Due to property taxes, nobody in America really owns their own home. They're continually renting it from the government


Okay, so bear with me here. If the government forces everyone to pay a tax simply to own their own property that they paid for, and evicts them with a lien (and then goes on to sell that house), isn't that essentially the same as renting it from them (or some might say bribing the government not to confiscate your property)? Things like selling and evicting tenants are very much actions of a landlord/property owner.

I'd like to cite a few quotes that put this into words a little better than I can.

This is from "How I Found Freedom In an Unfree World" by Harry Browne (p.94). "[The government] gives you the one-sided choice of paying property taxes or losing your property. So, as economist F. A. Harper has pointed out, you don't actually own anything; you rent from the government. Sales between individuals are only exchanges of the privilege of renting property from the government. He who doesn't pay the annual rental is forcibly evicted from his property."

"Property taxes are a reality of life for almost every property owner in the world. In the Land of the Free, some homeowners pay five figure sums every year to live in modest homes in places like New York and Southern California.

Heck, people in New York are paying tens of thousands of dollars each year just to live in their own homes.

Going as far back as ancient Egypt, these mandatory tithes to the government are proof that you don’t really OWN your home or land. Rather, you are indebted to the government for the use of that land and, consequently, must pay.

Unlike many private sector services, you can’t simply buy a “lifetime membership” for annual multiple and call it a day. You must pay property taxes by the due date each and every year — and not a moment too soon." http://nomadcapitalist.com/2014/05/27/countries-with-no-property-taxes-really-home/

"If you don’t pay your property taxes in California, the delinquent amount (which includes taxes, interest, penalties, and costs resulting from the delinquency) becomes a lien on your home. Once the past-due amount becomes a lien, the tax collector can sell your home. Most tax-defaulted homes are sold at a public auction." http://www.nolo.com/legal-encyclopedia/what-happens-if-i-dont-pay-property-taxes-california.html

So reddit, change my view.

Where I got other information:

https://en.wikipedia.org/wiki/Property_tax

http://www.nolo.com/legal-encyclopedia/what-happens-if-i-dont-pay-property-taxes-california.html

Edit: This video pretty much sums up what I'm postulating here.

https://www.youtube.com/watch?v=QavCw40RY3w

Edit 2: My opinion on the matter has not really changed. Only the title is wrong by a technicality.

Edit 3: I understand that society as a whole could be worse off without property taxes, but that doesn't really make my statement untrue.

Edit 4: Being able to sell your house does not mean you entirely own it. As /u/AnarcoCapitalist put it, "Let's say I owned a house and allowed someone else to live in it for a monthly rent. Then that tenant was allowed to sell the house to another tenant for its value at the time. But I as the true owner will always be taking my rent money from whatever tenant lives there."

It's just how the tenant/landlord contract was set up.


  • 🤔Changed Author's View
    3 years ago

    What does mean for something to be your property? Like does the house know you own it?

    For the vast majority of people, owning somethings means having title or a claim to it that can be enforced through the legal system. The legal system is not free to run; you have to pay taxes in order for it to work, but that's not renting: that's the definition of ownership.

    What you seem to think ownership means is to have control of something that is protected not by the legal system but your own power. However, that concept is what is referred to as sovereignty, not ownership. And yes, usually only governments are considered sovereign, since most individuals don't have or particularly want armies.

    Edit: Since people keep raising it, I mean that ownership is a legal claim, not that all legal claims are ownership. You can obviously have other legal claims due to contracts including rental contracts, damages, etc. All bears are mammals, not all mammals are bears.

    • 🎤Author
      3 years ago

      sovereignty

      ∆ I think this is definitely what I thought ownership meant. I was unaware of the specific legal definition of it.

  • 🤔Changed Author's View
    3 years ago

    This seems like pretty much a semantics question. What does it mean to "really own" something?

    In the U.S. and other common law countries, it means holding it in Fee Simple. So yes, you "really own" it... it's just that "own" doesn't mean what you think that it should mean.

    You're not a slave because of income taxes, that's just demagoguery. And similarly, you don't "not own" your house because there are taxes on it. That's also just demagoguery.

    You don't "not own" your car because you have to pay to register it every year, either.

    "Own" simply doesn't mean "don't owe taxes on".

