Re: [UC] Taxation and the libraries
Glenn moyer wrote: But one tax scheme that seems like a no-brainer to consider now, even though to Nutter, it is inviolate and can't be mentioned or considered- The ponzi scheme called the ten year tax abatement. interesting article about the tax abatement in this week's inquirer: http://www.philly.com/philly/news/local/42312127.html excerpt: The tax abatement has got to go, North Philadelphia resident Madeline Shikomba said last night to laughs and cheers at a City Council budget hearing at Temple University. Even before Nutter formally proposed higher property taxes, the volume of grumbling over the abatement program was up. At a series of February budget workshops organized by the University of Pennsylvania and WHYY, attendees said they opposed higher real-estate taxes largely because of the abatements, said workshop leader Chris Satullo. A lot of people see the tax abatement as a sop to rich people from somewhere else. They see it as not fair to people who've lived here their whole lives, said Satullo, a former editor of The Inquirer editorial page. They think their taxes built the streets and the schools, and they're still paying taxes while people who make a lot more money than they do are not paying taxes. Despite the clamor, Nutter remains a staunch supporter of abatements. .. UNIVERSITY*CITOYEN You are receiving this because you are subscribed to the list named UnivCity. To unsubscribe or for archive information, see http://www.purple.com/list.html.
Fwd: [UC] Taxation and the libraries
Hmm, interesting. It is predictable, unless you already own the house, in which case the change to a whole new system is totally unpredictable. How are homeowners with increased resulting taxes helped? Under the current system, we know that: 1. Assessments are unequal across the city relative to market value. It appears that neighborhoods with large minority populations have had rates closer to market value than white neighborhoods. A uniform, market based reassessment is one way to address this. 2. Owners can get stuck when market values jump up on them and their income doesn't keep up. They also get stuck when their income drops even if their house is the same size, but that's hard to handle. And what happens when the record owner passes and the family wants to keep living there? 3. I seem to recall there are state constitutional requirements regarding equal taxation, which obviously require amendment. 4. The idea of tying re-assessment to sales has lots of appeal, since it restricts the cases in which homeowners are forced out by rising values they can't afford. But remember it can also jam people in the other direction when values fall after you buy a house and you end up paying more than your neighbor. 5. Determining tax based solely on size may or may not help the people Karen seeks to help. Someone would have to run a simulated city wide, revenue neutral re-assessment based on size to see who gets screwed and who benefits. It may be rich white condo dwellers who get over, and people with big old houses on large lots in poor neighborhoods that end up at tax sale, or not. Market value is objective and subject to determination even if debatable, and has some intrinsic logic since the tax is related to the value of the asset (not the equity, I know). Imagine if we taxed cars on size instead of purchase price, My leaning is to set taxes based on regular, uniform citywide assessments, but provide exemptions as Brian suggested that delay imposition of the increase until a sale. That'd require a constitutional amendment, Phasing in an increase over a short number of years would not I think help much since at the end of the time, the owner would still be stuck. But again, I wonder what the numbers would look like if the system were implemented. Paul -Original Message- From: KAREN ALLEN kallena...@msn.com To: UnivCity Listserv univcity@list.purple.com Sent: Mon, 5 Jan 2009 5:38 pm Subject: RE: [UC] Taxation and the libraries The danger to longterm homeowners comes from any law that bases real estate taxes on sale price or value, because as Melani is surely aware, a lot of factors determines value. The equalization between neighborho ods that Melani mentioned cannot be done if the standard being used is purchase price, market value, or anything else based on money, because every neighborhood is different. Using a few of her examples from her earlier post: 102 West Highland Avenue, Chestnut Hill: 2 story, semi-detached house lot size: 35' x 100' total sq footage of lot 3500 livable sq footage of house: 2090 7020 McCallum Street, West Mount Airy 2.5 story, semi-detached house with garage lot size 50' x 143 total sq footage of lot: 7,190 livable sq footage of house 2860 716 South Clifton Street, Center City (11th and Fitzwater Sts) 3 story row house with garage lot size 15' x 47' total sq footage of lot: 755 livable sq footage of house 1149 1518 Naudain Street, Center City (beteen Lombard and South off of 15th) 3 story row house lot size 16' x 40' total square footage of lot: 640 livable square footage:1280 Obviously, the one constant in these examples is the price: $400,000. So did the Chestnut Hill and Mount Airy homebuyers get a sweet deal? Did the Center City buyers get ripped off? They all spent $400K, and yet that same $400,000 bought considerably more in West Mount Airy than it did in Center City. And if any of those buyers tried to buy something in Villanova for $400,000, they'd probably be laughed at. All of that is to say that value is su bjective and is prone to a lot of factors; fairness not being one of them. If it were, no one would ask for and get $400K for a house in Center City that wouldn't make a decent closet in West Mount Airy. As far as Melani's example of different rates for the city wage tax, I never said there should be different rates; I said that the standard (the constant that is being used for making the determination) should not be based on value. Is it fair for the person living in the considerably smaller Naudain Street house to have to pay almost the same tax as the person living in the much larger McCallum and Highland ones? But because they paid the same price for the houses, similar taxes is considered fair. If the constant in my examples above were
Re: [UC] Taxation and the libraries
Equitable real-estate valuation, no matter how praiseworthy, can't possibly be installed in time to balance the remainder of the 2008-09 City budget. If City Council slammed the pedal tomorrow, there's a faint possibility it could be enacted in time for the 2009-10 budget that will kick in next July. But don't bet your rent on it! This is a steamy, complex issue that takes time to be sorted out. However, Nutter is trying to balance a 5-year budget with constantly moving numbers. So if we can get real-estate tax reform on line ASAP for Philadelphia, that will help years 3 through 5 of the current crisis. Since Nutter actually has to make some fiscally-binding decisions about year 5 right now, swift and comprehensive reform may be better for the city than its perennial favorite, which is sluggish, parceled and penurious change. As for the library budget, I agree $8 million seems small compared to the gross 5-yr deficit, which is now well over $1 billion. But the person in charge has to start whacking away at that billion with every million at hand, no? Here in the Free Library is a fistful of millions at hand. It's a fistful that, intuitively, might be connected to larger, well-heeled private potential partners. Nutter made it very clear from the beginning, even when times were flush two years ago, he intended to fill public budget gaps with public-private partnerships. He's clearly trying to drive non-City money into these libraries that are at stake. Some of this is already happening. It'll be interesting to follow this development and see how the Free Library of tomorrow emerges as a new public-private partnership. As for the victory of library-closure troops in Common Pleas Court -- the ordinance passed by City Council 20-odd years ago hasn't been well tested yet. At the least, its plain language states the Mayor can't close facilities without approval by Council. However, it's left to the Mayor, not the Council, to pay the bills with the money at hand. If the Mayor doesn't have enough money at hand to maintain all facilities full-time, and isn't legally allowed to close some facilities completely, then about all he can do is close all facilities partially. That's what will happen now. Is this better or worse than what the Administration had proposed? You decide. -- Tony West Glenn, I totally agree that straightening out the ridiculous tax assessment situation will not happen in time to help the libraries. I don't understand why Nutter doesn't back down and say the people have spoken; we'll have to find that $8 million somewhere else and keep the libraries open. He's allowing this standoff to damage his previously stellar reputation, for an amount so small (relatively) that it's barely noticeable in the billion dollar budget gap coming up. My original thought was that the fate of the libraries is now in the hands of City Council, and they haven't even been able to move the city forward on equitable property taxes, given YEARS to work on it - so we'd better not hold our breath here. And if the City were collecting the same amount from everybody whose house has the same value, maybe we wouldn't be $8 million short. - Melani You are receiving this because you are subscribed to the list named UnivCity. To unsubscribe or for archive information, see http://www.purple.com/list.html.
