Loading ...CON LAW 101
My anti-property tax friends are on the warpath these days over a lack of a repeal of property taxes. They’ve listed a litany of complaints about the current system, but one minor point of constitutional law I submit to you they are somewhat misguided.
They argue that Article One, Section 22 of the Indiana Constitution forbids the state from enacting “the seizure and sale of homes for payment of taxes.” That is not what the article says. Section 22 reads as follows…
The privilege of the debtor to enjoy the necessary comforts of life, shall be recognized by wholesome laws, exempting a reasonable amount of property from seizure or sale, for the payment of any debt or liability hereafter contracted: and there shall be no imprisonment for debt, except in case of fraud.
This does not mean that the government cannot seize a home or property for an individual’s failure to pay taxes. What this means is that you have a right to keep a certain amount of your property even when you don’t pay your taxes.
I respect my anti-property tax friends’ passion for this issue, but I thought a point of clarification was in order.
January 23rd, 2008 at 9:43 am
I don’t think it has any applicability to taxes. It says “for the payment of any debt or liability hereafter contracted.” It only applies to debt arising out of contract.
January 23rd, 2008 at 10:31 am
http://www.lectlaw.com/def/l036.htm
Taxes ARE a debt and, a liability. So is the government that steals people’s homes.
January 23rd, 2008 at 11:12 am
Others of us prefer to argue about Article 13. I think it was our Governor who told us that 24% of all property taxes now go for either paying off bonds or just paying the interest on them. Shortie? Please pass some more of your legal fictions to “splain away” what appears to be plain English language in one sentance entitled, “Indebtedness”. No cheating-no recourse to pettit foggers or shysters in black robes mumbling. Just splain it away in as plain English as it was written.
January 23rd, 2008 at 11:20 am
Red-Headed step-child, I think you missed the point of my comment about Article 1, section 22. I’m not saying that taxes are not a debt. They simply aren’t a *contractual* debt. And it’s only debts arising out of contracts that the provision addresses.
As to Mr. Dixon’s comment, just for the record, Article 13, section 1 says:
“No political or municipal corporation in this State shall ever become indebted, in any manner or for any purpose to an amount, in the aggregate, exceeding two per centum on the value of the taxable property within such corporation, to be ascertained by the last assessment for State and county taxes, previous to the incurring of such indebtedness; and all bonds or obligations, in excess of such amount, given by such corporations, shall be void: Provided, That in time of war, foreign invasion, or other great public calamity, on petition of a majority of the property owners in number and value, within the limits of such corporation, the public authorities, in their discretion, may incur obligations necessary for the public protection and defense to such amount as may be requested in such petition.”
———
I’m not going to try to explain the circumvention in plain English because I’m not sure such a thing can be done. My understanding is that there is some hocus-pocus involved with corporations that are and aren’t government entities at the same time. But I might be wrong.
January 23rd, 2008 at 12:14 pm
With all the fearmongering about governments seizing homes, it’s important to remember that many thousands of homes are seized by banks in foreclosures in Bush’s Recession.
What should the legislature do to protect so many homeowners from losing their homes to the predatory sub-prime lenders?
January 23rd, 2008 at 12:22 pm
“exempting a reasonable amount of property from seizure or sale”
If a property is on .2 acres and conmprises a single 3 bedroom home, what portion of of that is a reasonable amount that should be exempt? Enough to provide shelter for the family who lives there? Someone in my neighborhood is losing their entire property - the only one they own. Since the Constitution states that a reasonable amount of property must be exempted from sale or seizure, shouldn’t the family at least be allowed to use the kitchen, living room, and bathroom? I’d call that reasonable, rather than putting a family who is already down onto the streets.
January 23rd, 2008 at 12:45 pm
Shortbreak:
“exempting a reasonable amount of property from seizure or sale”
Just means that they take the house and land and you get to keep the clothes on your back because they can’t profit from the sale of used clothes.
And they will probable let you keep your dishes to, Because they eat off of fine china that we buy for them.
