True story: Harold & Maude are a forty-something couple with two teenaged kids. Both are educated, both work in IT, both are fairly sophisticated, financially speaking.
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| The Road to Hell, by Paul Stevenson. |
Back in 2003, they bought a vacation condo, in Mono County, California—you know, where Mammoth Lake and the Mammoth ski resort are located, right next to Yosemite National Park. They bought the condo in mid 2003, then flipped it later that same year—they closed escrow the first week of 2004, with every t crossed, with every i dotted.
They went on with their lives: Work, vacations, kids, school, job, carpool—same-old-same-old, just like millions of other ordinary citizens.
It was from the Department of Finance of Mono County, informing them—in bold and capitalized letters—that they owed a “DELINQUENT AND UNSECURED PROPERTY TAX”.
The letter went on to inform them that they owed—in bold, italicized, underlined and oversized lettering (I’m not kidding)—$845.99.
Guess the letter had to put the figure in bold, italicized, underlined and oversized lettering so as to make it really clear how much was owed—and to whom!
Be advised, a lien has been filed, said the letter in conclusion—in oversized bold lettering. Since they no longer owned the property, Harold and Maude weren’t sure what the county had put a lien on—if not their former vacation condo, then their current home? Their children? Their souls? Who knows—just that something had a lien on it—so you better pay up, buster! Now!
Or rather, Now!
Lucky Harold and Maude are pack rats—they had all the documentation of the purchase and sale of the vacation condo. After all, they had sold the condo over seven years before.
But when they dug up all the paperwork, they saw that the sale had been done properly and without error. Everything in order, no missing documentation—all taxes paid—escrow closed properly: Everything legit to the last dot. I saw all those documents myself—everything was copacetic.
So they called the Mono County Finance Department—
—and got quite the surprise.
Turns out that in August 2005—18 months after they closed escrow on the sale of the property—the Mono County tax assessor filed an “adjustment” on the property value of the vacation condo they no longer owned.
Based on this “adjustment”, they were found to owe $430 for the seven months that they owned the condo back in 2003. What’s more, since they failed to pay it, they now owed an additional $415 in “penalties and late fees”.
The U.S. Constitution, if you’re curious, is very clear on the issue of retroactive taxation. Article 1, Section 9, Clause 3 states:
No Bill of Attainder or ex post facto Law shall be passed.Furthermore, Article 1, Section 10, Clause 1 reaffirms the prohibition on ex post facto laws—including ex post facto taxes.
But an ex post facto “adjustment”? Well, the Constitution seems pretty vague about an adjustment—or at least that’s what the California Revenue and Taxation Code seems to think, and would have us all believe.
An error or an omission described in subdivision (a) which involves the exercise of an assessor's judgment as to value may be corrected only if it is placed on the current roll or roll being prepared, or is otherwise corrected, within four years after July 1 of the assessment year for which the base year value was first established. [emphasis added]
So in other words, an “adjustment” can be made four years after the tax was assessed.
If a correction authorized by subdivision (a) or (b) reduces the base year value, appropriate cancellations or refunds of tax shall be granted in accordance with this division. If the correction increases the base year value, appropriate escape assessments shall be imposed in accordance with this division.Oh, great: So if four years ago the tax assessor made a mistake and charged you too much, you get a refund. That would seem to balance things out, Karmically speaking, now wouldn’t it?
Question: How often do the tax assessors give out a refund? And then how often do the tax assessors—as in the case of Harold and Maude—claim that they are owed more taxes?
Maybe it’s just the natural born cynic in me, but I’m guessing refunds are rare—more taxes the norm.
Harold and Maude argued over the phone that they were no longer owners of the condo—they hadn’t been the owners when the tax assessor retroactively “adjusted” the tax. So why should they be made to pay for something after the fact? Patent bullshit.
Nevertheless, Mono County insisted—and it turned out, they had filed a claim which appeared on Harold and Maude’s credit report.
Since their credit was perfect—and since they had sold the condo in 2003—neither had really paid attention to the notice on their credit report. They simply assumed it was a mistake—because after all, they had sold the property, and the only way to close escrow on a property in California is if all taxes on it have been paid beforehand.
They were now getting an education.
They argued with the county, back and forth and back and forth, and in the end, Harold and Maude made a cold hard calculation, and then decided to do the rational thing:
They paid the “adjustment”.
Of course the “adjustment” wasn’t right or fair. But from Harold and Maude’s point of view—that is, from the point of view of a couple of ordinary people who just want to get on with their lives—it made complete sense: They paid the “adjustment” because it was less costly than paying the lawyers to fight this bullshit.
After all, saying “Hello” to a decent attorney costs $5,000. Taking this all the way could easily run $15,000 or $20,000. And of course, there was no certainty of winning: The judge might simply cite California’s tax code—which so casually goes around the Consitution—and leave it at that.
What then, appeal the decision? Another twenty-thirty-forty grand in legal fees—and even if against these impossible odds you actually wind up winning, what do you get?
A waiver on an $845 shakedown?
They realized it was easier to simply pay the “adjustment” and put it behind them—which they did.
But the question for all of us should be, How often is this sort of shakedown happening? Because it is a shakedown—there’s really no other way to look at it.
How many counties and municipalities and States are doing what Mono County did—acting no better than thugs? Especially now, after they got themselves in the nightmare fiscal situation most of them are in—how many are retroactively charging taxes, fees, levies, and then going after innocent citizens they are supposed to serve with threatening letters and the real possibility of a legal nightmare? How many counties and States are using the threat of damaged credit reports to squeeze out a few miserable more bits of money from the people—laws and Constitution and basic morality and decency be damned?
My guess is, A lot.
Is this how a government of the people, by the people, for the people is supposed to work? By using the law to extort the citizenry? By retroactively charging them “fees” and “adjustments” that are obviously unfair, immoral, and flat-out un-Constitutional?
The word “un-Constitutional” gets tossed around a lot—but here is a case where it is literally un-Constitutional. The Constitution says so right in its first Article! “No Bill of Attainder or ex post facto Law shall be passed.”
But like so much of American life, these Constitutional guarantees don’t mean squat if the leadership is willing to overlook them, or run roughshod over them—as California clearly is.
I don’t blame Harold and Maude for acquiescing—they’ve got two kids they’re about to send to college: They can’t afford to bleed themselves dry over an $845 nuisance.
But then where do we draw the line? When will we draw the line? At random “security checks”? At invasive, needless and pointless gropings at the airport? At government-sponsored torture of foreign citizens? At government-sponsored torture of American citizens? At illegal imprisonment of dissenters born on American soil? At the assassination by the government of its own people? Because this is all happening in the United States today. . . .
. . . which actually makes me realize: A little shakedown is no big deal, in the grand scheme of things. In the grand scheme of things, America is fucked—Harold and Maude’s little story of legal graft is just one more bit of gravel on that road to hell.
And we’re all going along on that ride. Tell me when it gets hot enough for ya.
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