Massive Property Tax Fraud Revealed

Originally published at: https://peakprosperity.com/massive-property-tax-fraud-revealed/

This is (yet another) completely explosive story, at least for all y’all U.S. folks. Real estate taxes have been systematically over-applied through the practice of over-valuing property.

The only requirement to be touched by the massive fraud revealed by Mitch Vexler is to own or rent any real property in the States.

It’s quite possibly entirely ruinous to vast tranches of the US municipal bond market. As is typical, the putative regulators and the supposed rating agencies are not on the job protecting US citizens or investors.

Mitch and I met at the Limitless Expo Conference in Dallas. He attended my talk and I happened to put up a slide showing US total debt expanding exponentially at a far higher rate than GDP.

He excitedly approached me proclaiming that my chart was the same as his, only his was a fractal representation showing the growth in school bond debt within a single Texas county as compared to household income.

“As above, so below.”

It’s all interconnected. One mirrors the other.

In other words, there’s an enormous train wreck coming to local budgets. As you well know, one cannot continually expand one’s debt load at a faster pace than one’s income growth. It’s a math problem, but one that has somehow become “just how things are done.”

Well, not so fast, says Mitch. The practices are completely illegal and fraudulently performed. In many cases, for which has the data to prove it, the local budget authorities simply gave the real estate appraisal firms the number they needed to make their preferred budget work and the appraisers would simply goal-seek that number.

Holy smokes!

This is truly one of the largest scams in US history and if it gets undone in the courts – as it should – then there’s a world of hurt coming to the Muni bond market, to local finances, and (hopefully) to the careers of the legion of fraudsters who have been draining their fellow citizens dry.

 

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I tried fighting the property tax increases last year. Constant contact with county commissioners, mayor, had my property re-assessed, showed up to meetings, showed up to budget meetings with an entourage whenever possible. “You are taxing us out of the city,” I said. “Lol,” they said, “Lmao.”

I am currently in a fit of spite, refusing to pay my property taxes. Interest+penalties are ~11% and I reckon inflation is probably running 10%, so whatever. I can miss two years without losing my home - by that point in time I hope KCK is bankrupt (they actually expect to be).

One suggestion I had for them last year was to ‘appraise’ the house at time of transfer. If the sale price was about reasonable, then that. Otherwise, take that sale price of THAT house, and apply CPI adjustment to its value yearly. A spreadsheet can do this, and it would be totally fair. Comparing my 120 year old crumbling house that I bought during 2008 to a house built in 1982 and bought by some yahoo fleeing California, it’s not even comparing apples to apples.

Never mind the fact that property tax on your primary residence is such hogwash to begin with.

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Chris,
I just appealed my “fair market value” on my farm property tax bill. The reappraisal takes place every five years. In the past five years they increased my “fair market value” by 306%! No new structures, the creek still rises and floods the bottom when it feels like it, the road access to my home is still gravel and dirt, and two new homes have cut off my access to about 15-18 acres of my woods.
Art

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“These are humans doing this to humans”. Reminds me of covid. This is my new definition of government. He is fighting for what is right. God bless his efforts!

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I love this guy and his passion for fixing the corruption. Inspiring!

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I hate to be Debbie Downer but this problem is so big it’s “too big to fail” and “too big to jail.” Besides, what national leaders/potential leaders do you think could navigate us through an honest, lawful look at and response to this mammoth problem? Right: none, in any party! We’re doomed to have this unravel on its own like an avalanche. Oh well.

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You will own Nothing?

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School districts, and the state in general, gives a great retirement package to their employees and that money has to come from somewhere. The politicians and government employees doing the negotiation don’t have any motivation to negotiate a sustainable retirement package.

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Looked up the school bond proposal from my hometown for context. 100 million for a middle school. No words.

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We have a similar issue here in Australia: Local Government multiplies their valuation of your house by a figure they pluck out of the ether then sends you an annual ‘Rates Notice’ for the deemed amount. What I dont understand here is how you in the US, or I in this country will benefit by disputing their appraised value. Supposing the ratepayers, as a whole, successfully argue that the local govt rates are 20% above market value. The local govt would simply claw it all back by increasing the rate at which you are taxed by a compensatory amount, would they not?

