House Rich, Dirt Poor

New Orleans    During farm crises, as prices get lower for crops and property taxes get higher, the old saying in rural areas about being “land rich, and dirt poor” comes to mind, especially in the states that have property taxes.  Talking to a relative about his aging father’s house, he mentioned that his son would love to have the house but couldn’t afford the likely $30,000 in carrying costs to hold onto the property in insurance, maintenance and property taxes.  Talking to a fair housing specialist recently about changing neighborhood demographics triggered by natural and speculative gentrification, it was hard to escape the fact that rising property taxes were making it harder for older, especially fixed income families, to avoid trying to cash in as the market rises, because they have little choice when their combined taxes and insurance have them against the wall, and they’ve become “house rich and dirt poor” as well.

How can we continue to avoid the regressive nature of property taxes as an income source for local governments when it so disproportionately burdens lower income and working families and exacerbates the gap between the real rich and the rest of us?

So, first things, first.  A progressive tax is one that equally distributes the burden based on income, like for example the income tax, not because it is a fixed percentage, but because it is based on ability to pay.  The wealth tax being promoted by some politicians has this notion at its heart.  A regressive tax is set at a flat rate and therefore takes a larger bite out of lower income or fixed income families than it does for the rich.  The best examples are sales taxes, especially when they do not exempt food and medicine, classic ACORN campaigns I might add, and property taxes, because these taxes do not make any allowances for income or the ability to pay.

Looking at property taxes, if they increase willy-nilly without any exemptions or caps for fixed income and lower income families, as gentrification raises its ugly head, there’s no way a family can survive without serious bucks.  Gentrifiers and developers are callous about this issue.  They will rationalize that the lower income family made a couple of dollars when forced to sell and will be better off somewhere else without taking into account their love and seniority for their community, travel distances, and the likely lack of affordability of alternative housing for them when they are dislocated, much less the value of diversity in the urban scene.  All of which will create cities of the rich, if there are not diverse sources of city income and hard and fast public policies to allow everyone to be able to live and thrive in the city.

Inability to grow food on farms will get someone’s attention someday.  Maybe even the problem of boomers and their families not being able to save their homes because of the burdens of taxes will be noticed eventually.  We might hope change will be triggered as well by displacement due to gentrification in cities that is happening throughout the world now.

Hope is not a plan, so sadly it may be too late for most people.

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