Spengler » Wisconsin and California Show that Local Taxes are a Political Death Trap
Thursday, June 07, 2012
English: Scott Walker on February 18, 2011 (Photo credit: Wikipedia)
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Here’s a simple piece of arithmetic to keep in mind after Wisconsin voters overwhelmingly supported Gov. Scott Walker and California voters backed pension cuts for retired municipal workers. I reviewed some of these numbers last October in this space, and add some state-level detail below. Back on Jan. 24 I insisted that “Obama is toast” because of the rotten economy. It’s sure starting to look that way.
State and local property tax collections (blue line in the graph below) have risen by 10%, from $400 billion to $440 billion, since 2008, even though the price of homes in most American markets (red line) has fallen by 30% since 2008. Your house is worth less and your property taxes have gone up. Most of the $440 billion in property taxes is paid by homeowners. That compares with the $380 billion a year or so that homeowners pay on the $10 trillion in outstanding home mortgage debt. Homeowners now pay roughly as much in property taxes as in mortgages interest. It used to be a quarter to a third as much. No wonder home prices remain depressed.
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by David P. Goldman
submitted by Michael Kazmar