Category: Economics


Do you realize that, because of property taxes, you can NEVER own your property?
If you think you can, try not paying those taxes when you’ve finished paying off your house.

Think of it this way: you own your television, right? Would you accept paying taxes on it, that must be paid FOREVER, such that, if you didn’t, the government would come to your house and confiscate it? Would you, in this case, agree that you don’t really own your television, but are allowed to keep it by the government? What if we added all your possessions? Clothes taxes, jewelry taxes, furniture taxes, and dish taxes? Would you be able to OWN any of those things if, for any reason, you fail to pay the taxes that will never end the government comes to collect them?

Property taxes as a form of tax revenue is evil. It defies the very concept of the natural right to OWN property.

Sales taxes can be used for the same purposes. It’s a one time thing, it’s CLEAR who pays what (it’s listed right on the receipt!), it’s perfect because those who spend more will automatically pay more…but at the same RATE.

One thing that is so sick about property taxes is that not everyone sees them. It’s like they’re hidden away, and not everyone is shown the evil. So, we all go along, thinking everything is fine, when people’s homes are being held hostage by the government, if we don’t pay them the ransom amount every year, which they can raise at whim.

To put this another way: when Jefferson was president of the U.S., the Barbary Pirates exacted tribute from America to keep from attacking shipping vessels. We went to WAR over this…and now, we just sit here, paying tribute to the government.

I just made this comment on a Facebook thread, but I’ll be darned if it’s not a good post, so I modified it a bit (maybe a lot to make it succinct) such that it worked as a blog, and voilà! Enjoy.

My main beef with property taxes is that you never actually OWN the land. If you think having the title and no leans makes you the owner, try not paying taxes for a year. They will take “your” land. Imagine if they did that with ANY other property in your home. 

Imagine a TV tax that, if you didn’t pay, they’d come take your TV. Now imagine it for your other items like your iPhone…or stove…or furniture. You already bought it, it’s in your home, but you keep having to say taxes on it, FOREVER.

The only other time, of which I am aware, that your so-called property is taxed forever is in business. If you have inventory in your store, it gets taxed year after year…forever. It is NEVER yours. It’s a double whammy because, guess what? The land for businesses also get taxed forever. So, you never own your business or your inventory. Never. It doesn’t even end when you die. They just tax the next owner…forever and ever and ever.

With sales taxes, it’s over once you acquire the item. Done and done. It’s your private property and no government entity has sway over it.

With homes, what is supposed to be your place of solace, your palace, is under constant threat of being swiped out from under you.

I’m not saying sales tax is a magical and lovely thing. I’m just saying that, once you pay it, it’s over. It’s not something that your kids will have to pay, even after you die and leave your house to them. This is what people mean when they say that freedoms are eroding. I have a RIGHT to private property. Since when does that right end when I walk into my home? Oh, yeah, since the statists got elected into office by people wooed by their lofty rhetoric.

We need to quit doing that. Seriously. Stop it. Ignore the R and the D. Vet candidates based on how well they speak “freedom.” Know where you stand.

 

 

 

***This post has been updated to add the part about business taxes***

In Part II, we ended with me promising to discuss inspection results, pools, and closing costs. Yay!

If there is a problem with the house, now is the time to address it. Your realtor can write an addendum to the offer contract and things can be done a few ways. If you have a VA loan, the addendum will require that the sellers fix the issue(s) before the funding can be given the green light. Depending on your loan type, you might be able to borrow more than the agreed price in order to fund the repairs after closing, or you can buy the house “as is.” If you want to buy a house with foundation and/or roof problems, you’ll likely just need to cough up the entire purchase price in cash. If you are in this position, more power to you!!

At this point, the seller can tell you to take a long walk off a short pier, or they can fix the problem(s). We had an offer on a house that needed about $2,000 of really serious repairs to even be ready to sell. That didn’t include all the cosmetic issues and other problems in the house. Once moved in, IF the seller fixed the major issues, we would have had to replace a sink, re-caulk the master shower, buy new faucets for the master bath, fix or replace some interior doors, etc., etc., etc. We didn’t ask the guy to fix any of that. Just the real necessities, and he balked. Ah, well. I mean, if you are going to put your house on the market, make sure the roof doesn’t leak, the A/C has been serviced (ever), and the drains actually drain. Just throwing that out there…

If the seller decides to cancel the contract because of the request for repairs, you’re out that house. Yup, it can end that quickly. It’s like dancing a really tense tango where you’re not sure if, when your partner dips you, they’ll pull you back up. “Oops! Didn’t mean to drop you, there…” But, I’m assured that most sellers are not interested in losing a sale…except for that one guy.

