Will North Dakota be the First to Eliminate Property Tax?

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Voters in North Dakota will decide tomorrow whether or not to abolish property taxes in their state.  If the ballot measure is approved, North Dakota would be the only state in the nation to extend full and complete tax relief to property owners.

Many of those who support the ballot measure view property tax as a type of encumbrance on their property that limits ownership rights.  They believe if you’ve paid in full, then you own the property, and there should be nothing in the present or the future that would threaten that ownership — not even failure to pay a tax associated with that property.  Furthermore, North Dakota is one of the few states not feeling the effects of the recession, and proponents feel confident that the state will not miss the $812 million in property tax revenue.

But the opposition has been well-funded and the measure is not expected to pass.  The arguments against the ban on the state’s property tax really come down to fear of change.  How would the state make up for the lost revenue?  What effect would this have on myriad other state laws and regulations that reference the hunred-year-old property tax law?  It is irresponsible; somewhat akin to quitting your well-paying job as soon as you get ahead a little.  But maybe voter trepidation will save North Dakota from falling into debt like so many other states.

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A Tax Even the Wealthy Can’t Pay

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Greek parliament approved the new controversial property tax Tuesday evening. The hope is that this will increase the country’s chances of obtaining further bail-out money, precisely 8 billion euros, and keep the country solvent. However, the government has to be willing to exchange solvency for turmoil and unrest. Experts believe this is the wrong approach, and what the people of Greece really need is tax relief and drastic trimming of the public sector.

The property tax will be devastating to normal citizens; many will not be able to pay. However, even more telling is the effect it may have on wealthy government officials. If they can’t pay it, then it’s difficult to tell who can.

I believe that the tax limits of Greek society have been exhausted. I would say they have been exhausted for some time. . . . The property I own was purely obtained through inheritance. Personally, I have never bought anything. . . .  I will be obliged to sell some of these properties. There is nothing else I can do.

~ Theodoros Pangalos, Deputy Prime Minister of Greece

See full story here.

Greece Increases Already Burdensome Property Tax

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The new property tax announced by the finance ministry of Greece over the weekend was like a knife in the chest of struggling homeowners.  Now, with tax relief nowhere in sight, the government is doing a little knife twisting.

Just a few days after the tax was announced at the rate of 10 euros per square meter, the government further increased the tax rate to 16 euros. And the nifty thing about having the tax paid through the property owner’s power bill is, if the tax is not paid, then the lights get switched off.  Full story here.

New Greek Property Tax to be Collected by Power Company

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Just a quick update on Greece’s financial crisis as it is related to taxes this time.  On Sunday the government of Greece approved a new property tax aimed at quickly raising 2 billion euros to help plug some serious budget holes.  So the tax collectors got right to work on this, right?  Nope.  In fact, tax offices around the country were shut down today as workers protested pay cuts.  However, even if tax collectors never go back to work, property owners should not expect any automatic tax relief because the new tax is to be collected through electricity bills.

It’s an open question whether or not the tax will actually be collected amid union protests and the country’s rampant tax evasion.  The government needs to get over its credibility issues by cracking down on prominent individuals and businesses that believe they are above the law and immune to taxation.  Lasting solutions for this country’s economic troubles probably involve reducing the public sector and moving towards privatization, whereas the new property tax appears to be just a band-aid.  Worst of all, experts believe that the new property tax will only worsen the country’s recession.