Re: [UC] Taxation and the libraries
In a message dated 1/6/09 6:20:20 PM, anthony_w...@earthlink.net writes: Here in the Free Library is a fistful of millions at hand. It's a fistful that, intuitively, might be connected to larger, well-heeled private potential partners. Nutter made it very clear from the beginning, even when times were flush two years ago, he intended to fill public budget gaps with public-private partnerships. He's clearly trying to drive non-City money into these libraries that are at stake. Some of this is already happening. It'll be interesting to follow this development and see how the Free Library of tomorrow emerges as a new public-private partnership. Early on in this discussion, one reader did some research on the Rittenhouse Square Library branch and found that it has an endowment, and a sponsor group owns its space and materials. So we can conclude that it's REALLY CHEAP for the Free Library to operate that branch. It would be great if other libraries continued to be libraries, operating under this model, with endowments. When Mayor Nutter begins talking about having private groups take over the libraries and convert them to knowledge centers or some such things, though, we have to worry about how long they would last as these different entities. Private partners are different from endowments - a private partner can go out of business, lose interest, etc. And then, since the place has become a knowledge center, it is no longer a part of the Free Library system and may just quietly close down. For example, it would seem obvious that the nonprofit group sponsored by Fumo might take over the Fumo Family Library branch as a knowledge center - but if Fumo is found guilty and goes to jail, that nonprofit may lose steam and cease to operate, and then that center, without a sponsor, might quietly close. Right now while they are all still LIBRARIES and the spotlight is on them, their chance of survival may be stronger than down the road if they are privately run. Just saying. Melani Melani Lamond, Associate Broker Urban Bye, Realtor PA License Number AB048377L 3529 Lancaster Ave., Philadelphia, PA 19104 cell phone 215-356-7266 - office phone 215-222-4800 #113 ** New year...new news. Be the first to know what is making headlines. (http://www.aol.com/?ncid=emlcntaolcom0026)
Re: [UC] Taxation and the libraries
Glenn, I totally agree that straightening out the ridiculous tax assessment situation will not happen in time to help the libraries. I don't understand why Nutter doesn't back down and say the people have spoken; we'll have to find that $8 million somewhere else and keep the libraries open. He's allowing this standoff to damage his previously stellar reputation, for an amount so small (relatively) that it's barely noticeable in the billion dollar budget gap coming up. My original thought was that the fate of the libraries is now in the hands of City Council, and they haven't even been able to move the city forward on equitable property taxes, given YEARS to work on it - so we'd better not hold our breath here. And if the City were collecting the same amount from everybody whose house has the same value, maybe we wouldn't be $8 million short. - Melani Melani Lamond, Associate Broker Urban Bye, Realtor PA License Number AB048377L 3529 Lancaster Ave., Philadelphia, PA 19104 cell phone 215-356-7266 - office phone 215-222-4800 #113 ** New year...new news. Be the first to know what is making headlines. (http://www.aol.com/?ncid=emlcntaolcom0026)
Re: [UC] Taxation and the libraries
In a message dated 1/5/09 12:18:43 AM, briansi...@gmail.com writes: how about this for a solution?for _primary residences_, people's _homes_... apply the new tax standard only to properties purchased after the date the tax standards take effect. This way, current homeowners won't have to worry or make radical readjustments to keep their homes. Their taxes remain as they are. But if they sell, the new tax structure applies to the new owners. In a message dated 1/5/09 11:38:57 AM, kallena...@msn.com writes: If the city were to collect the same amount from everybody whose house has the same value, the City would have legions of people who would be forced to move because they could no longer afford to pay the property tax. A person who paid $50,000 for their house in the 1960's or '70's would now have to pay the same tax as someone who last year paid $500,000 for the house next door. The person who paid current market value would presumably have the financial ability to pay. That cannot be assumed about longterm homeowners. And longterm homeowners should not be forced to choose between providing for their families, and paying an exhorbitant property tax. I think that you rather radically misconstrued my example. I didn't say anything about taxes going up on all similar houses, every time a house sells. The taxes on the houses in my example weren't set by the BRT AFTER the houses sold for $400,000 - they were set THE YEAR BEFORE the sales, when the houses hadn't sold at all. The tax amounts on those houses are likely the same as the other homeowners on their blocks were and are currently paying - whether they arrived in the 1960s, as in your example, Karen, or in 2007. This is definitely the case at 426 S. 47th; you can look it up on Hallwatch.org. The sellers moved into the house in 1971. Yet their tax bill, $3372, is the same as that of their neighbors who arrived on the block in 2006. There's no increase for the neighbors based on the 2008 sale price, and no need for anyone to panic and move! My example was to show that there has to be equalization between neighborhoods, because assessors for different areas don't seem to be setting assessments at the same level even when the houses have the same value. I used current sales because we can be most certain of the actual market value for the houses that just sold - $400,000! If the end result of the BRT's corrections is to be tax neutral, then we're not talking about raising everyone's tax on the $400,000 house to the amount being paid by the highest payer now, to $3578. Nor are we talking about lowering everyone's taxes to the amount now paid by the lowest payer, $1542. We're talking about everyone paying somewhere in between those two rates. Some folks would pay somewhat more, and some would pay somewhat less. Brian, I'm not saying that on your block, taxes should increase to the point where they are unaffordable. I'm saying that if houses on your block are selling at about $400,000 and an assessor has set a rate for your block based on that, then the blocks in the Graduate Hospital area where houses sell for that amount shouldn't be paying lower taxes than you are - and the blocks in Chestnut Hill where houses sell for that amount shouldn't be paying higher taxes than you are. Your ideas for different systems of taxation are interesting, Brian Karen, but not currently legal; PA law says that these taxes must be equal. The problem is that they are NOT equal right now; the city is breaking the law. The City is required by law to assess everyone at the same rate and have them pay the same property tax for all properties with the same value. (But there are legal ways to write special protections into the laws to postpone or otherwise soften the impact on the elderly, those on fixed income, and others in special situations. And of course, if the condition of your house is much different from the average condition of other houses on the block, that can affect your assessment, because it affects your value.) Spot assessing - the practice of raising the assessment only on the new buyer's house but not on similar houses on the block - is illegal. Turn the example around for a minute and let's talk about another tax we pay: wage tax. Would it be legal for the city to say that as the wage tax rate changed (up OR down; this tax has been going down), an employee would continue to pay the same rate as when s/he was hired, rather than having his/her tax rate adjusted along with everyone else's rate? Would we say, you were able to pay that rate when you were hired, so you must still pay that rate, even though if you were hired today, your tax would be lower? Or higher; would it be fair to charge a new employee a higher rate? By law, that isn't how property or wage tax works! Everybody pays the
