Our state reps in Lansing are eagerly congratulating themselves on temporarily slaying the dreaded Pop-Up Tax. Thank God no one had to dress up like an Indian and toss stuff into a bay:

Under current Michigan law, the assessed taxable value of a home can rise annually by no more than 5 percent or the inflation rate when it has the same owner. But when the house is sold, the new owner’s property taxes usually rise by far more because the cap is lifted, one reason it’s referred to as the “pop-up tax.”

Temporarily holding down property taxes to the previous owners’ level could help spark home sales, the legislation’s supporters said.

“This is about the middle-class American dream of home ownership, and boosting Michigan’s economy”

This plan is patently absurd; for most middle-class home buyers, this can’t conceivably save them more than a couple grand, and that only for one year. A few thousand dollars is nothing to scoff at, but it’s also far from a deal-maker/breaker when you are talking about a $200,000 home.

As I’ve posited before, the reason the real estate market is tanking in Michigan is because speculation created artificial scarcity in the early ’00s, spurring un-needed home construction. Now folks have dumped their “investment” properties, good jobs have fled (taking good workers — and their good salaries — with them), and we’re left with a glutted market. There are too many houses and not enough buyers, and being spared a few grand in taxes in the first year isn’t going to make anyone wake up and say “Hell! I’ve gotta go to Michigan and make a 30-year investment RIGHT NOW!”

This smacks of a legislature with too much spare time justifying their paychecks. Have they gotten that Magic Wonder Budget to the Governor yet? What’s holding that up?

Dave-o is a frequent contributor to GrowDetroit. He unabashedly supports Poor Mojo’s Newswire, a blog of merit since 1905 — now available electronically!

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