Anyhoo, let’s presume there is a problem (there will be), that y’all come to an agreement on how to fix it, and things move forward. Now is the time for paperwork! They do things online, for the most part, now, and that’s way cool. My dad, the last house he bought, printed out all the documents to read. He’s old school like that. The point is, the papers, by the end, were literally 3 inches tall when stacked. It’s like reading a bill proposed by Congress, only in this contract, you might get something worthwhile for your money and this agreement is voluntary. Okay! Let’s discuss pools.

If there is a pool on the property, the kids will go nuts. I mean, jumping up and down with glee. And, this is because they don’t have to shell out the hundreds of dollars each month to run the thing (write a check). Nor do they have to pay for the separate pool inspection before closing (write a check). Nor do they have to pay for the repairs on said pool (write a check). After looking for houses, I decided that maybe, just maybe, I’d cross “pool” of the “must have” list and transfer it directly to “reject house upon knowledge of the existence of a pool on the property.” But, then again, none of the houses we looked at seriously had pools, so I was not faced with battling against the long faces of the children upon learning we might not get a house due to the presence of a pool. I may have buckled. But, we’ll never know, so let’s move onto closing costs.

Alright, people, we are getting close to the end of the process. You’ve signed 4,000,000,000 pieces of paperwork, written about 85 checks. and it’s time to make things official, make sure your bank has funded their part of the venture, and you are just about ready to take possession of the house. EXCITING!! What is the one thing you want to do when you are getting ready to get a house? YES!!! Write more checks!

Get that checkbook out and get that comfy pen handy because you’ll be looking at papers that show you thousands of dollars worth of closing costs (fee, charges, surcharges, taxes, escrow account deposits, etc.). Oh, man. You’ll have SO MUCH FUN!!

Okay, maybe not fun, but it’s what you gotta do to get the house. If you have this money, great. If you have a loving parent(s) who is interested in giving you the mother of all housewarming gifts by paying the down payment and/or closing costs, that’s awesome, too. I pray I am able to do that for each of my three kids. Aim high, I always say!

Now, you’ve done the final walk through, written all the checks, and your loan is funded. You get the keys, and look lovingly at your new house. Imagine where you’re going to put everything and which rooms each of the kids get. Then, call the HVAC people because I think your A/C just went out.

 

 

***The craziest thing about the check writing is, while it seems old-fashioned to do so, most items along the way are not able to be paid by credit card, or even debit card. You pay with check or cash. Go figure, in this time of electronic everything else, house buying gets left in the dark ages.***

Last time, we found out that you will either get a home that is totally run down, but in your price range except for the massive overhaul you’ll have to do to make that house a home, or you’ll end up buying a house that is more expensive than you are comfortable with.

You can rejoice, though, because you can QUIT LOOKING FOR HOUSES!! That frees up about 10 hours a day for you to start writing checks! Yay! As it turns out, even if the house you are going to buy is too expensive, revel in the fact that you won’t have to sanitize the entire thing just to move in. It’s a give and take.

Now comes the real craziness that no one prepares a first-time home buyer for. I thought that I had read up on what needed to be done, what would be expected, and such, but there wasn’t really a solid, to-the-point kind of guide, save a Dave Barry book that I thought couldn’t be true because he’s a humorist. He jokes about writing so many checks that they litter the side-walks. That’s crazy. There are only enough to cover the dining room table.

Okay, okay, maybe not that many, but there are checks to be written, and right away.

The first and more important thing that you have to realize about real estate is that you have to enter into a binding contract when you start haggling about the cost of the home. Either side can negate the contract within the first 10-days, presuming you don’t have a dolt for a realtor, but it will cost you money to break the contract within this period of time, even if you back out because the house is lemon and you didn’t find it out until you got an inspection.

The contract thing was a little dizzying, at first. I swear, the legalese sound like this, “THIS IS A LEGALLY BINDING CONTRACT. IF YOU SO MUCH A STEP OUT OF LINE, YOUR SOUL WILL BE BANISHED TO EVERLASTING DARKNESS!” when it, in reality, is basically saying, “Don’t be a dirt-bag. If you say you’ll buy the house, y’all agree on a price, and you make a deal, then, follow through. Don’t say you’ll buy the house and then back out at the last second because you have cold feet or find another house you like better. These people have taken their house off the market for you, and if you get flighty, they might have missed out on a real buyer.” Makes sense, but it’s still a little intimidating.