RE: [UC] Taxation and the libraries
[I}f the City were collecting the same amount from everybody whose house has the same value..., If the city were to collect the same amount from everybody whose house has the same value, the City would have legions of people who would be forced to move because they could no longer afford to pay the property tax. A person who paid $50,000 for their house in the 1960's or '70's would now have to pay the same tax as someone who last year paid $500,000 for the house next door. The person who paid current market value would presumably have the financial ability to pay. That cannot be assumed about longterm homeowners. And longterm homeowners should not be forced to choose between providing for their families, and paying an exhorbitant property tax. Property values have already been artifically driven up. Those banks who essentially gave away mortgage money to unqualified buyers did the equivalent of pumping helium into the housing bubble. Apart from creating the current foreclosure crisis, the banks also brought legions of new buyers into the housing market to compete for a finite supply of housing, creating additional demand, and thus higher prices, that would not have otherwise existed had those buyers been rejected for mortgages. So on top of that mess, existing homeowners should now be expected to pay higher property taxes based on inflated home prices. This illustrates why value is the least reliable basis for determining a tax, because it is relative, and can be easily manipulated. Should there be an across-the-board standard for calculating property taxes? Absolutely. Should value be the standard? Absolutely not. Why are equity and value being treated as synonymous, when a tax based on an ever-fluctuating property value would only lead to economic hardship or the potential for people to lose their homes? From: mlam...@aol.comdate: Mon, 5 Jan 2009 10:55:05 -0500Subject: Re: [UC] Taxation and the librariesTo: glen...@earthlink.net; univc...@list.purple.comglenn,I totally agree that straightening out the ridiculous tax assessment situation will not happen in time to help the libraries. I don't understand why Nutter doesn't back down and say the people have spoken; we'll have to find that $8 million somewhere else and keep the libraries open. He's allowing this standoff to damage his previously stellar reputation, for an amount so small (relatively) that it's barely noticeable in the billion dollar budget gap coming up. My original thought was that the fate of the libraries is now in the hands of City Council, and they haven't even been able to move the city forward on equitable property taxes, given YEARS to work on it - so we'd better not hold our breath here. And if the City were collecting the same amount from everybody whose house has the same value, maybe we wouldn't be $8 million short.- MelaniMelani Lamond, Associate BrokerUrban Bye, RealtorPA License Number AB048377L3529 Lancaster Ave., Philadelphia, PA 19104cell phone 215-356-7266 - office phone 215-222-4800 #113**New year...new news. Be the first to know what is making headlines. (http://www.aol.com/?ncid=emlcntaolcom0026)
Re: [UC] Taxation and the libraries
mlam...@aol.com wrote: Your ideas for different systems of taxation are interesting, Brian Karen, but not currently legal; PA law says that these taxes must be _equal_. The problem is that they are NOT equal right now; the city is breaking the law. The City is required by law to assess everyone at the same rate and have them pay the same property tax for all properties with the same value. * (But there are legal ways to write special protections into the laws to postpone or otherwise soften the impact on the elderly, those on fixed income, and others in special situations. And of course, if the condition of your house is much different from the average condition of other houses on the block, that can affect your assessment, because it affects your value.)* I'm sure there are ways of getting around this. There always are. But since the point is to soften the impact of the new tax rates on homeowners, how about this. When the new tax rates are established, we'll know what the Old and New taxes would be for any given property, right? If the difference is greater than some amount-- say $500-- the taxes on that property would be _gradually_ raised to the new levels over the next few years, by no more than $100 per year. The impact of any increases is lessened, and the taxes gradually become more fair. You are receiving this because you are subscribed to the list named UnivCity. To unsubscribe or for archive information, see http://www.purple.com/list.html.
Re: [UC] Taxation and the libraries
so that we can start to straighten out our financial mess and figure out a way to keep the libraries - indeed, the whole city! - open for the long term future. Melani, It's important to separate the library and poolclosures from the 5 year budget for right now. M. Nutter's reaction to the court order shows conclusivelythat he is using the recessionto justifythese closures and not merely reacting to the budget problems. The court order confirmed that he was acting inappropriatelyand against the law. While he claims that he has "done his best," he is trying every possible method to avoid proving his case. Now, he is trying to hurt the library system much more and pit neighborhood against neighborhood. Wouldn't it be better toobey the law and transparently prove the "no-brainer" that he is claiming, ratherthan to avoid proving his case at all costs? His reaction to the court order, which confirms that he is bound by democratic process rather than dictatorial authority, is to move ahead with all the transfers anyway! He is not ignoring the letter of the ruling, buthe is in contempt of theimplicit message. Forcing the staffs at the 11to be transfered, and forcing the system to pay overtime drains more money. It will also put the system into chaos, hurt the morale of the staff and force a confusing and unplanned series of "rolling closures." Delay, intimidate, threaten and blame othersare his reactions to keep the secrets of his planned closures.Is that the leadership style that works best during a financial crisis? Ironically, the more he delays proving his case, the more he creates a real crisis for the libraries. Butif he indeednever had a compelling case, like his slam-dunk move during the holidays suggested, we have a real problem. (I attended the 2nd day of the hearing. His city lawyers, ain't got no case!) Unfortunately, his real reasons for these closures would become apparent during city council proceedings. So he says, the judge and the people must suspend law and give him dictatorial authority, or we'll be sorry. He is committed at this point. Long termchages intax policy, etc. will have nothing to do with stopping the privatization of libraries and pools. Undoubtedly, you and I are going to need to lead a march on city hall and demand impeachment or jail for the mayor. "The people, united, will never be defeated!" Your comrade, Glenn -Original Message- From: mlam...@aol.com Sent: Jan 5, 2009 12:05 AM To: pf...@ccat.sas.upenn.edu, univcity@list.purple.com Subject: Re: [UC] Taxation and the libraries In a message dated 1/3/09 7:20:36 PM: ...While the fact that the city needs additional revenue is obvious, any changes to the property tax structure have to be made with careful deliberation as to the consequences of dramatic increases...Agreed, totally - and remember, I also wrote:...