    • 🎤Author
      3 years ago

      I suppose you could frame it that way, but I don't think that's the whole question. The way you've explained this doesn't really examine the moral aspects of that taxation. What right does the government have to demand money from me, on penalty of confiscating my property or imprisoning me, simply for the "privilege" of being able to keep what was already mine? In my mind, that's akin to extortion, and entirely different than say, the way that I own my watch. Nobody demands payment from me for the privilege of keeping my own watch. It's my property. What I'm getting at here is that if you have to keep paying somebody to use/keep something, you don't really own it, in the same way that somebody renting an apartment does not own that apartment. The difference in that example, though, is that the agreement is entered into voluntarily. Sure, I could get into some trouble if I stopped paying rent, but I chose to make that commitment in the first place. Not so with property taxes.

    • 3 years ago

      Someone who rents an apartment does not any of the traditional rights of ownership, such as being able to sell it.

      Even if taxes are extortion, that doesn't change ownership. If someone on the street comes up to you and says "give me $10 or I'll take your car" that doesn't mean that you don't own the car.

      Here's a perfectly unexceptional definition of "ownership" from businessdictionary.com that is very similar to most technical definitions of the term that I've seen:

      The ultimate and exclusive right conferred by a lawful claim or title, and subject to certain restrictions to enjoy, occupy, possess, rent, sell, use, give away, or even destroy an item of property.

      Notice how it doesn't say anything at all about "not being required to pay taxes on it"?

      It's also a pretty weird way of looking at things, because if you owe back taxes, generally you'll have a lien put on it, just like any other debt. The only way the property will be taken is just like any other judgement to get you to pay a debt.

    • 🎤Author
      3 years ago

      I do see what you're saying with regards to being able to sell it. But whoever you sell it to has to pay property taxes as well. So you're really just "exchanging the privilege of renting property from the government," as Harry Browne puts it.

      It makes sense that that definition would not mention taxation because in the world of business and law, taxes are accepted as part of life (perhaps as a "necessary evil").

      Merriam-Webster defines rent as "a tenant's regular payment to a landlord for the use of property or land." That is the very definition of the nature of the relationship between somebody who "owns" their home and the government, regardless of whether or not you have the right to sell it, because you are really just selling the privilege of renting that property to another tenant.

    • 3 years ago

      Really, having to pay money to use something is not a generally accepted definition of "renting" vs. "owning". Ownership is a set of rights (and responsibilities) in relation to a thing, nothing more and nothing less.

      I mean, sure, you can use your own idiosyncratic definition of "ownership" if you want. That's your privilege. It just doesn't meet any of the common definitions used by most people, and they aren't going to understand what you mean. That's a poor use of language.

    • 🎤Author
      3 years ago

      I recognize that you are correct in regards to the legal definition. Perhaps ownership was not the best word for the concept I'm talking about. A guy in another comment mentioned the legal concept of allod, and this is what I'm referring to:

      From Wikipedia: "The allodial landowner (allodiary) had full ownership and right of alienation.

      This form of ownership meant that the landowner owed no feudal duties to any other person. An allod could be inherited freely according to the usual law of the land. To begin with, the income from allodial estates was not even liable for taxes..."

      https://en.wikipedia.org/wiki/Allod

  • 🤔Changed Author's View
    3 years ago

    That's an interesting perspective. I don't so much see it as renting from the government. I see it as an arbitrary metric the government can track easily in order to determine they can steal from you by force. Instead of a leaser/leasee situation I see the government more saying, "Listen, if you can afford a house worth X, that means you have money. That means you make money. That means you're a capable human being. That means you have the ability to pay us because you have money. That means you're going to pay us what we think is fair." I see it more of Yakuza type of affair where they demand protection money from you, or else they'll destroy you.

    At worst it's like a Condo and the government is the home owners association. You have to follow the rules or you get fined. If you don't follow the rules enough they'll force you out and give you some compensation.

    I guess it really comes down to different levels of ownership. In a rental everything is owned by a land lord and the land lord is required to fix the problems that weren't created due to the leasees incompetence. A condo you own the walls but you don't own the land, you pay a "rent" on the land and the HOA will fix something like your septic, but they're not going to fix your faucet. Owning a house means you have to do almost everything yourself.

    • 🎤Author
      3 years ago

      Yakuza/organized crime is a great comparison to what it is the government does. Essentially forcing you, under duress, to pay a fee for your own "protection," while the only one they really need protection from is the predatory entity demanding money or else.

