Halloween may have passed, but here is a horror story about the government using its power to tax as a means of seizing private property, then making a profit for itself. Michigan’s Oakland County basically stole an elderly man’s house and flipped it for a profit.
An 83-year-old retired engineer in Michigan underpaid his property taxes by $8.41. In response, Oakland County seized his property, auctioned it off to settle the debt, and pocketed nearly $24,500 in excess revenue from the sale.
Under Michigan law, it was all legal. And hardly uncommon.
Uri Rafaeli, who lost his property and all the equity associated with it, is just one of thousands of people to be victimized by Michigan’s uniquely aggressive property tax statute.
This is yet another example of a law being passed with good intentions but soon turning into a nightmare when power-hungry officials pervert it:
The law, passed in 1999 in an attempt to accelerate the rehabilitation of abandoned properties, empowers county treasurers to act as debt collectors. In the process, it creates a perverse incentive by allowing treasurers’ offices to retain excess revenue raised by seizing and selling properties with delinquent taxes—even when the amount owed is minuscule, and even when the homes aren’t abandoned or blighted at all.
Reagan’s immortal words about the government helping come to mind, with this being one of the more nightmarish examples of a bureaucracy running roughshod over the citizens.
This Reason article is quite lengthy but good. It goes into detail about Rafaeli’s horrifying tale, as well as providing other examples of Oakland County’s property confiscation racket.
The law may be filling the county coffers, but it doesn’t seem to be doing what it was originally intended to do:
The county’s aggressive home equity forfeiture scheme seems to be part of the problem. Over a two year period between 2017 and 2018, volunteers working with the Quicken Loan Community Fund, a Detroit-based nonprofit connected to the mortgage company, interviewed more than 60,000 property owners who owed taxes to the city. Most were aware that they owed taxes, but did not have accurate information about the process or the potential consequences.
Worse, the survey found that aggressive use of home equity forfeiture was leaving the city with more vacant properties, not fewer.
Perhaps the stated intention was merely a misdirection ploy. Avowed bureaucracy cynics like myself might say that the law is working exactly as intended.
PJ Media Associate Editor Stephen Kruiser is the author of “Don’t Let the Hippies Shower” and “Straight Outta Feelings: Political Zen in the Age of Outrage,” both of which address serious subjects in a humorous way. Monday through Friday he edits PJ Media’s “Morning Briefing.”