Warner Todd Huston
Government-sponsored theft in Indiana
By Warner Todd Huston
The city of Valparaiso, Indiana had a little problem with the 2005 tax receipts. They charged their constituents too much. $3.1 million dollars too much.
It was all because of a computer glitch that accidentally valued a residential home at $400 million instead of the $121,900 it was really worth.
YahooNews reported (Ind. House Wrongly Valued at $400 Million) that "County Treasurer Jim Murphy said the home usually carried about $1,500 in property taxes; this year, it was billed $8 million."
"...18 government taxing units were asked to return a total of $3.1 million of tax money. The city of Valparaiso and the Valparaiso Community School Corp. were asked to return $2.7 million. As a result, the school system has a $200,000 budget shortfall, and the city loses $900,000."
But YahooNews gets the story all wrong.
The title should not be "House Wrongly Valued." It should be "Government OVERCHARGES and SPENDS Tax Receipts." Or "Government Sponsored Theft In Indiana"!
Here is the thing, folks. The story mentions that 18 government "taxing units" had to return $3.1 million in tax money. But, they would not have to "return" that money if they didn't charge for it. They also mention in the story that a "budget shortfall" has occurred. But there would be no "shortfall" if the government agencies had not spent (or planned on spending) that money in the first place.
Let's put it this way. If you check your bank account and suddenly there is $3.1 million dollars in it that you've never had before, don't you imagine that something is odd? Isn't it patently obvious that you have been given money that is not yours? Of course you would realize that someone, somewhere is missing that money and sooner of later they will eventually come to you to find it.
So, do you immediately start spending that money even as you know that this must be a mistake? Of course you don't. You go to your bank and ask to get a clarification. When it is proved that the sudden windfall is not yours, the bank corrects the matter and there is no harm, no foul. You are at square one, back to where your account should have been before the mistake. You owe nothing and those who lost the money get it returned with no loss.
But, no, the City of Valparaiso imagines that their tax base suddenly jumped $3.1 million dollars. It doesn't question the idea that it somehow must deserve this windfall. It doesn't investigate and come to realize that there was an obvious mistake that their tax-base jumped over $3 million dollars in one year. Then it compounded the problem by imagining that it should immediately start spending all that money.
No, what we have here is a city that never doubted for a minute that it should spend money, money that it didn't deserve, money that came to it by an obvious error in the system, and money that it never had in the past. Suddenly, like drunken sailors, or thieves, they began bloating budgets and spending goals to use up this money they did not deserve.
Of course, the other aspect of this is that the government found it had to spend what it imagined was a surplus without even taking a breath to consider it. It was a wild dash to spend it all. Could we expect a government to have a surplus in its coffers? Apparently not.
This is morality tale, one that reveals government to be filled with avarice, greed, and stupidity. It is also a cautionary tale, one that reminds us that government will spend every penny it gets regardless of need.
© Warner Todd Huston
The city of Valparaiso, Indiana had a little problem with the 2005 tax receipts. They charged their constituents too much. $3.1 million dollars too much.
It was all because of a computer glitch that accidentally valued a residential home at $400 million instead of the $121,900 it was really worth.
YahooNews reported (Ind. House Wrongly Valued at $400 Million) that "County Treasurer Jim Murphy said the home usually carried about $1,500 in property taxes; this year, it was billed $8 million."
"...18 government taxing units were asked to return a total of $3.1 million of tax money. The city of Valparaiso and the Valparaiso Community School Corp. were asked to return $2.7 million. As a result, the school system has a $200,000 budget shortfall, and the city loses $900,000."
But YahooNews gets the story all wrong.
The title should not be "House Wrongly Valued." It should be "Government OVERCHARGES and SPENDS Tax Receipts." Or "Government Sponsored Theft In Indiana"!
Here is the thing, folks. The story mentions that 18 government "taxing units" had to return $3.1 million in tax money. But, they would not have to "return" that money if they didn't charge for it. They also mention in the story that a "budget shortfall" has occurred. But there would be no "shortfall" if the government agencies had not spent (or planned on spending) that money in the first place.
Let's put it this way. If you check your bank account and suddenly there is $3.1 million dollars in it that you've never had before, don't you imagine that something is odd? Isn't it patently obvious that you have been given money that is not yours? Of course you would realize that someone, somewhere is missing that money and sooner of later they will eventually come to you to find it.
So, do you immediately start spending that money even as you know that this must be a mistake? Of course you don't. You go to your bank and ask to get a clarification. When it is proved that the sudden windfall is not yours, the bank corrects the matter and there is no harm, no foul. You are at square one, back to where your account should have been before the mistake. You owe nothing and those who lost the money get it returned with no loss.
But, no, the City of Valparaiso imagines that their tax base suddenly jumped $3.1 million dollars. It doesn't question the idea that it somehow must deserve this windfall. It doesn't investigate and come to realize that there was an obvious mistake that their tax-base jumped over $3 million dollars in one year. Then it compounded the problem by imagining that it should immediately start spending all that money.
No, what we have here is a city that never doubted for a minute that it should spend money, money that it didn't deserve, money that came to it by an obvious error in the system, and money that it never had in the past. Suddenly, like drunken sailors, or thieves, they began bloating budgets and spending goals to use up this money they did not deserve.
Of course, the other aspect of this is that the government found it had to spend what it imagined was a surplus without even taking a breath to consider it. It was a wild dash to spend it all. Could we expect a government to have a surplus in its coffers? Apparently not.
This is morality tale, one that reveals government to be filled with avarice, greed, and stupidity. It is also a cautionary tale, one that reminds us that government will spend every penny it gets regardless of need.
© Warner Todd Huston
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