January 23rd, 2008 at 12:52 pm
“Wilson46201
January 23rd, 2008 at 12:14 pm
With all the fearmongering about governments seizing homes, it’s important to remember that many thousands of homes are seized by banks in foreclosures in Bush’s Recession.
What should the legislature do to protect so many homeowners from losing their homes to the predatory sub-prime lenders?”
Good question Wilson, First time I believe I have seen one from you although typical liberal smack on Bush’s Recession.
Part of me says save the home owners but another part of me asks what percent are they responsible for their own mistakes. It seems to me a lot of people do not properly educate themselves prior to jumping into any contract. I realize a great number of them were swindled or out right lied too, but they need to eat some of blame too.
As much as I want to help them I dont want them walking away scott free so..wow….good quesiton Wilson. How much repsonsiblity does a tax payer have to corupt mortage brokers, or stupid banks that made the loan, or the victems.
What do you suggest Wilson that doesnt put the entire burden on the tax payer?
Crow
January 23rd, 2008 at 1:21 pm
The bond debt is bankrupting our state.
Abdul…please look in the the Comprehensive Annual financial report. Want to tackle that one?
Glad you are listening.
January 23rd, 2008 at 1:23 pm
The tax problem in Indiana is not going to be solved by trying to interpret the Continuation of the State of Indiana in a manor contrary to it’s understood meaning, or by twisting and turning the reality of the laws to meet what one groups need. The simple reality of the matter is that our representatives (or so they are called) spend like drunken sailors on payday without accountability or retribution.
There are school systems spending millions of dollars to get rid of staff that they do not like. There are local and city governments who can spend a million dollars to fund the ‘arts’ but cannot order new police cars. Choices made without consequence.
Ladies and Gentlemen our President is not responsible for any downturn in the economy. The government did not cause home buyers to sign deals that they would not be able to keep. Bush didn’t cause us to run our and jack up our credit card balances. The national guard did not hold a gun to home builders’ heads and order them to build more houses than the market would support. You see, society at large has been spending like drunken sailors as well. Most certainly at some point the home market was going to melt down. It is a question of supply and demand. There are far more homes on the market than there are viable buyers in the market. In part this is because the builders built too many, and in part this is because many buyers signed mortgages that they could not afford to complete. Is the real estate market crap right now? Yup, the residential one is. Commercial is booming. Is the country in recession because of this? Nope. The residential real estate market is in a recession. Big difference. People are not getting their houses foreclosed on because of the government, but because they bought more house than they could afford. Period.
In the end, the tax problem is a spending problem. The spending problem is representative of our own personal habits as a society. Do we need football stadiums for high schools? Hell no. We played in the rain, snow and mud, and lived to tell about it. Does every room in a school need a TV? Nope. So why are they there? We used to have a tv on a cart, and it only came out for very special occasions.
Do we need big screen tv sets at home? Nope. Shoot, society at large spends far too much time looking at the idiot box anyway. When I was a teenager, we watched two, maybe three hours of tv a week. That is correct… I said a week. I am in my mid 30’s. Now kids watch more than that in a single night. Reality what? Yeah right.
Look, how can you complain about the government doing the same thing that you do? Personal responsibility is required before you can hold anyone else responsible for anything. Our current society is not too keen on responsibility though. So where do the real problems rest? Perhaps right in front of our mirrors. Wake up America. Wake up Hoosiers. Wake Up.
Wilson46201: Careful there. Your butter has done slid off your biscuit. Best if you don’t slip and fall in your own mess now.
January 23rd, 2008 at 1:49 pm
wilson, why is it our presidents fault if the people go out and borrow more money then they can afford to pay back.. i for one checked with and asked my mortgage company how much my payments would be.. i can not believe that the people who want to buy didn’t have enough sense to ask how much and how much the payment could raise. i believe most of these borrowers have themselves to blame…..if you are borrowing 100k then ask questions.
January 23rd, 2008 at 1:51 pm
Doug,
Look at the bottom of a mortgage disclosure…Read the part about an undisclosed lien against YOUR property.
The State’s hand isn’t in your pocket because they want to see how well you’re hung. They want to take a portion of how well heeled you are—That amount is getting larger every day.
