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Left with Nothing

washingtonpost.com

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Re: Left with Nothing

#261

Post by derleth »

staccatomeasure wrote: post #222
derleth wrote: post #137

Earlier quoted context omitted.

> I'd rather take my chances with a judge than nearly guaranteeing failure in the current system. Ah yes, the "Let that person solve it" school of fixing major social problems. It works really well right up until it fails really badly: George Washington was, for a while, effectively a dictator in that he could have been President-For-Life long before we came to associate that concept with bad outcomes; sadly, for eve…

You're argument that entrusting certain officials with making good publicly known decisions "works really well right up until it fails really badly" based off of a weird GW parable has me scratching my head. And regarding small claims courts - the amount of damage a judge can do is directly related to how much a person is worth, just like fines for civil infractions. It can be nearly nothing or it can be life alterin…

> You're argument that entrusting certain officials with making good publicly known decisions "works really well right up until it fails really badly" based off of a weird GW parable has me scratching my head.

You're the one who advocated that judges be allowed to ignore the law and judge entirely based on their own good judgement. I pointed out that there are few people who even have good enough judgement to abdicate at the right time.

> And regarding small claims courts - the amount of damage a judge can do is directly related to how much a person is worth, just like fines for civil infractions. It can be nearly nothing or it can be life altering.

That's why we have laws and we make judges follow those laws. It ill-serves society to force extremely good judges to follow poorly-thought-out laws, but the losses on that end are more than made up for by forcing the idiot and asshole judges to adhere to laws written by people who aren't explicitly out to screw you over.

Re: Left with Nothing

#262

Post by tsotha »

pdonis wrote: post #193
rayiner wrote: post #158

The article doesn't come out and say it, but the impetus for tax sales is that foreclosure proceedings are pretty onerous and take forever. At the same time, property taxes are the primary source of revenue for the local government and must be collected. So it doesn't seem ridiculous at face value to sell the debt to private investors and let them do the collection while being able to recoup the fees involved in fore…

I'm skeptical of the "lien holder gets the equity" claim because it doesn't work that way outside of DC or in foreclosure generally I'm not sure I understand. Foreclosure means the lien holder takes title to the property, and the current owner, the one who owes the debt that the lien holder was unable to collect, loses title. Then the lien holder, who now has title to the property, sells it for whatever the market wi…

>Then the lien holder, who now has title to the property, sells it for whatever the market will bear, and pockets the sale price minus whatever costs he has to pay. That effectively means the lien holder gets whatever equity is in the property once he has foreclosed on it and sold it.

Not normally, no. Usually the lien holder gets the value of the lien and the remainder of the sale proceeds go to the owner. If the owner is really "left with nothing" he didn't actually have any equity in the house.

Re: Left with Nothing

#263

Post by staccatomeasure »

derleth wrote: post #261
staccatomeasure wrote: post #222

Earlier quoted context omitted.

You're argument that entrusting certain officials with making good publicly known decisions "works really well right up until it fails really badly" based off of a weird GW parable has me scratching my head. And regarding small claims courts - the amount of damage a judge can do is directly related to how much a person is worth, just like fines for civil infractions. It can be nearly nothing or it can be life alterin…

> You're argument that entrusting certain officials with making good publicly known decisions "works really well right up until it fails really badly" based off of a weird GW parable has me scratching my head. You're the one who advocated that judges be allowed to ignore the law and judge entirely based on their own good judgement. I pointed out that there are few people who even have good enough judgement to abdicat…

I never said they should be able to ignore the law and judge entirely based on their own good judgement.

A single point of reference argument about people not having good enough judgement to abdicate (which relied on a case of abdication?) isn't a sealed argument that people/judges have bad judgement.

"but the losses on that end are more than made up for by forcing the idiot and asshole judges to adhere to laws written by people who aren't explicitly out to screw you over." Based on what? Why are judges explicitly out to screw you over? And are you joking that judges are more out to screw you over than law makers?

And your argument about idiot and asshole judges out to screw you over is coming from where? If I had to guess I'd say that most judges follow the status quo, a smallish portion can be pricks at times (but within the boundaries of the law), and the ones who truly go out of their way to be exceptional are doing so in the name of civil rights and civil liberties.