[Philadelphia Forward] the BRT have given City Council all sorts of information on how other cities handled the transition as they updated taxes that had gotten way out of whack. It's important that the elderly, folks on fixed incomes, and others in special situations aren't forced out of their houses if the plan for fair taxation is implemented. But there are ways to avoid thisBut, the keeping the current system has consequences too: the taxes are unequal, unfair, and just plain wacky. There seems to be no logical explanation for the "Market Values" set by the BRT. See below: here's a close-to-home example of how much we need tax reform, of how obvious it is that the BRT isn't getting the values right. Right here in University City, each of these four single family properties shown below sold after June 1, 2008. All sold for the exact same price: $400,000. And each had been reassessed recently (in 2007) by the BRT. So you'd expect that the properties would have had similar tax bills, right? Yet, look at their 2008 tax bills:$400,000 sale price19143: 426 S. 47th St/ tax $3372/ Market Value per BRT $127,50019143: 4523 Regent St/ tax $2742/ Market Value per BRT $103,70019143: 4836 Hazel Ave/ tax $2470/ Market Value per BRT $93,40019104: 244 S. 45th St/ tax $1962/ Market Value per BRT $74,200Especially startling is the fact that the only house in the group which is in the catchment area for the Alexander School is paying the lowest tax amount! The houses that CANNOT send their children to the desirable public school are paying $508, $780, and $1410 MORE than the house from which children CAN attend the school.But these aren't the only single family houses in Philadelphia which sold in that time period for $400,000 - here are a few others. All had their Market Value set by the BRT in 2007 except for 1511 Kater (set in 2001). None have partial tax abatements; I checked each one:$400,000 sale price19119: 7020 McCallum St/ tax $3845/ Market Value per BRT $145,40019118: 102 W. Highland Ave/ tax $3837/ Market Value per BRT $145,10019146: 1518 Naudain St/ tax $3189/
Re: [UC] Taxation and the libraries
In a message dated 1/5/09 3:22:36 PM, briansi...@gmail.com writes: But since the point is to soften the impact of the new tax rates on homeowners, how about this. When the new tax rates are established, we'll know what the Old and New taxes would be for any given property, right? If the difference is greater than some amount-- say $500-- the taxes on that property would be _gradually_ raised to the new levels over the next few years, by no more than $100 per year. The impact of any increases is lessened, and the taxes gradually become more fair. Yes, that's one of the kinds of things that can be built in. Definitely possible. Melani Melani Lamond, Associate Broker Urban Bye, Realtor PA License Number AB048377L 3529 Lancaster Ave., Philadelphia, PA 19104 cell phone 215-356-7266 - office phone 215-222-4800 #113 personal fax 215-386-1345 Recipient of the Greater Philadelphia Association of Realtors awards Diamond award for over $8 million in sales and ALL SIX of the West Philadelphia awards This e-mail is intended solely for the use of the individual to whom it is addressed and may contain information that is privileged, confidential or otherwise exempt from disclosure. If the reader of this e-mail is not the intended recipient or the employee or agent responsible for delivering the message to the intended recipient, you are hereby notified that any dissemination, distribution, or copying of this communication is strictly prohibited. If you have received this communication in error, please immediately notify us by replying to the original message at the listed e-mail address. Thank You. ** New year...new news. Be the first to know what is making headlines. (http://www.aol.com/?ncid=emlcntaolcom0026)
Re: [UC] Taxation and the libraries
"I totally agree that straightening out the ridiculous tax assessment situation will not happen in time to help the libraries. I don't understand why Nutter doesn't back down and say "the people have spoken; we'll have to find that $8 million somewhere else and keep the libraries open." He's allowing this standoff to damage his previously stellar reputation, for an amount so small (relatively) that it's barely noticeable in the billion dollar budget gap coming up." That's key. While budget and tax issues are important, these closures must be seen as a completely different matter. Likeweapons of mass destruction, freedom and democracy are real issues,those had nothing to do with invading Iraq. Theuse of those "crisis" issueswas meant to obfuscate the real purpose,like the budget gave Nutteran opening to make this move on closure of the people's public assets. To answer your confusion,he is up to something more than balancing the budget. But one taxscheme that seems like a no-brainer to consider now, even though to Nutter, it is inviolate and can't be mentioned or considered- The ponzi scheme called the ten year tax abatement. (Please don't tell Paul Levy I mentioned these or he will get hopping mad!) Most well informed people recognized that abuilding shift was occuringin metro regions around the country when this was passed. As the land for exoburban development ran out and the reality of oil set in, the devlopers knew they wanted to come back to the central cities which were being promoted. This unbelievably unfair tax welfarewould not hurt those onlower incomes if it was ended. This is the most ridiculous unfair property tax policy we have and Nutter won't consider it! The tax abatement was totally unnecessary. It was intended to give windfall profits to developers, who inflated the prices of condos and took 10 years of tax revenue for themselves.We were told that riches would trickle down to the city, if we just trusted the scheme.(Instead we got an artificialhousing bubble and a budget which depends on heavy taxes for the working and poor tosubsidize that welfare for rich developers.) But Nutter won't even consider ending these windfall profits while hetries tofool us. Any news on the outcome of today's legal maneuvering to destroy the libraries? Glenn You can fool some people some time, but you can't fool all the people all the time, Bob Marley -Original Message- From: mlam...@aol.com Sent: Jan 5, 2009 10:55 AM To: glen...@earthlink.net, univcity@list.purple.com Subject: Re: [UC] Taxation and the libraries Glenn,I totally agree that straightening out the ridiculous tax assessment situation will not happen in time to help the libraries. I don't understand why Nutter doesn't back down and say "the people have spoken; we'll have to find that $8 million somewhere else and keep the libraries open." He's allowing this standoff to damage his previously stellar reputation, for an amount so small (relatively) that it's barely noticeable in the billion dollar budget gap coming up. My original thought was that the fate of the libraries is now in the hands of City Council, and they haven't even been able to move the city forward on equitable property taxes, given YEARS to work on it - so we'd better not hold our breath here. And if the City were collecting the same amount from everybody whose house has the same value, maybe we wouldn't be $8 million short.- MelaniMelani Lamond, Associate BrokerUrban Bye, RealtorPA License Number AB048377L3529 Lancaster Ave., Philadelphia, PA 19104cell phone 215-356-7266 - office phone 215-222-4800 #113**New year...new news. Be the first to know what is making headlines. (http://www.aol.com/?ncid=emlcntaolcom0026) You are receiving this because you are subscribed to the list named "UnivCity." To unsubscribe or for archive information, see .