January 23rd, 2008 at 2:03 pm
Circumvention? Circumlocution? Judicial lying? err…fictions? I think the short one is scratching around but he won’t find the answer in any old Illinois legal textbooks although they weren’t immune, back in the day, from Whig “Improvements”. Doug, I’m thinking that there is NO plain English way of getting around that one sentance, no honest way,no look them straight in the eye hand on the bible way. Doing away with property taxes and we won’t see 26 cowards cowering constantly.
January 23rd, 2008 at 2:50 pm
This is just to provide some actual information about the State’s bonding and debt service from someone that actually works with bonds and understands how they work and their importance. When Indiana went bankrupt after the failure of the Erie canal project through Indiana it was made illegal for the state to contract debt. However, once the state couldn’t issue debt they found out that they couldn’t fund the provision of necessary infrastructure like schools, hospitals, governmental facilities because it is impossible to pay for these projects with the cash on hand or current revenue of the government. It is just like if we didn’t allow people to contract debt to buy homes or cars, most would be without. To remedy this, the state create quasi-governmental entities to contract debt for the state. This is the same solution many other states had to resort to when they could fund necessary infrastructure and could get the political momentum to repeal the ban on state debt. Public debt financing is just a reality you are going to have to deal with b/c without it disastrous results will occur.
January 23rd, 2008 at 3:52 pm
JAK…I’m sorry, but “disastrous” results are a reality with our current system of spend and debt. By the way…not all of us run credit card balances and drive cars that aren’t paid for. Some of us even pay our mortgages ahead.
January 23rd, 2008 at 4:42 pm
JAK: You’ve got major disclosure issues and a philosophy that fails Adam Smith’s tenets of fair taxation- read em. By the way, you can draw upon your experience and education to know that the purpose of public education is learning not real estate development (note: folks in India & China are learning quite well in far lesser facilities). You’ll also note the performance of our public schools and hospitals are hardly “investment grade,” unless of course you think your bond holders would link their returns to Indiana’s graduation & hospital reimbursement rates; never minding a little moral problem like forging the signatures of citizens to use their property as collateral, through a process that’s inaccessible by design. Ask Greg Wright about the three school board members whose “public education” didn’t afford them the knowledge that bonds are a debt instrument that has to be repaid. It’s time to privatize our schools and hospitals if only for one reason- results. It’s not that Marxism hasn’t been tried by the right people; it’s just the wrong idea if you’re concerned about the rights of people.
January 23rd, 2008 at 4:56 pm
JAK doesn’t want to lose his cush law firm contracts paid for with our second jobs, our savings, and our home equity. JAK, the people are not slaves, you know. We’re just like you, only we have an ethic.
January 23rd, 2008 at 7:04 pm
It seems some are missing the moral of JAK’s point. To believe our government can pay for all construction projects through cash on-hand is almost a fairy tale. The thing we have to do is limit the number of projects to only necessities and scale back the size of such projects when able to do so. Of course what is a “necessity” for our community is open to varying interpretations…
January 23rd, 2008 at 9:03 pm
Wilson, as usual, is full of it. We’re not in a recession and aren’t likely to be.
January 23rd, 2008 at 11:21 pm
Tell that to Bernanke and the Stock Markets…
January 24th, 2008 at 12:44 am
I don’t know, Wilson. The market seemed to do just fine today.
January 24th, 2008 at 12:48 am
So what are you saying, Abdul? What are “necessary comforts of life” if not a home? Do you think that the people who wrote the constitution, when the state was broke and foreclosures were high, were saying that you could keep spoons and snuffboxes but not your house?
Come on now…
What else is a necessary comfort of life if not a place to sleep?
Let’s remember that the people who lose their homes the most are not rich folk. They’re mostly the poor who can’t afford to hire a lawyer, right?
These are not investment properties. They are necessary comforts of life.
Read what I wrote in the Winter Journal of the IPR at http://www.inpolicy.org/images/pdfs/winter2008.pdf
January 24th, 2008 at 6:34 am
Here is some more Con Law for you, Abdul…
Let’s look at school funding in the Constitution at Article 8:
http://www.in.gov/legislative/ic/code/const/art8.html
The original 1816 Constitution spoke of the importance of education, but provided no funding methods. This was addressed in the 1851 Constitution at Article 8 Section 2.