Re: Left with Nothing

#265

Post by alternize »

larrik wrote: post #36
alternize wrote: post #28

the article's title makes it hard for me as a non-us citizen to understand what foreclosure means in this context. what i got from the article is this: due to the financial situation of the owner, a small unpaid tax turns due to unfair practizes into a larger debt of like $5000, which then allowed a judge to enforce the sale of the house so that unpaid taxes could be paid off. now if the house was sold for the mentio…

From what I read: 1) Owner of the house owes a minor amount of taxes. In most of the anecdotes, the homeowners have either no mortgage at all, or otherwise have mostly equity (tiny % of the total value of the home owed). 2) Since the city technically has a lien on the home (or gets one?), they are able to then sell the lien to an "investor", who pays whatever the tax bill is. 3) The investor demands payment, and begi…

thanks. unbelievable - modern government sanctioned robbery

Re: Left with Nothing

#266

Post by pandaman »

nknighthb wrote: post #241
pandaman wrote: post #228

Earlier quoted context omitted.

I don't look at money as a score. I look at my salary as the value of my labor. I sell my labor to maximize the value of my effort. I.e. I am looking to maximize my compensation and minimize my effort. It's pretty much how everything on the market works. To answer your second question is impossible - we don't know the shape of supply and demand curves nor do we know the initial rate of taxes. E.g. if the original tax…

I think if you cut everyone's income of fiat currency by half, the effect is not that everyone is 50% poorer. I think if you cut everyone's disposable income of fiat currency by half, the effect is not that they can afford 50% fewer luxury goods. And I don't think any of the uber-wealthy sit around and think "You know, I was going to make an extra billion in the market, but since I'd have to give up 20% to capital ga…

JFYI - if you take every US billionaire's (all 400+ of them) money (about 1.9T) and split it among everyone in the US (300M) you get about 6300 dollars per person. It's not a lot of money. Might pay your rent and utilities for a year. And then it's gone. It's not their income, it's their whole net worth. So I'd stop fantasizing about money of uber-rich. There is not that much and it does not matter.

What matters is the people who are actually paying the bulk taxes and making investments.

Re: Left with Nothing

#267

Post by bolder88 »

to3m wrote: post #143
bolder88 wrote: post #107

Earlier quoted context omitted.

Yes I do know that. It's still a big disincentive to bother earning more money. Why bother trying harder if the government will take half of anything extra you make?

The question is a fair one, and the answer for the majority of people seems to be: because you get to keep the other half.

Well, that is a little consolation for you, true, the government lets you keep a little bit to keep you from rebelling and keep you placid.

However, I feel that I'm already paying the government FAR more money than I should be, so I'm simply not bothered about trying to make them more money.

Re: Left with Nothing

#268

Post by bolder88 »

dannypgh wrote: post #181
bolder88 wrote: post #88

Earlier quoted context omitted.

Higher rate income tax certainly does. Tax bands certainly provide a big disincentive for bothering to get a better job/raise. Inheritance tax is very unfair. If you are rich enough, you'll plan around it and avoid it. But if you're not rich enough, your kids will not only lose their parents, they'll be sent a bill from the government. Which at best is a tad insensitive. Add to that the fact that the thresholds for i…

Inheritance taxes aren't an issue if the estate is valued - this is after all expenses, debts, etc. have been taken care of- at less than $5.25 million. Numbers vary, but it's definitely fewer than 5% and possibly fewer than 1% of households that need to do anything at all to avoid the estate tax. And these are people who have benefited immensely from services provided by the government (if only the services that kee…

In the UK, inheritance tax starts at around £325k - which is basically a little bit above the average house price.

http://www.hmrc.gov.uk/inheritancetax/intro/basics.htm

You can get around it by 'gifting' things to your kids, as long as you then don't die for 7 years after etc etc.

On your last point, it certainly does exist. What I think happens is people like me don't bother trying so hard, because I'll be damned if I'm going to give the government more money. However, people who are already making much more than me, just hire a good accountant to 'make the problem go away' - eg register offshore companies etc etc

Are you seriously saying, that when the UK government had a higher tax rate of 97% in the 60s/70s, you would have been more than happy to do that extra overtime work, and would have gladly received your 3%??? Crazy

Anything over 49% is slavery, and will end up crippling the country rather than raising more tax revenue. Which is why it was absolutely right and proper that the current government reduced the top rate from 50% to 45%.