RE: [UC] Taxation and the libraries
The danger to longterm homeowners comes from any law that bases real estate taxes on sale price or value, because as Melani is surely aware, a lot of factors determines value. The equalization between neighborhoods that Melani mentioned cannot be done if the standard being used is purchase price, market value, or anything else based on money, because every neighborhood is different. Using a few of her examples from her earlier post: 102 West Highland Avenue, Chestnut Hill:2 story, semi-detached houselot size: 35' x 100'total sq footage of lot 3500livable sq footage of house: 2090 7020 McCallum Street, West Mount Airy2.5 story, semi-detached house with garagelot size 50' x 143total sq footage of lot: 7,190livable sq footage of house 2860 716 South Clifton Street, Center City (11th and Fitzwater Sts)3 story row house with garagelot size 15' x 47'total sq footage of lot: 755livable sq footage of house 1149 1518 Naudain Street, Center City (beteen Lombard and South off of 15th)3 story row houselot size 16' x 40'total square footage of lot: 640livable square footage:1280 Obviously, the one constant in these examples is the price: $400,000. So did the Chestnut Hill and Mount Airy homebuyers get a sweet deal? Did the Center City buyers get ripped off? They all spent $400K, and yet that same $400,000 bought considerably more in West Mount Airy than it did in Center City. And if any of those buyers tried to buy something in Villanova for $400,000, they'd probably be laughed at. All of that is to say that value is subjective and is prone to a lot of factors; fairness not being one of them. If it were, no one would ask for and get $400K for a house in Center City that wouldn't make a decent closet in West Mount Airy. As far as Melani's example of different rates for the city wage tax, I never said there should be different rates; I said that the standard (the constant that is being used for making the determination) should not be based on value. Is it fair for the person living in the considerably smaller Naudain Street house to have to pay almost the same tax as the person living in the much larger McCallum and Highland ones? But because they paid the same price for the houses, similar taxes is considered fair. If the constant in my examples above were livable space and lot size, equalization between neighborhoods could occur. Homeowners in Center City would pay substantially less than the homeowners in Northwest Philadelphia. Yet they would all be paying at the same predictable rate. And current homeowners would not have to be put in the position of fearing neighborhood improvement and worrying about losing their homes. From: mlam...@aol.comdate: Mon, 5 Jan 2009 14:52:06 -0500Subject: Re: [UC] Taxation and the librariesTo: kallena...@msn.com; univcity@list.purple.com; briansi...@gmail.comin a message dated 1/5/09 12:18:43 AM, briansi...@gmail.com writes:how about this for a solution?for _primary residences_, people's _homes_... apply the new tax standard only to properties purchased after the date the tax standards take effect. This way, current homeowners won't have to worry or make radical readjustments to keep their homes. Their taxes remain as they are. But if they sell, the new tax structure applies to the new owners.In a message dated 1/5/09 11:38:57 AM, kallena...@msn.com writes: If the city were to collect the same amount from everybody whose house has the same value, the City would have legions of people who would be forced to move because they could no longer afford to pay the property tax. A person who paid $50,000 for their house in the 1960's or '70's would now have to pay the same tax as someone who last year paid $500,000 for the house next door. The person who paid current market value would presumably have the financial ability to pay. That cannot be assumed about longterm homeowners. And longterm homeowners should not be forced to choose between providing for their families, and paying an exhorbitant property tax. I think that you rather radically misconstrued my example. I didn't say anything about taxes going up on all similar houses, every time a house sells. The taxes on the houses in my example weren't set by the BRT AFTER the houses sold for $400,000 - they were set THE YEAR BEFORE the sales, when the houses hadn't sold at all. The tax amounts on those houses are likely the same as the other homeowners on their blocks were and are currently paying - whether they arrived in the 1960s, as in your example, Karen, or in 2007. This is definitely the case at 426 S. 47th; you can look it up on Hallwatch.org. The sellers moved into the house in 1971. Yet their tax bill, $3372, is the same as that of their neighbors who arrived on the block in 2006. There's no increase for the neighbors based on the 2008 sale price, and no need for anyone to panic and move! My example was to show that there
Re: [UC] Taxation and the libraries
In a message dated 1/5/09 5:39:54 PM, kallena...@msn.com writes: If the constant in my examples above were livable space and lot size, equalization between neighborhoods could occur. Homeowners in Center City would pay substantially less than the homeowners in Northwest Philadelphia. Yet they would all be paying at the same predictable rate. And current homeowners would not have to be put in the position of fearing neighborhood improvement and worrying about losing their homes. Hey, I'll bet you could buy a HUGE place in Mantua for $400,000! But would the person who prefers the relative safely convenience of, say, Fitler Square, even though the houses there are tiny for that price, choose Mantua instead if s/he realizes there's more space available in Mantua? I don't think so! The trite but true first consideration in real estate is location, location, location. By law, the person who owns a small house on a Mantua block is to have a lower tax assessment than the person who owns a large house on the same, or a similar, Mantua block. But also by law, any person who owns a $400,000 house anywhere in the city is to have the same tax assessment as any other person who owns a $400,000 house, no matter where the neighborhoods are, because the law says the assessments are to be based on market value of the properties. Not size! Not location! Market value. This isn't my decision; I'm only repeating what the law says. As an attorney, Karen, I'm sure that you can appreciate the weight of the law. One must either follow it, or try to amend it. The city, however, has been flagrantly breaking the law. There are threats of a lawsuit if it continues, and I understand that the BRT is about to begin to rectify the situation. NOT by the BRT raising everyone's assessment whenever a neighboring house is sold! The plan is to adjust the inappropriate assessments up or down as needed, while at the same time, making the process more transparent so it's easy for taxpayers to see if their assessments appear inappropriate. There will be no more setting a tax assessment at what's supposed to be about 1/3 of the market value as the BRT does now, for one thing - in the future, they will set it at what's supposed to be the TRUE market value. (And then, this year, the BRT will expect City Council to lower the RATE by which the assessment is multiplied to get the tax bill. If City Council doesn't do that, the bills will be impossibly high for everyone. But City Council is aware of this.) With the transparency of true market value, it will be easy for a homeowner to appeal if his/her assessment it is not correct. (Under the current system, how could the buyers of 426 S. 47th, paying $400,000 for the house, tell if they are being overcharged or undercharged on taxes, when the BRT now tells them that their new home is assessed at $40,800?) So, we will soon have tax equalization. And as Brian suggests, City Council can act to phase in tax increases to soften the blow. And they can act to cap the amount the elderly or those on fixed incomes must pay, for now - possibly let those folks wait till they sell the house to pay the extra amount. There are many, many suggestions - pages and pages of them - which the BRT compiled for City Council's review, for ways to soften the blow at the same time they receive the new assessments and act to revise the rate. But, no matter what, the law does not allow the city to charge less tax on houses in University City than on houses in Mt. Airy, and even less for houses in Grad Hospital, when the houses have the very same market value. This will either get fixed, or the city will get sued and then it will get fixed. Or Karen will take her case to City Council, rather than arguing with me, and change the law - except that I think it's actually a PA law, not a Philadelphia law, so it will be off to Commonwealth Court, to change the law for all of Pennsylvania. And now, if we don't want to pay more tax for the libraries (though several people wrote to me off list and said they were willing), what is our next step to keep the libraries open? - Melani Melani Lamond, Associate Broker Urban Bye, Realtor PA License Number AB048377L 3529 Lancaster Ave., Philadelphia, PA 19104 cell phone 215-356-7266 - office phone 215-222-4800 #113 personal fax 215-386-1345 ** New year...new news. Be the first to know what is making headlines. (http://www.aol.com/?ncid=emlcntaolcom0026)
