As an example of the confusion over society sector morality, we have this particular defense of a Michigan law concerning the leftover money, if any, after a tax foreclosure sale to pay back taxes. Crain’s Detroit Business sets out the case:
- In tax foreclosure sales, state law allows governments to keep money left over after overdue property taxes are paid
- Issue is whether it’s illegal under takings clause in U.S., state constitutions
- Attorney for former Oakland County property owners calls it “stealing”
A lawyer on Thursday warned the Michigan Supreme Court that local governments could face a financial calamity if forced to repay surplus cash from the sale of tax-foreclosed properties.
There is no dispute that state law allows county treasurers to keep money left over after overdue property taxes finally are paid from a sale. The issue for the court is whether the practice is illegal under the takings clause in the U.S. and Michigan constitutions.
“This is unjust and it is unconstitutional. … The government can take the property and sell it, but it can only keep what it’s rightfully entitled to,” said Christina Martin, an attorney for former property owners in Oakland County.
John Bursch, arguing on behalf of Oakland County, told the Supreme Court that property owners have more than two years to avoid foreclosure because of unpaid taxes. But after foreclosure, he added, property rights are extinguished along with any other claims.
“This is not unjust enrichment” by local governments, Bursch said. “When you’re on notice and you fail to do something, you lose your rights.”
He urged the justices to rely on the Legislature to change the law if the public thinks it’s unfair. Bursch said more than $2 billion is at stake if the court declares the law unconstitutional.
“A ruling for the plaintiffs will ruin local governments,” Bursch said. “There are currently class actions pending in all 83 county circuit courts and in our federal courts. … That will come right out of schools, roads police, firefighters and other basic services.”
It’s Mr. Bursch’s final argument which bothers me. It’s basically a distraction for the justices to consider the alleged hypothetical financial plight of the local governments over the settled financial plight of the citizens who feel they’ve been victimized by this law.
Is it the business of local government to turn a profit? No.
Is it the business of local government to manage the affairs of the citizens in a wise and just manner? Yes.
Government entities have several options for raising required funds, primarily taxes. I know there’s been a decades-long push on to lower taxes as if they’re the devil’s plaything, but in this case we’re seeing the unfortunate results of pushing that understandable goal too far: injustice visited upon those least capable of bearing it. The devil is not in the chasing of lowering taxes, but in forcing the funding of government services through alternative means: keeping foreclosure profits as if a government entity has somehow earned them, the insanity of funding law enforcement via civil asset forfeiture, and the moral bankruptcy of private prisons. Each seeks to use means which are not congruent with the goals of government, as they are borrowed from other sectors of society or even simply perversions of the usual methods of government. While they may appear to be an efficient means to those goals, they are also rife with opportunities for corruption. Is this better than taxation, where the numbers are available for all to see and evaluate, and the revenue is predictable, while these other means are neither public, reviewable, nor predictable?
Even suggesting that taxes might have to rise would be inappropriate. Justice isn’t about profits, in this case it’s about who rightfully owns what. Building government services on the backs of those who have trouble paying taxes, or, as the article makes clear, are the victims of clerical errors, is simple madness.
That’s enough venting for the morning.