Nine very specific methods of funding our “common schools” were laid out for the voters, who then ratified the Constitution.
Of those nine funding methods, the ONLY time that any type of a tax on property is mentioned AT ALL is the last funding method:
“Taxes on the property of corporations, that may be assessed by the General Assembly for common school purposes.”
That’s it! There is absolutely nothing authorizing the taxation of private residential property for the support of our “common schools”, yet people are loosing their homes to the property tax - of which about 50 percent consists of this tax to support the common schools.
The very first school tax passed in Indiana in 1849. To become binding, it had to be voted upon by those elegible to vote — in other words, the people expected to PAY the tax were ASKED if they wanted this tax. Sound like a REFERENDUM to me. It wasn’t forced down their throats like it is now.
Now, more ConLaw. Since Article 8 Section 2 quite specifically articulated the funding scheme for the schools, how does the taxation of private residential property to support the common schools gel with Article 1 Section 25, which states “No law shall be passed, the taking effect of which shall be made to depend upon any authority, except as provided in this Constitution.”?
Article 8 is not an open checkbook to our legislators. Nothing in Article 8 says that they may fund the common schools in any manner they see fit. NO! The Delegates specifically articulated nine methods of funding. Taxation of private residential property is not Constitutionally-sanctioned.
Since the Constitution does not permit the taxation of private residential property, where did this tax come from? How is it Constitutionally-supported? Where did the legislature get the authority if it didn’t come from our Constitution?
I wonder why many in our legislature have chosen to REMOVE the power of the REFERENDUM in voting for school expenditures?
Abdul, I’ve been saying this for years. So has Andy Horning. When are YOU going to start asking these questions to folks in the school system, and our legislators? Enquiring minds want to know!
January 24th, 2008 at 7:42 am
Eric, Crow, et al…
Nice arguments, But regardless of the tax situation, you need some basic economics and history lessons.
When George W. Bush took over, our budget was balanced. Our debt was one-eighteenth what it is today.
That’s government debt. Not my home mortgage or yours.
And he picks a fight with a nation that had nothing to do with 9-11-01, which costs us billions a month.
Frankly, this economy is held together with chewing gum. If the war expenditures weren’t on the table, it might be worse. Even in Indiana, the trickle-down of war expenditures is immense. Think Atterbury, Hummer and Crane.
Try tho they might, the Reagan-Bush apologists are one thing mostly: big spenders. They have proposed budgets which exceed the enacted budgets. So, combine big spending with historic tax cuts which cannot be justified, and if we ran our home budgets that way, we’d be in prison. Granted, CoOngress piled on with entitlements and earmarks. But I didn’t see Bush veto any of that…hmmmm….some ugly little secrets aren’t so secret.
Democrats are no better, but, the facts are: under four five terms of Republican presidents since 1980, spending has increased wildly. And taxes have bene cut. Less money in, more money out.
How freaking basic does the economics need to be?
January 24th, 2008 at 10:41 am
JAK answered a question not asked. The Constitution is organic law, superior to mere acts of a foolish group of elected officials, like our legislatures. Isn’t it true, according to the Article 13 that all bonds in excess of the 2% are null and void? I, for one, am quite willing to see them voided. It would free those who own property from those who are piecemeal robbing them of same. It would restore Indiana’s credit rating to top grade, too, wouldn’t it? And, the free market would set fair interest rates on those projects below the CONSTITUTIONAL limit of 2% of assessed valuation. Too, I notice the lockjaw on this matter by Abdul. I didn’t mean to set a high bar. JAK has given his honest opinion.
January 24th, 2008 at 1:31 pm
Local property tax activist Mike Rowe (Black Sunday Rally) asked a question of the legislators at last night’s Channel 13 tax forum that was completely ignored by Kenley, Orenlichter, Crawford, and Espich. He wanted to know why homes are being taxed for schools when Article 8 of the Indiana Constitution says the taxes for schools are to be paid by businesses.