RE: [UC] Taxation and the libraries
Yes, you’re quite right. Property taxes can be one of the big instruments for displacement and gentrification and can be very regressive indeed. Thanks for adding your analysis and clarification. I wasn’t commenting or considering Melani’s actual tax proposal, but her closing. I should have been clear in my response. I was thrilled because I felt she was sincere about a deeper desire for fairness and to think of those beyond the border’s of the UCD. It’s a person’s principles inside that are important and which allow them to reconsider the surface of a proposal or label. Like me, I hope Melani considers and is moved by your analysis. These labels like “actual value initiative” can be confusing at first glance. Here is a good example. When I first read about UCD and Penn Praxis, my reaction was; these people are great and their ideas and intentions are right on. Hahaha. I tend to give the benefit of the doubt, but I was certainly wrong in those initial assessments. So, I agree with your assessment about the tax scheme, but I see something deeper inside Melani that pleases me. I give her such a hard time when she is working in a bad direction that I don’t want to ignore the good qualities that sometimes pop out from the real Melani inside. Thanks again for discussing the actual taxation idea. Glenn -Original Message- From: KAREN ALLEN <kallena...@msn.com>Sent: Jan 3, 2009 7:19 PM To: UnivCity Listserv <UNIVCITY@LIST.PURPLE.COM>Subject: RE: [UC] Taxation and the libraries Glenn, While the fact that the city needs additional revenue is obvious, any changes to the property tax structure have to be made with careful deliberation as to the consequences of dramatic increases.A property tax has thepotential to be very oppressive, because it taxes an asset whose valueexists only on paper until it's sold (calledunrealized gain).Even the dreaded Internal Revenue Service does not tax an asset until it's sold; whether it's a home or a stock, the IRS bases its tax calculation onrealized gain-- what the seller actually received at sale.The value of a stock isn't taxed every year that it's owned; it's taxed only when it's sold and whenthe seller has the money to pay the tax. But as long as an owner is livingin a house, there is no relationship between the current value of the house and the owner's ability to pay an annual tax based on that current value. The result would be a lot of people losing their homes because the value went up on paper, creating a tax bill that they can't afford topay. In the case of landlords, they'd pass the increase on to tenants, making rents exhorbitantly high.If the City wanted to have a property tax based on initial purchase price, with a small percentage increase each year thereafter, I would have no problem with that. Or based on square footage, lot size,whatever. Or if they wanted to raise the wagetax, I'd have no problem with that because that would be based onwhat I earn; I would have the money to pay it and it would be withheld soI would never even see the money. If the City wants to levy a tax on the gain when a house is sold, I have no problem with that. Same with a sales tax.There are many ways to tax based on money the taxpayer actually has.No one wants to be forced to sell their house because they can't afford to live in it anymore. Date: Sat, 3 Jan 2009 18:09:01 -0500From: glen...@earthlink.netTo: mlam...@aol.com; UnivCity@list.purple.comSubject: Re: [UC] Taxation and the libraries It's how the City will operate in the future. For that, we need fair and appropriate taxation. Those of us who can afford to pay more, will probably not be happy living in a city where we have spare cash, but some folks living nearby don't have libraries or other city services. We need to think long term here. Unfortunately, but realistically, taxes are a really important part of the equation.Bravo Melani!I haven't studied the merits of the local taxationplans and detailsas you have, butyou're points are right on the money. And what yousay about fairness in your closing is applicable to the regressive tax structure, which has been hurting our fellow Americans and our cityat an alarming rate over the past 30 years.Thanks for taking the time to organize these examples for us.I am not so sympathetic to the mayor as you. The process he engagedsuggests that he is not working for the fair , more egalitarian society, thatyouand I believe in. (You knowI reactstrongly tounfair undemocratic processes)This vision for society is very different than the vision of separating the UC district from the rest of our city. Great post.Glenn -Original Message- From: mlam...@aol.com Sent: Jan 3, 2009 1:57 PM To: UnivCity@list.purple.com, pf...@ccat.sas.upenn.edu Subject: [UC] Taxation and the libraries The fate of the 11 libraries is now before City Council. Mayor Nutter had to make some tough decisions to balance the City's budget, and the library closing choice seems
Re: [UC] Taxation and the libraries
In a message dated 1/3/09 7:20:36 PM: ...While the fact that the city needs additional revenue is obvious, any changes to the property tax structure have to be made with careful deliberation as to the consequences of dramatic increases... Agreed, totally - and remember, I also wrote: ...[Philadelphia Forward] the BRT have given City Council all sorts of information on how other cities handled the transition as they updated taxes that had gotten way out of whack. It's important that the elderly, folks on fixed incomes, and others in special situations aren't forced out of their houses if the plan for fair taxation is implemented. But there are ways to avoid this But, the keeping the current system has consequences too: the taxes are unequal, unfair, and just plain wacky. There seems to be no logical explanation for the Market Values set by the BRT. See below: here's a close-to-home example of how much we need tax reform, of how obvious it is that the BRT isn't getting the values right. Right here in University City, each of these four single family properties shown below sold after June 1, 2008. All sold for the exact same price: $400,000. And each had been reassessed recently (in 2007) by the BRT. So you'd expect that the properties would have had similar tax bills, right? Yet, look at their 2008 tax bills: $400,000 sale price 19143: 426 S. 47th St/ tax $3372/ Market Value per BRT $127,500 19143: 4523 Regent St/ tax $2742/ Market Value per BRT $103,700 19143: 4836 Hazel Ave/ tax $2470/ Market Value per BRT $93,400 19104: 244 S. 45th St/ tax $1962/ Market Value per BRT $74,200 Especially startling is the fact that the only house in the group which is in the catchment area for the Alexander School is paying the lowest tax amount! The houses that CANNOT send their children to the desirable public school are paying $508, $780, and $1410 MORE than the house from which children CAN attend the school. But these aren't the only single family houses in Philadelphia which sold in that time period for $400,000 - here are a few others. All had their Market Value set by the BRT in 2007 except for 1511 Kater (set in 2001). None have partial tax abatements; I checked each one: $400,000 sale price 19119: 7020 McCallum St/ tax $3845/ Market Value per BRT $145,400 19118: 102 W. Highland Ave/ tax $3837/ Market Value per BRT $145,100 19146: 1518 Naudain St/ tax $3189/ Market Value per BRT $120,600 19147: 716 S. Clifton St/ tax $2927/ Market Value per BRT $110,700 19146: 632 S. Bambrey St/ tax $2063/ Market Value per BRT $78,000 19146: 1511 Kater St/ tax $1595/ Market Value per BRT $60,300 19146: 811 S. 17th St/ tax $1542/ Market Value per BRT $58,300 Some of these properties are paying a higher amount in taxes than the University City group, others are paying a lower amount. Comparing to University City, it appears to be cheaper to own a $400,000 house in the Graduate Hospital area, and more expensive to own a $400,000 house in Chestnut Hill/ Mt. Airy. But each of the houses has the same sale price! The taxes on the houses which sold for $400,000 vary from $1542 to $3845! And the BRT places their values in a range from $58,300 to $145,400! (NOTE: we would have to expect the Board of Revision of Taxes (BRT) Market Values to be lower than $400,000; the city has fallen so far behind that if the properties were valued at $400,000, the taxes at the current rate (set by City Council years ago, and not changed in the 25+ years I've been selling real estate) would be way too high. But, we should be able to expect that all properties selling for about $400,000 would have ABOUT THE SAME BRT Market Value - yet clearly that isn't the case.) So once again, I'm suggesting that we need to press City Council and the BRT to get the taxes RIGHT, to assess everyone FAIRLY, so that we can start to straighten out our financial mess and figure out a way to keep the libraries - indeed, the whole city! - open for the long term future. - Melani Lamond Melani Lamond, Associate Broker Urban Bye, Realtor PA License Number AB048377L 3529 Lancaster Ave., Philadelphia, PA 19104 cell phone 215-356-7266 - office phone 215-222-4800 #113 ** New year...new news. Be the first to know what is making headlines. (http://www.aol.com/?ncid=emlcntaolcom0026)
[UC] Taxation and the libraries
The fate of the 11 libraries is now before City Council. Mayor Nutter had to make some tough decisions to balance the City's budget, and the library closing choice seems to have been a particularly poor one. But, Mayor Nutter is not the villain here. Our city's tax structure is a more likely candidate for that role. It is totally out of whack and unreasonable in many ways. And City Council has a large role in our tax problems. My 2009 Philadelphia property tax bills came a few weeks ago, and when I look at them, the City's financial problems become somewhat more understandable. For my large stone house on 46th St. (counting the apartment in the rear, it has 14 rooms), my tax bill for 2009 is just $3306. Further, looking at the Board of Revision of Taxes (BRT) web site, I see that I've been paying that same amount since 2003 - if not earlier; the web site only goes back to 2003. Though of course, the City's costs have gone up every year. My sister in law who lives near Princeton (in Plainsboro, NJ) told me last week that the taxes on her much smaller 7 room house are about $12,000 a year. The City certainly needs to become more efficient and accountable in its spending. I have stories, and I'm sure many others on the listservs do also, about employees not doing their jobs and/or not being given a very rigorous workload. But in addition to demanding cost-cutting and streamlining from City departments, it may be time to face the likely reality that it's simply impossible for the City to function professionally and take care of its citizens' needs in 2009, on the amount of tax money it is currently billing. I've heard quiet rumblings about property and wage taxes throughout the library battle. Folks are beginning to feel that the City should be asking those of us who can afford it, to pay a little more. This sounds reasonable to me. But City Council would have to raise the tax rate, and expecting them to handle that quickly and conscientiously is perhaps unrealistic. Taking a step backward here, City Council and the BRT have joint responsibilities for taxation, and they have been grappling with - well actually, trying to avoid grappling with - another property tax situation for several years now: currently, our taxes aren't equal or fair, based on our property values, though the law requires them to be. Right now, neighborhoods with lower property values pay disproportionately high taxes, compared to neighborhoods with higher values - including University City. For example, in November, 2005, a buyer of mine bought a 3-story row house in Mantua, in the 700 block of NORTH 43rd St. (north of Lancaster) for $40,000. The block was shaky, and the house needed just about everything. The taxes for that house were $550. Checking up on it now, I see that the City has INCREASED that homeowner's taxes in 2007. Now he pays $592. Meanwhile, on the 400 block of SOUTH 43rd St., the BRT's records show a 3-story row house which sold 4 months later, in March, 2006, for $450,000. Its taxes also went up after the sale - from $1745 to $1878. Property taxes are supposed to be based on property values! Rounding off the numbers a bit, shouldn't a house selling for $450,000 be taxed at ten times the amount of a house selling for $40,000? If North 43rd St. is paying $592, shouldn't South 43rd St. be paying $5920? Or if South 43rd is paying $1878, shouldn't North 43rd be paying $188? That's the BRT's part of the equation - to get the assessments accurate, actually based on the current sales prices for the locations. But then, City Council needs to change the rate. Under the Actual Value Initiative (the plan to set the assessments accurately), the idea was that the rate would go down, because the City wasn't trying to collect a huge new amount of taxes - it was only trying to get the taxes to be fair, so that the folks in Mantua would be paying at the same percentage of property value as the folks in University City. The end result was supposed to be revenue neutral - not a huge tax increase city wide. Some folks would pay less, and some folks would pay more, but all would be taxed fairly and the City's receivables would be the same. The South 43rd St. tax bill wouldn't go up to $5920 - though it would go up some, as would taxes in Society Hill, Chestnut Hill, Rittenhouse Square, etc. After a long, long lead-up, the BRT has been working on the valuation, but City Council has not been very brave about preparing to set a new rate. After all, the owners of the higher-priced properties squawk louder than the row house owners in Mantua, and Council members need to be concerned with their voters' reaction, worried about the next election. An organization called Philadelphia Forward ( http://www.philadelphiaforward.org) has been working on this issue for years already. They have the facts
Re: [UC] Taxation and the libraries
It's how the City will operate in the future. For that, we need fair and appropriate taxation. Those of us who can afford to pay more, will probably not be happy living in a city where we have spare cash, but some folks living nearby don't have libraries or other city services. We need to think long term here. Unfortunately, but realistically, taxes are a really important part of the equation. Bravo Melani!I haven't studied the merits of the local taxationplans and detailsas you have, butyou're points are right on the money. And what yousay about fairness in your closing is applicable to the regressive tax structure, which has been hurting our fellow Americans and our cityat an alarming rate over the past 30 years. Thanks for taking the time to organize these examples for us. I am not so sympathetic to the mayor as you. The process he engagedsuggests that he is not working for the fair , more egalitarian society, thatyouand I believe in. (You knowI reactstrongly tounfair undemocratic processes) This vision for society is very different than the vision of separating the UC district from the rest of our city. Great post. Glenn -Original Message- From: mlam...@aol.com Sent: Jan 3, 2009 1:57 PM To: UnivCity@list.purple.com, pf...