Your American dream becomes your worst nightmare

The term “American Dream” was coined by Pulitzer Prize-winning author James Truslow Adams in 1931. His dream was simple: “Life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement.” For many Americans, a piece of that dream includes home ownership. So, in 1934, at the height of the Great Depression, Congress created The Federal Housing Administration (FHA) to insure mortgages and allow more people to achieve that portion of their American Dream. 

Of course, with home ownership comes responsibilities. Beyond the mortgage, there is the cost of utilities, upkeep and property taxes. And then there is inflation. According to the Bureau of Labor Statistics consumer price index, the cumulative price increase since 1934 is 2,132.61%… or a little more than 22 times higher. The good news is owning your home can be one of the best methods to hedge against inflation. 

But perhaps the largest beneficiary of your inflation hedge is the cabal known as local government. It is in a unique position to not only cash in on the escalating value of your property but create the assessed value that determines their take. And the key word is “take.” After all, you are the inadvertent benefactor… NOT the fortunate beneficiary of their valuations. The net financial result of their efforts is a fine in the form of property tax they levy at their discretion. 

The most insidious aspect is the fact the cabal extracts money from property taxpayers on unrealized gains. You aren’t worth a nickel more after the assessor’s valuation than you were before, but you will be forced to fill their coffers with real cash from the imaginary numbers they created. They attempt to make you feel better by telling you how much your property has appreciated, but unless you sell that piece of your American Dream, it’s a moot point. And there isn’t a lending institution on the planet that is impressed by the assessor’s valuation. You simply have to make more money to avoid your local government eventually owning your American Dream. 

How did we allow this absurdity to take hold? The IRS may be the most deservedly unloved federal bureaucracy that exists. Yet even the IRS — or the politicians who create tax policy — haven’t successfully figured out a method to squeeze taxes out of the unrealized gains in our stock market and retirement accounts. Granted, Joe Biden tried, but it seemed the Constitution got in his way. However, for some inexplicable reason, local governments are allowed to fleece taxpayers without anyone questioning their legal authority or, perhaps more troubling, their moral authority to do so.

Any discussion regarding property taxes usually ends up with policy wonks quibbling over millage rates and assessments. The broader conversation is lost in the shell games played amongst the bureaucrats. But that broader conversation should be blatantly obvious to anyone who actually takes the time to think about the subject. 

The chief deputy for the Polk County Assessor’s Office, Bryon Tack, said the average property assessments could increase 22%, “the highest percentage increase to residential properties in the history of Polk County.” 

He was also quoted in The Des Moines Register, saying: “Typically it’s a good thing because that residential home is often times someone’s largest investment. And we’ve had a lot of appreciation over the last two years.”

Tell that to the retired homeowners who are forced to sell their homes, get a reverse mortgage or go back into the workforce to pay for an exorbitant tax increase. That’s when local government turns the “American Dream” into a homeowner’s worst nightmare. ♦

Kent Carlson is a native Iowa artist interested in preserving Iowa’s architectural heritage and the common sense of its leaders.