  • 🤔Changed Author's View
    3 years ago

    You follow this line of reasoning and there is very little you own: your job (income taxes); your car (registration fee); your business, stocks (capital gains tax), your retail purchases (sales tax)...

    It's just not useful.

    • 🎤Author
      3 years ago

      I wouldn't say it's not useful. I think it's entirely useful for examining our society from another perspective. I agree with you about ownership of your car especially, because it's a physical thing. The difference is with things like retail purchases is that that is a one-off thing. You don't have to continually pay the government for the privilege of, say, owning a refrigerator. Why should you have to do so for owning a house?

  • 🤔Changed Author's View
    3 years ago

    You are mainly correct however Allodial Titles do exist still in Nevada so some people actually and fully own their property in the United States.

    • 🎤Author
      3 years ago

      I was unaware of this, and because it makes my title factually wrong you have technically changed my view. lol

    • 3 years ago

      Technical victories are so sweet!

  • 3 years ago

    Slightly off-topic, but it sounds like you're barking up this tree: check out interviews or writing from the economist David Friedman for some ideas about how local services (roads, police, etc.) could theoretically be provided by a competitive market-based system instead of a municipal government.

    • 🎤Author
      3 years ago

      I will, thanks

  • 3 years ago

    If two different people say that they own the same piece of property, how do you settle that dispute?

    In the U.S. and any common law country, it's settled by a series of rules, that depends on the ruling of a court system, which looks to the county recorder's records. This prevents some of the following examples:

    • Owen sells his land to Alice. Then, because nobody else knows that Owen already sold it, he tries to sell it again to Bob. Bob has no idea that Owen doesn't actually hold title anymore, so he's suckered out of his purchase price when Alice shows up and she has superior title.
    • Alex buys some land, but he finances it through a loan from Bank. Bank would not have engaged in this transaction without assurance that it has the ability to seize the land if Alex fails to repay the loan. Without a centralized recording system and a court system, mortgages wouldn't really work, and nobody would have the trust necessary for ownership of land to work.
    • Larry the landlord rents out his land to Terry the tenant. Larry needs the assurance that he can reclaim the land not in his possession. Otherwise, he wouldn't willingly give up possession to a renter. In other words, without a recording system and court system (and a sheriff who enforces the court's rulings), rentals wouldn't really work except with really powerful landlords.

    So who pays for the whole system of recording deeds (and liens and easements and restrictive covenants)? What about the court system? Who enforces court judgments? That whole apparatus is the entire original reason for the state, so it's only fair that land owners pay into the system that allows land ownership to even occur.

    Otherwise, it degenerates into "might makes right," and "whoever possesses the land owns it."

    • 3 years ago

      Well, FWIW, when we talk about home ownership, it means the right to use it and pass it on to your heirs. In the US, the government actually does have ultimate ownership of your property, unless you have an allodial title, which is pretty rare. That's why the government has the right to eminent domain.

      However, for all practical purposes, you do own it.

      • 🎤Author
        3 years ago

        Interesting, I didn't know that about eminent domain. Thanks

    • 3 years ago

      Don't forget the fact that the people can vote to raise or lower those taxes, or eliminate them entirely, if they aren't necessary. There's nothing preventing that since property taxes are state and local issues, as I understand it. "The Government" is us, and the people who run the government pay the same taxes.

      Tax collection at that level raises lots of interesting issues, of course. In California, when you buy a home you pay tax based on the assessed value (typically based on the sale price in most cases) , BUT the taxes do not track market rates going forward. So you lock in a low rate by staying in your home. New homeowners can pay 10x what their elderly neighbors pay, independent of current property value, income, wealth, etc. It's a silly situation designed to protect the elderly, but it's completely unfair for new home owners. And businesses are able to lock in those low low rates as well, depriving the city and state of revenue and revenue growth over time.

      That said, there's nothing preventing the people from voting to eliminate all property taxes, and decide to collect taxes on income, sales, or anything else they deem constitutional.

      • 3 years ago

        Nah, you're just paying the government back for having stolen the land in the first place.

        • 🎤Author
          3 years ago

          Whatever edgy point you're trying to make, I'm not seeing it.

      • 3 years ago

        I am a voting member of the US meaning that I am in fact a partial owner of the government. If the government is the true owner of my property and I am an owner of the government, that means I am still the true owner of my property.