My beloved realtor, Willita Thompson, was quite patient with us about being so ill-informed, but she deals with this all the time, and so she just stated, as a mater-of-fact, that we needed this money…today. Well, it’s not just her! Everyone else (including former real estate agents) among our friends never once thought to sit us down and say, “Now, you know, you’re going to have to have thousands of dollars to spend to be able to get a loan, right?” If you’ve never bought a house, you’re thinking, “Wait…thousands?” If you’ve bought a house, you’re nodding your head, knowingly.

I’m presuming that people think we know this because they’d like to think that we’d be well-informed, and on the ball. Well, they’d be WRONG. But, that’s another blog, altogether. I mean, NOW we are. But, before we started this whole thing? Not so much.

If you are in that same boat that we were in, after reading this series of blogs, you’ll be all set! So, if you’ve never bought a house before, you’re wondering what option money is. Well, you are asking the seller to take their house off the market while you haggle. This costs you, the buyer, money…usually around $100. Write a check.

Then, you have to prove that you are not some joker that is just being a pest and really has no intention of buying the house. This is called “earnest money,” a befitting name and is around $1,000. Write a check.

Presuming the seller doesn’t laugh your offer into the trash, you have a deal! But, wait, there’s more! You really ought to get the house inspected. Just do it. It’ll cost you about $500, depending on where you are located. Write a check.

Next time: Inspection findings, pools, and closing costs!

 

For many years my husband was in the Air Force and we lived on base. Before that, we were just young, stupid kids who rented and never thought past our 6 month lease. Ah, yes. Back when we “knew everything.”

Then, he separated from the Air Force and, after a time, we were faced with the *exciting* prospect of buying a house. Sounds fun and easy, right?! WRONG. It’s the most perplexing thing I’ve done…and I’ve learned French and successfully filled out insurance paperwork.

First, you have to find a realtor. Thankfully, though I hear this can be arduous, in and of itself, I knew one who is trustworthy and good at her job. I feel like we won the lottery, we are so happy to have a competent realtor. If you are in the San Antonio, Texas area and looking to buy or sell a house. comment below and I’ll give you her name and number. Okay, first job done…now, we just find a house, right?

No. First, you have to decide what kind of house you want and where you want it to be located. Think of the price you can afford to pay, the layout you want, the amenities you must have, and extras you’d like. Take some time, write them all down, and make sure you know exactly what you want.

Now, take that list, crumple it up, and throw it away. Don’t be ridiculous. You think you’ll get any of those things?? Nope. The next step is to  search for houses in your price range, in areas with reasonable property taxes, and maybe a few of the items on your list. You’ll need about 10 hours a day for a few weeks to really get your spirit broken. Once you’ve snapped, give in to reality.

You’re going to find a house that is more expensive than you’d ever expect, in a decent (but not great) neighborhood, and you’ll deal with that galley kitchen, no fireplace, and small rooms with no closets. No, in fact, by the time you find a house, any house, that isn’t currently condemned, you’ll be happier than you ever thought possible.

Then, just when you least expect it, you’ll find a great house, just in the location you wanted, with all the things you wanted…and it will have sold two days ago. So, you’ll go back to putting an offer on the house you are going to buy and the real insanity begins.

Next up: Paperwork and check writing…you’ll be an expert in both!

 

To clarify, we don’t need uniform taxes in the essence of taxing uniforms, but by the way of making them equally applicable to everyone. Here is a brilliant synopsis by my friend Rex about how the current high tax rates on corporations really plays out. Hint: it’s not hurting “the rich.”

“Big Corporations have a huge advantage in raising capital because they can take people’s money and give them limited liability. Big corporation executives have huge advantages in tax rates because they can use incentive stock options to defer taxation on capital and tax most of their salaries at capital gains rates instead of ordinary income rates.

If a small corporation borrows from the bank, the shareholder will have to sign a personal guarantee, so the small corporation guy usually doesn’t walk away free when something fails like the big corporation guy. The preferred way for small corporations to raise capital is through prior earnings, but if the government takes half their earnings in taxes, or more, it gets very difficult for the small corporation to control its own destiny without having to resort to banks, brokers, underwriters, public shareholders, and everything else that will limit the way they can use their ideas, which they are usually pretty attached to.

