, Prof. Omdahl dismisses the 30,000 voters who signed the petition to get property tax repealed as participants in a “pipedream.”  And, as an interpreter of dreams, Prof. Lloyd “Nostradamus” Omdahl pronounces that the property tax repeal will fail at the polls.  As usual, he will be wrong.

Prof. Omdahl claims the credentials of having “been in the middle of the effort to replace the personal property tax.”  He can also “report from experience that it took [ten years]” to take care of the issues involved.  Without commenting on the possibility of a lack of intellectual firepower involved in that project, let us say that the effort must certainly have created a template that could be useful in ridding us of the shabby remains of this unfortunate tax.  Perhaps Prof. Omdahl could head up a study group on this possibility, if that would not be too tiring.

Also, it is a bit odd to use the example of getting rid of the personal income tax as an excuse not to treat the current property tax system the same way.  If you create a monstrosity, expect some problems in removing it.  Don’t just whine about it.

When not whining about difficulties, Prof. Omdahl pontificates with all the confidence of someone who is well accustomed to paying little attention to pesky facts.  It is abundantly clear that he has not read—or cannot remember—the content of the property tax measure.  He clearly has not bothered to acquaint himself with the information available at http://www.empowerthetaxpayer.com/  With this information he could improve his columns on this subject considerably.

As Prof. Omdahl indicates, there is no more unfair tax than the property tax.  Unlike sales and income tax, property tax is not based on a person’s ability to pay.  Unlike with sales and income tax, if you are unable to pay property tax you lose your home.  Unlike sales and income tax the rate at which you are taxed varies from property to property.  Unlike sales or income tax you are billed on some mythical number called “assessed value”—completely arbitrary and subjective and totally unrelated to true market forces.  Unlike sales or income tax, you never get an itemized bill for the property tax you are paying.  That’s because property tax is hidden in every economic transaction we make.  Every time we buy groceries, we are paying the store’s property tax.  Every time we get our car fixed or go to the dentist, we are paying that person’s property tax.  It’s an insidious tax because it is hidden.

Prof. Omdahl asserts that “The state government has already reduced the property tax burden by providing income tax credits and feeding new money into school funding.”  Yes, indeed—and look how well that worked!  That “property tax relief” cost $395M ($197M per year) and reduced property tax a whopping $96M.  That means it cost us $2.10 for every $1 of relief.  Some deal!

Prof. Omdahl wanders on, claiming that “The real estate tax serves a number of legitimate purposes in our tax system. It serves as an income tax on the appreciation of land …”  The appreciation of the land, however, is not realized by the owner until the land is sold!

Next Lord Omdahl sticks his foot in it; he admits that the property tax “ … is a stable form of revenue that protects schools, townships, counties and cities from the vagaries of the economy.”

Yes, it is stable, but only because the schools and townships treat property like an ATM—demanding the money to meet their budgets.  Again, this goes to emphasize the unfairness of the tax.  Omdahl calls this “stable income,” I call it getting blood from a turnip.  If your income goes down, your taxes on that income go down.  There’s no such consideration with property tax.  Most of the rest of us are not protected from the “vagaries of the economy,” and furthermore, with property tax, our homes are held hostage to make sure we come up with the cash.

Prof. Omdahl’s comments are based on so much misinformation and disinformation, not to mention plain old lack of information (but no shortage of pontification) that it is difficult to respond fully to his assertions here.  We suggest that he take seriously what so many North Dakota voters have already taken seriously—the abolition of the property tax—and present his revised opinions in a future column.

*Lloyd Omdahl, “Property tax repeal will fail at polls,” Bismarck Tribune, 4-10-11

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