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That is why we go after the people doing these things not the institution as a whole. You can’t jail an institution anyways. It is just letters on a piece of paper and real in our minds. When enough people experience the consequences of their actions in the name of the institution they work for, that will deter others from continuing doing these things.
We have been conditioned to see the institutions with all the people operating within it as a whole, to big to do anything against. Taking the people out one by one and bring down the institutions by proxy may take some time, especially to see an effect. Still, an effect it’ll have when we stay consistent and persistent, while spreading the knowledge. The more people in the know, to bigger the crowd that can take bubbles of action. Which one makes tings go b00m, we’ll have to wait and see.

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Property owners NEED to monitor EVERY property tax bill to make sure it is correct. Doing so has spared my wife & I many thou$and in overcharges. Following are key details.

In the past 20 or so years, a property’s assessed value has REPEATEDLY been GROSSLY exaggerated. Repeatedly means every 2 or 3 years. We have WON every appeal, and EACH time the tax authority has had to slash the initial assessment 65-85%. For clarity’s sake, that means the value AFTER the appeal was just 15-35% of the initial assessment.

The first appeal was triggered by a tripling of the assessed value over 3 or so year span. That was about 10x–literally TEN TIMES–the change in the value of the assessor’s property that was around the corner from our property. YES, the assessor’s property was a stone’s throw from ours. Rather than explain the disparity, he slashed our assessed value. The town had to refund to us many thousand $ in overcharges.

A few years later, the initial assessed value suddenly increased by an amount out of line with the market and nearby properties’ assessments. We pointed this out to the town and asked for an explanation. Rather than explain the mistake, our assessed value was slashed. A refund was NOT needed because we IMMEDIATELY caught & corrected the mistake.

A couple years ago, the assessed value again suddenly rose several fold. We again appealed. The assessor claimed the computer program pulled data from the wrong cells in our digital property description. After inputting by hand the correct information, the assessment declined 85%.

This year, the computer program again pulled data from the wrong cells. Imagine that!! The first correction still GROSSLY EXCEEDS our property’s actual value. We are now in the process of correcting the revised value. After we succeed–and we will–the final assessment will be 10-15% of the initial mistake.

The lesson: Monitor your property assessment every year, and be prepared to appeal excessive valuations.

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I’ve been arguing this for years! it’s one of the most insidious taxations out there - punitive actually. Could there be grounds for a 50 State Class Action??

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I’m allowed to appeal every two years, and the reply is “LOL”. Ok, getting 5,000$ knocked off the assessment helps, but it’s a bandaid on a sucking chest wound.

I made a spreadsheet that took the house I paid $65,000 in 2008 (a good deal, but within ‘comparable’ market price), and just took the CPI adjustments to it, and it made it ‘worth’ ~95k last year. In fairness, that is about the price I would buy/sell this house, and not consider it a profit. County/state assessed it at 125k. And the assessment went up more this year. I told them if that’s what it’s worth, they’re welcome to buy it at 90k and sell it for an easy 30k. They did not take me up on the offer.

Houses are not assets. They are liabilities. Assets make money. Liabilities cost money. Houses require upkeep, which since I’m hoping to teardown and rebuild, I am now neglecting. Now yes, everyone needs somewhere to rest, so a house takes care of that, but I view houses as liabilities not assets. A good tenant – now THAT’S an asset!

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“Confirmed by at least one individual in 47 states…”

WHICH 47 states!?

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Show of hands: after watching Mitch, who does NOT have blood shooting out of their eyes?

Mitch sent these:

Criminal Conspiracy to Defraud.pdf (304.2 KB)
Violations.pdf (898.2 KB)
Affordability testing-082624.pdf (147.1 KB)

Here’s Mitch’s site for more info ( if I’m duplicating stuff Chris provided, I didn’t see it so blanket apologies for going full frontal geezer)

Psalm 37 for anyone like me who wants to break arms and legs of criminals. Helps me with perspective.

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Righteous Indignation, at least!

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I wish Mitch all the luck in the world to fight this, but I’m not very hopeful.

What we have here is a predicament, not a problem. There is no solution, just outcomes. The system is not going to jail millions of people involved in and contributing to this fraud. Ain’t gonna happen.

We have to prepare for this system to continue until it spirals out of control in an uncontrolled manner. That’s how complex systems unravel. As a society, we don’t have the right mindset and incentives to manage a controlled demolition of an overly complex system.

Most likely, the property tax racket will continue, but at the end, it’s will force property values down, and make homes unaffordable for most people. It will restrict new home building, unless the homes are much smaller and cheaper than in the past.

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Maybe so. My problem is, I was part of an organization that did the impossible with almost no resources and no rose colored glasses.

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This sounds a lot like book II of “The great taking”.

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