Big income taxes, for those reasons, and others, are not a tax on being rich, but on getting rich. The middle class doesn’t want to stay in the middle class, and that’s the source of a lot of incentive, being able to do things your way and control your own destiny.

That’s what the income tax system is destroying in America, the economic liberty that brings a ton of innovation. That’s why big corporations do all the things to us we don’t like, because big government gives them unfair advantages. Living in a homogenized society may not be the most terrible thing, everyone working in cubicles with a 401k and doing it the way someone else wants it, but that isn’t what made America what it is. It was never meant to be a place where people were stamped out uniformly like postage stamps, standing in long lines at McDonald’s.”

So, high taxes don’t do anything to the already rich, but they sure do keep people down. This is one minor example of how the rhetoric doesn’t match the actual results of a policy. “Tax the rich” equals “keep people down and help the rich.”

Do you want policy that sounds good but hurts the average American? Or do you want policy that delivers?

Know where you stand.

Scenario 1:

Let’s say I have a great idea for a business. I want to give it a whirl, I’ve secured appropriate funding (investors and loans), and I am gonna make this thing happen!! I open my business and things are going GREAT! Things start going downhill, and then I get into trouble, financially. I try to sell the business, but no takers. I am done for. The bank and investors get all their money, but I’ve lost the business, my house, my savings, and my family and I are destitute and homeless.

Scenario 2:

The same scenario, except this time, I incorporate, in other words, I become a corporation. This means that I have some protections when going into business. If things go bad, the bank and investors get everything, except my personal stuff. Imagine things go downhill in this scenario. Several things can happen. I can still try to sell the business to someone who thinks they can make it work. If that doesn’t work, I go under, the bank and investors take ALL the business assets and I have to walk away, jobless, without an income, but my family and I are not homeless on the street. If I had 6 months savings, for just in case I lost my job, the bank and/or government can’t take that money. So, I don’t have to go on welfare or whatever, I can look for a job before my savings run out.

Scenario 2 is better for me, better for my family, and better for the country. If everyone whose business went under had everything taken away from them, there would be a ton more people on the public welfare rolls. This is BAD for everyone. Also, without these legal protections, why would anyone take the risk of starting a business? And, small businesses (having under 50 employees) provide 68% of the jobs in America. If no one started businesses, all those other people would be out of luck. It just makes sense to have legal protections that separate business from personal funds.

So, what are corporations? They are people who have legal protections against being destitute. That’s pretty much it, in a nutshell.

Saying that corporations are not people is like saying that workers are not people because they are a group. “Workers” are make up of people, and so are corporations. This business about corporations being people is only an issue because people don’t know what it means to incorporate. Businesses are run by people And, they aren’t wizards behind curtains, either. All the info you need about a corporation is public information. Take advantage of that, and dispel this idea that corporations are run by faceless, nameless entities. Nope. They’re run by real people, just like you and me.

The other day, my beloved husband and I were looking for a florist to purchase some flowers to put on a grave in the Ft. Sam Houston National Cemetery.

Finding a lack of actual florists nearby, my husband astutely pulled into the parking lot of an HEB grocery store he spotted. This was great as it was right on the way to our destination, and we knew that every HEB has at least a minimal amount of floral items from which to choose.

Well, this HEB was near the national cemetery. They chose to stock a vast assortment of silk and real flower arrangements, designed specifically for people to put on or near gravestones of their lost loved ones that were buried a scant distance from that store.

Once we had purchased our assortment, placed it at the grave site, taken pictures, and were driving away, I remarked, “That was so cool that that HEB carried those flowers. It made this so much easier for us.”

Some, usually statists or liberals, would think, “Oh, that evil HEB! They are just playing on the emotions of people who lost loved ones! They just want to make a buck!”

First, tell me anyone who is in business, has a job, or is a human being, who doesn’t need to make a living to feed themselves and/or their family. Second, why is it a bad thing that HEB would make that money by providing a product that I desperately wanted that day? My husband and I were delighted to part with a small amount of money to not have to drive to a florist that was at least 5 miles away, or do without.

Second, please tell me WHO should be paying for the flowers, if not me? If anyone else paid for them, and I received the benefit, or HEB did…that would be theft of that other person’s property (their money). Why, exactly, could this ever be looked at as a good thing?