        • 🎤Author
          3 years ago

          That's an interesting perspective. In what sense do you own the government? Wouldn't that have the connotation that you can that you could fundamentally change it? Do away with it entirely?

        • 3 years ago

          In what sense do you own the government? Wouldn't that have the connotation that you can that you could fundamentally change it?

          I can vote on referendums. I have representatives that I have participating in selecting that listen to my opinions. If I wish to enact a change in the government, all I need to do is get enough people to agree with me that the change should happen and it does. In a very real way, I help decide how the money gathered from the taxes I pay is spent.

          The idea that the power of government is derived from the consent of the governed is an notion that dates back hundreds of years. The United States was explicitly founded on this principle and while it may be possible to do it better, I do not think it can be denyed that the US continues to use this principle.

          Do away with it entirely?

          I cannot think of any reason that I would wish to do this. If I were to remove the current government, all that would happen is the power vacuum would allow others to attempt to seize control and it is most likely that these new people would be less swayed by the opinions of the masses than the current system.

      • 3 years ago

        If I own a horse that I board at a stable and pay for the care and food and maintenance do I suddenly not own the horse?

        Taxes are maintenance fees to ensure the public roads and utilities and other stuff include your home.

        • 3 years ago

          People who own a house pay towards communal roads etc. I'm fine with you not wanting that, if you are okay with your roads all being privately owned and having a toll gate at every intersection.

          • 3 years ago

            The two things are unrelated. The government is merely mandated by the people in a democracy. The government is mandated to do several things, among others levy taxes, among others on property; the people, through the government, decided that it would be wise to issue a fine for those who don't pay their taxes.

            For property taxes, that fine takes the form of a claim on that property, and therefore eventually dispossession, but it could take other forms, like for example being submerged in spaghetti sauce, your name being changed to "Mr. Cheapskate" or being jailed. As you can see, there is no necessary relation between paying taxes and your possession of the land or house. Whereas that is essential for a rental contract, as is illustrated by the fact that the renters property right on the house predates the contract, whereas the government's claim on your house only comes into existence after not paying the tax.

            To make the distinction entirely clear, the government does own actualy property that it actually rents out, and that's quite a different procedure. For example, a government cannot decide to stop "renting" to you and "rent" your house to someone else, simply because they do not have the ownership and cannot rent it out.

            • 🎤Author
              3 years ago
            • 3 years ago

              If they already owned it, they would just send you a notice that your rental contract would not be renewed, and would not owe you compensation.. Your landlord can end your contract without compensation, but cannot seize back his property before his contractual obligations end.

              Similarly, the governement can conscript you. That doesn't mean you are a slave.

          • 3 years ago

            I agree with you largely about individual ownership, however because we all have a stake in the nation, government and society, the part that we don't own as an individual, we own as a collective.

            I also want you to think about what would happen to the price of land if there were no maintenance cost involved with the monopolization of land.

            Because it is fundamentally inelastic in supply, there is only going to be as much land as exists right now. The price of land can just keep escalating if people have no pressure to utilise or sell it. They could just hold vast swathes of land and wait on it to gain capital value instead of utilising it or letting others use it more productively. This leads to what we are seeing in many parts of the world where empty lots skyrocket in value, forcing many out of the cities they were raised in.

            A solid Land Value Tax is a brilliant solution to many of the world's problems as it encourages and incentivise productive use or sale of land. It's a progressive tax because wealthy people own most of the land. It reduces rents because of the increased pressure to be productive encourages development on the land that expands the potential tenancy supply. I suggest reading the Wikipedia article on the topic. It may mean that you never truly own the land but rather every citizen has a stake in it. So maybe in effect we all own the land.

            I am against a property tax that includes being levied against capital improvements like buildings though.

            • 3 years ago

              Rather than convince you that the government isn't the true owner of your land, I'm going to argue that that is the way it rightfully ought to be, even under a relatively deontological, libertarian ethical system.

              Where does ownership of property come from? Generally, we say that people own themselves, their bodies, labor, and intellect, plus anything they create with their labor. From there they can freely agree to trade with other people to make both sides better off.