@ccat.sas.upenn.edu Subject: [UC] Taxation and the libraries The fate of the 11 libraries is now before City Council. Mayor Nutter had to make some tough decisions to balance the City's budget, and the library closing choice seems to have been a particularly poor one. But, Mayor Nutter is not the villain here. Our city's tax structure is a more likely candidate for that role. It is totally out of whack and unreasonable in many ways. And City Council has a large role in our tax problems.My 2009 Philadelphia property tax bills came a few weeks ago, and when I look at them, the City's financial problems become somewhat more understandable. For my large stone house on 46th St. (counting the apartment in the rear, it has 14 rooms), my tax bill for 2009 is just $3306. Further, looking at the Board of Revision of Taxes (BRT) web site, I see that I've been paying that same amount since 2003 - if not earlier; the web site only goes back to 2003. Though of course, the City's costs have gone up every year.My sister in law who lives near Princeton (in Plainsboro, NJ) told me last week that the taxes on her much smaller 7 room house are about $12,000 a year. The City certainly needs to become more efficient and accountable in its spending. I have stories, and I'm sure many others on the listservs do also, about employees not doing their jobs and/or not being given a very rigorous workload. But in addition to demanding cost-cutting and streamlining from City departments, it may be time to face the likely reality that it's simply impossible for the City to function professionally and take care of its citizens' needs in 2009, on the amount of tax money it is currently billing.I've heard quiet rumblings about property and wage taxes throughout the library battle. Folks are beginning to feel that the City should be asking those of us who can afford it, to pay a little more. This sounds reasonable to me. But City Council would have to raise the tax rate, and expecting them to handle that quickly and conscientiously is perhaps unrealistic.Taking a step backward here, City Council and the BRT have joint responsibilities for taxation, and they have been grappling with - well actually, trying to avoid grappling with - another property tax situation for several years now: currently, our taxes aren't equal or fair, based on our property values, though the law requires them to be. Right now, neighborhoods with lower property values pay disproportionately high taxes, compared to neighborhoods with higher values - including University City. For example, in November, 2005, a buyer of mine bought a 3-story row house in Mantua, in the 700 block of NORTH 43rd St. (north of Lancaster) for $40,000. The block was shaky, and the house needed just about everything. The taxes for that house were $550. Checking up on it now, I see that the City has INCREASED that homeowner's taxes in 2007. Now he pays $592.Meanwhile, on the 400 block of SOUTH 43rd St., the BRT's records show a 3-story row house which sold 4 months later, in March, 2006, for $450,000. Its taxes also went up after the sale - from $1745 to $1878. Property taxes are supposed to be based on property values! Rounding off the numbers a bit, shouldn't a house selling for $450,000 be taxed at ten times the amount of a house selling for $40,000? If North 43rd St. is paying $592, shouldn't South 43rd St. be paying $5920? Or if South 43rd is paying $1878, shouldn't North 43rd be paying $188? That's the BRT's part of the equation - to get the assessments accurate, actually based on the current sales prices for the locations.But then, City Council needs to change the rate. Under the "Actual Value Initiative" (the plan to set the assessments
RE: [UC] Taxation and the libraries
Glenn, While the fact that the city needs additional revenue is obvious, any changes to the property tax structure have to be made with careful deliberation as to the consequences of dramatic increases. A property tax has the potential to be very oppressive, because it taxes an asset whose value exists only on paper until it's sold (called unrealized gain). Even the dreaded Internal Revenue Service does not tax an asset until it's sold; whether it's a home or a stock, the IRS bases its tax calculation on realized gain-- what the seller actually received at sale. The value of a stock isn't taxed every year that it's owned; it's taxed only when it's sold and when the seller has the money to pay the tax. But as long as an owner is living in a house, there is no relationship between the current value of the house and the owner's ability to pay an annual tax based on that current value. The result would be a lot of people losing their homes because the value went up on paper, creating a tax bill that they can't afford to pay. In the case of landlords, they'd pass the increase on to tenants, making rents exhorbitantly high. If the City wanted to have a property tax based on initial purchase price, with a small percentage increase each year thereafter, I would have no problem with that. Or based on square footage, lot size, whatever. Or if they wanted to raise the wage tax, I'd have no problem with that because that would be based on what I earn; I would have the money to pay it and it would be withheld so I would never even see the money. If the City wants to levy a tax on the gain when a house is sold, I have no problem with that. Same with a sales tax.There are many ways to tax based on money the taxpayer actually has.No one wants to be forced to sell their house because they can't afford to live in it anymore. Date: Sat, 3 Jan 2009 18:09:01 -0500From: glen...@earthlink.netto: mlam...@aol.com; univc...@list.purple.comsubject: Re: [UC] Taxation and the libraries It's how the City will operate in the future. For that, we need fair and appropriate taxation. Those of us who can afford to pay more, will probably not be happy living in a city where we have spare cash, but some folks living nearby don't have libraries or other city services. We need to think long term here. Unfortunately, but realistically, taxes are a really important part of the equation.Bravo Melani!I haven't studied the merits of the local taxation plans and details as you have, but you're points are right on the money. And what you say about fairness in your closing is applicable to the regressive tax structure, which has been hurting our fellow Americans and our city at an alarming rate over the past 30 years.Thanks for taking the time to organize these examples for us.I am not so sympathetic to the mayor as you. The process he engaged suggests that he is not working for the fair , more egalitarian society, that you and I believe in. (You know I react strongly to unfair undemocratic processes) This vision for society is very different than the vision of separating the UC district from the rest of our city. Great post.Glenn -Original Message- From: mlam...@aol.com Sent: Jan 3, 2009 1:57 PM To: UnivCity@list.purple.com, pf...@ccat.sas.upenn.edu Subject: [UC] Taxation and the libraries The fate of the 11 libraries is now before City Council. Mayor Nutter had to make some tough decisions to balance the City's budget, and the library closing choice seems to have been a particularly poor one. But, Mayor Nutter is not the villain here. Our city's tax structure is a more likely candidate for that role. It is totally out of whack and unreasonable in many ways. And City Council has a large role in our tax problems.My 2009 Philadelphia property tax bills came a few weeks ago, and when I look at them, the City's financial problems become somewhat more understandable. For my large stone house on 46th St. (counting the apartment in the rear, it has 14 rooms), my tax bill for 2009 is just $3306. Further, looking at the Board of Revision of Taxes (BRT) web site, I see that I've been paying that same amount since 2003 - if not earlier; the web site only goes back to 2003. Though of course, the City's costs have gone up every year.My sister in law who lives near Princeton (in Plainsboro, NJ) told me last week that the taxes on her much smaller 7 room house are about $12,000 a year. The City certainly needs to become more efficient and accountable in its spending. I have stories, and I'm sure many others on the listservs do also, about employees not doing their jobs and/or not being given a very rigorous workload. But in addition to demanding cost-cutting and streamlining from City departments, it may be time to face the likely reality that it's simply impossible for the City to function professionally and take care of its citizens' needs in 2009