There is a quote by Walter E. Williams from one of his articles that sums up the best way to look at this situation:

Prior to capitalism, the way people amassed great wealth was by looting, plundering and enslaving their fellow-man. With the rise of capitalism, it became possible to amass great wealth by serving and pleasing your fellow-man. Capitalists seek to discover what people want and produce and market it as efficiently as possible as a means to profit.

And, finally, if you wish to see more about how capitalism is awesome, read this.

In the end, I look at it from a reality perspective, with a firm grasp on the necessity of the law protecting private property ownership. HEB rocks for making a lovely and helpful choice in deciding what to stock.

One of the best economists is the world is Thomas Sowell. He is a stalwart for liberty and truth. Well, now he is. He started out as a Marxist. Not the kind that covers it up and says they are just for “social justice” or whatever, but a full-on, “Yep, Marx was right!” kind of Marxist. He even studied under Milton Friedman for a year and still thought his views were right. It takes a special kind of stubborn to do that.

Then, he got a job with the Department of Labor. He was specifically involved in the area of minimum wage enforcement. He soon found that the department never, not once, checked to see that the laws they were enforcing were helping the people they were supposed to help. In fact, they avoided it. They were only interested in one thing: making sure they kept getting more and more funds so the department could grow. That’s IT.

He then took it upon himself to see if the increases in minimum wage helped the target demographic they were supposed to help. Turns out, what it did was cause vastly more unemployment for that group. Did the department heads care? Nope.

That’s when he woke up and realized that he was ever-so-wrong.

So, when you support minimum wage increases, what you are saying, in essence is: I SUPPORT POLICIES THAT CAUSE POOR PEOPLE TO BE AND STAY UNEMPLOYED.

It’s the results that matter, and minimum wage laws dramatically hurt those they are intended to help. They even keep low skilled workers from ever being able to get a foot in the door, to then gain experience, to then get promoted and get raises. If they can never get the job in the first place, because their work is not worth the cost of the amount they are required to be paid, how can they ever have a chance to pull themselves out of poverty? They can’t. Then, the government steps in and gives them “welfare,” which is anything but good for the soul.

So, the laws first destroy the chances of being self-supporting, then, the “fix” laws cause their souls to be crushed. How would you feel if the laws first blocked any chance of success, and then offered to be your very low paying sugar daddy? It would suck the very essence of self-respect out of you, that’s what it would do. And, yet, that’s what we have and the same people who will be unemployed very quickly if they get their way are picketing for $15/hour. It’s economic suicide.

You may think that you don’t support hurting poor people, or want that, because you have the best of intentions. But, there is a very, very old saying that applies here. The road to Hell is paved with good intentions.

Social Security Is No Such Thing

When FDR came out with this plan of SS, he hyped it as taking care of old people. Who doesn’t want grandma and grandpa to be able to live their lives without fear of starving in their old age?! But, he lied.

Here’s what really happened, and what is still happening.

The system was set up that you only got money if you had the audacity to live past your life expectancy. Isn’t that just lovely? This was not about retirement, not about the golden years, but the few who actually lived past when you were supposed to already be dead.

This, for me, is around age 71. That is the life expectancy of people born in 1974. So, the way it was set up to work is that I would only collect after that age, not the 67.5 years old I have to be, according to the SS reports I get sent.

Many that “signed up” for SS never saw a dime. They died having paid in, but never got their pay out. What a plan, huh??

Anyway, the years rolled by and the government, who has multiple sets of books (known in the real world as “fraud”), saw ALL THIS MONEY rolling in from the entire workforce of the USA. They, being greedy little weasels, promptly spent it all and still do. Imagine a brief case with a bunch of IOU’s in it and that’s the SS Trust Fund. Now, they pay out to old people what they take in from the workers. That, in real life, is called a Ponzi scheme – think Bernie Madoff…who is in jail for doing just what the government does daily.

Now, here comes the REAL kicker (yep, it gets all the more lovely): if you took the money the government steals, um, I mean, withholds from your pay check and put it in the safest, and lowest dividend paying, investments, you’d get multiple times the return than what the government “gives” you when you retire. Not only do they force you to pay in to pay others now, but then you get shorted, in the end.

The biggest and most crappy part of this is that there aren’t enough workers to keep paying out to people who are retiring in huge numbers. They haven’t figured out how to fund trillions of dollars worth of “entitlements” that they have promised the American people.

Oh, and get this: the law that says they HAVE to pay you back? They can change that at any time. In fact, the law is clear that there is no promise of payment to anyone, ever. Got that? There is NO guarantee that you get anything, ever.

Some safety net, huh?

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