January 24th, 2008 at 2:06 pm
Melyssa,
The answer is simple. Corporations can afford expensive lobbyists and handsome campaign contributions. Combine that with the “resources” to dig up some dirt and do a little bit of off-camera arm twisting, and you end up with corporate taxes being quietly replaced with taxes taken from the citizens.
That’s how it works.
Also, it’s not only the elected officicials who should be held accountable for maintaining this unlawful activity. Our media is supposed to be following an ethics code to keep the people informed on government activity. I have never read a media report that discusses the fact that Article 8 is violated every time a property tax bill that includes school taxes shows up on an Indiana doorstep.
Have you?
There was a day in this country when corporations shouldered the brunt of taxes. In the last 50 to 75 years there’s been a complete paradigm shift that’s placed the tax onus on individuals and personal income as opposed to the foundational premise that we tax profits.
Like I said already, that kind of shift doesn’t naturally occur. It requires money and arm-twisting.
Maybe it’s time for the taxpayers to fight fire with fire. Anybody got any good dirt?
January 24th, 2008 at 6:18 pm
Shorebreak, The tax revolters need you to join us.
January 24th, 2008 at 11:36 pm
Melyssa,
I have no beef with paying taxes, so long as they are Constitutional, they are reasonable, and they are used for lawful, ethical government activity with full public disclosure. Therefore, EVERYONE needs to join in tax protesting, if they know what’s good for them. It’s not just folks like me and you who are affected.
The kind of people you really need are the one’s who occupy the State Capitol and who represent us in Washington. Until those folks are willing to stand along side of you, hold signs with you, and speak on your behalf, nothing will be done. Right now it’s still Us v. Them.
That’s why “the people” need to twist arms and conduct backroom dealings as effectively as the corporations. To date, that practice has been used behind closed doors to influence officials to “break” the law. What’s needed now is an effort to encourage lawmakers to “follow” the law. Our elected officials need to be influenced, they need to know that we’ve taken more than enough, and they need to know that we’re not gonna take it beyond their current terms in office.
I’m certain that a very effective and lawful strategy could be developed to accomplish that very thing. It starts with gaining the public voice of one representative. Then you work on another, etc. There’s a lot of ways to get that done without taking the illegal route that our corporate competition favors.
FYI - I’m not anti-corporation, an anarchist or a socialist. I’m a Constitutionalist. I broadly support free enterprise, but never when it’s influence illegally trumps Constitutional law.
January 25th, 2008 at 12:05 am
Abdul: Checkout article 2 section 9 and see just how many of our legislators are in disobeyance of it. Let’s ask them to select their lucrative government job or the legislature. Pat Bauer is one of them.
Also, I think that we could, by including services in the sales tax equation, raise sufficient monies to support the government and at the same time lower the rate to approx. 3% helping lower and middle class earners and seniors and veterans and others on fixed incomes. I have anecdotal data to support this and am working on empiracal data to prove it.
January 25th, 2008 at 6:26 am
But I don’t want to pay taxes on my dentist’s fee when I have my teeth cleaned or repaired, or on my doctor’s fee when I have my annual physical, or on what the mechanic charges me to repair my car, or on what the roofer charges me to re-roof my house, or on my realtor’s fee when I buy a house, or on my lawyer’s fee when I write a will, or on my accountant’s fee when he does my taxes…
January 25th, 2008 at 10:36 am
Shorebreak, our activists do the type of activity you discuss and can always use more help and ideas from intelligent people. We also are not anti-taxation, we’re for fair taxation. Our current situation is not fair. Corporate welfare is not fair.
January 25th, 2008 at 8:25 pm
Melyssa,
I’m not surprised that members of the General ASSembly punted that question.
The typical answer I received when I confronted them at the Statehouse was, “Well, what will we REPLACE it with?”
Cute, huh ?!?!
I never had ONE of our elected officials concede that I was correct.
I guess violating our Constitution…and their oath…is swell if it supports their concept of the ‘common good’.
As Abdul is fond of saying…”Pitchforks and torches, anyone?”