Re: Left with Nothing

#270

Post by mherdeg »

rayiner wrote: post #158

The article doesn't come out and say it, but the impetus for tax sales is that foreclosure proceedings are pretty onerous and take forever. At the same time, property taxes are the primary source of revenue for the local government and must be collected. So it doesn't seem ridiculous at face value to sell the debt to private investors and let them do the collection while being able to recoup the fees involved in fore…

> I'm skeptical of the "lien holder gets the equity" claim because it doesn't work that way outside of DC or in foreclosure generally, so I'd be very surprised it it wasn't a misunderstanding on the part of the author.

Here's what a recently formed lobbying organization, "At Home - The Alliance to Help Owners Maintain Equity", said in a spring 2012 letter:

""

A primary flaw in the current tax sale system results from the District government auctioning homes at tax sales even when property values are exponentially greater than the delinquent taxes (which may be as little as $500). If a homeowner is unable to redeem the home following the tax sale, the homeowner loses his/her home and all of the accumulated equity.

""

Now, the DC Bar Association's Antitrust and Consumer Law section said they agree with this letter and re-emphasized that they saw

""

Major Problems with the District’s Tax Sale System

Loss of Equity Homeowners may lose all of their long built–up equity in a property with the tax sale purchaser enjoying an unjust windfall. There is no incentive in the current process to assure that homeowners receive adequate compensation for the loss of this equity, whether through amounts paid at a tax sale or upon disposition of the property following foreclosure. DC law is more punitive to homeowners in this regard than the law of many other jurisdictions.

""

See http://www.dcbar.org/for_lawyers/sections/antitrust_and_cons... .

The Post ended up covering this as news in May 2012, about a month after this statement came out, http://articles.washingtonpost.com/2012-05-28/local/35455912... .

From that 2012 article:

""

The city’s dual-step collection process, in which the OTR is responsible for auctioning off the lien but the investor who purchases the tax-sale certificate is responsible for the ensuing action, makes for a complicated system.

At the tax sale, a winning bidder assumes the delinquent taxes on the property, any penalties that have accrued and an auction fee. If and when the property owner pays off the taxes, the purchaser is refunded the original sale price plus 1.5 percent per month interest on the tab. If the owner fails to pay up within six months of the sale and the purchaser files a foreclosure suit, the owner must also foot the purchaser’s attorney fees.

""

As far as I can tell this latest September 2013 Post coverage ( http://www.washingtonpost.com/sf/investigative/2013/09/08/th... ) isn't exactly anything new — it's just more stories about the same process continuing to cause trouble for folks with poor legal representation and very little spare money.

From a Legal Times blog post in early 2013 about the DC Council considering tax sale reform legislation ( http://legaltimes.typepad.com/blt/2013/01/dc-council-takes-u... ):

""

During a tax sale, investors bid on tax certificates for delinquent commercial and residential properties. After a six-month waiting period, the investor has another six months to sue the property owner in District of Columbia Superior Court. The property owner can pay the taxes, interest – the city charges 18 percent annual interest – and the investor's attorney fees to redeem their property, or face foreclosure.

An estimated 97 percent of owners redeem their property, so tax sales are viewed less as a way to buy property than as an investment opportunity.

""

So if I understand this correctly, it is indeed being claimed by local community advocates that if a homeowner has an unpaid $50 tax bill that is sold to an investor; and some creative accounting turns that bill into a $5000 bill; and the homeowner cannot find a way to pay the $5000, then the investor gets to sell the house and keep the proceeds. But this only happens for one in thirty tax sales.

If you would like to understand this process further and in particular understand whether the Post's latest reporting matches reality, I recommend you contact the AARP Legal Council for the Elderly — call their hotline at +1 (202) 434-2120 and they'll put you in touch with an expert. Alternately, you could try calling the media relations folks at Crowell & Moring LLP (three phone numbers listed at http://www.crowell.com/Contact ); they provide the mailing address for the "Alliance to Help Homeowners Maintain Equity" folks and would be able to get you in touch with someone who can answer your questions about the process.

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