              But nobody creates land (except the Dutch but let's ignore that for now): land is just there. So nobody can own land. You can't buy it from anyone, because nobody can own it originally to have the right to sell it. But we need some way of deciding who has the right to decide what's done with a given piece of land. So we say that land is owned in common by the entire body of citizens (under the management of the government, which manages the affairs of the entire body of citizens in all cases where they act collectively), but rented out at a fair price to a person or corporation in particular, who is allowed to use the land for whatever they deem most profitable as long as they pay the fees to the rightful owners (i.e. everyone).

              There's also an argument that this is a very efficient way of doing things from a utilitarian standpoint, but I have to go to work so that will have to wait.

              • 3 years ago

                You forgot to mention permits to change your property. In order to make several types of changes to your so called property to need permission form the government to do so. I for example want to put a shed at the end of my drive way, and the government will not let me put any building in front of my house.

                Who makes the of rules of the property?

                • 3 years ago

                  You can't sell a home you are renting.

                  • 3 years ago

                    With your analogy, I'd say it's less like paying rent and more like paying a condo fee.

                    All types of taxes have their faults, but property tax is a more progressive tax than a sales tax or an income tax.

                    • 3 years ago

                      The property tax can be thought of not as a way of paying for the land so much as paying for the services you get from owning the land: police, fire dept, education, anything you can think of really.

                      • 3 years ago

                        Well it's really just a question of semantics, which isn't that useful to argue about in my opinion. As other people have pointed out in this thread, the way you're using the term "own" conflicts with the standard definition, so you're technically incorrect.

                        Let's say that I think tomatoes are vegetables. I start a thread here to that effect, saying that tomatoes don't taste like fruits to me, most people would classify them as vegetables without seeing the technical definition, they are used in a context similar to other vegetables while cooking, etc etc. I've made some good points, I've brought up the interesting topic that tomatoes seem like vegetables and share many similarities to other vegetables, but at the end of the day I'm still wrong. Tomatoes are fruits because they are the seed-containing product of a plant and that is how we have chosen to define the word fruit.

                        You can have a discussion about the powers of the government over people's daily lives that they might not regularly consider without the added sensationalism of saying we don't own our own houses.

                        • 3 years ago

                          You are basically saying that liberalism and feudalism are the same thing. Which is correct, but adds another dimension to the discussion.

                          • 3 years ago

                            There is a big difference with regulating land and ownership. There is a finite amount of land and it is all claimed. Without enforcing property taxes, theoretically a person could die and nobody could ever do anything with the land. Like ever.

                            A lien is a public document saying you are in tax debt. You can hold a lien balance for decades on your house and the only thing that happens is that if you sell your house the government takes the money owed out of your sale.

                            Can you get your house confiscated for not paying property taxes? Yes. but if you owe 1 dollar and your house is worth 1 million dollars the government would have to give you $999,999 back after selling your house. It would cost them far more to sell the house so they just let you owe them the $1. If you never pay taxes for 30 years and owe $300,000 yes they will sell your house and give you the difference minus expenses but more likely, if you want to keep the house you will take a second mortgage for $1 or borrow from the equity of your home because in the 5 year minimum it takes before action can be taken, your house raised in value at a rate higher than property tax so you can borrow from this added value of the home to pay your debt.

                            People who forfeit will certainly NEVER ONLY owe money to the government. They likely owe tens of thousands of dollars in back mortgage and in credit debt and have zero money in their bank. The government then uses liens to get THEIR SHARE of the debt.

                            • 3 years ago

                              You own your land, but because of the necessity of total participation within a country you are forced to buy into sevices that protect your land (police, military, courts...), that provide infrastructure to and for your land....

                              • 3 years ago

                                Taxes are payment for the benefits gained by living under the government. Property taxes generally pay for things in the area like public schools.

                                Sure, they don't need to use property taxes, but then some other tax will need to be higher to pay for those things.

                                The fact that you can sell your home to someone else means that you own it. The fact that the government defends those property rights so that others can't simply take it from you means you own it. The fact that you pay taxes does not mean that you don't own it.

                                • 3 years ago

                                  Could you not, in theory, just move the house elsewhere? I mean, the structure is what you "own", if not the land (as it is subject to government influence via property tax).

                                  • 3 years ago

                                    Taxes are the entrance fee to an orderly, efficient, civil and just society. If you want to stop paying taxes, be prepared to stop enjoying any of the benefits.

                                    And if you want to see a society without taxes, just look at South-East Somalia.

                                    • 3 years ago

                                      The people are the govt. They are not seperate. The government and the people are not at odds with one another they are the exact same thing.