Imagine the perpetual loan, a loan that no matter what you do, you can never pay off. To help conceptualize the idea, think of it as a perpetual interest-only loan in which you are forbidden to completely pay off principal.



As preposterous as that deal may sound, it is highly likely you are in one.



If you own a house, you are in exactly that deal, except it conveniently not called interest. Instead it's called a property tax.



This is a post I have been meaning to write for years. However, I was finally inspired by a reader "Russell" who writes ...



Hello Mish



Here's a heads up from Portland Oregon. The city is proposing a property tax hike of 15 percent for the May ballot. Currently, most of the current city property taxes go towards police and firefighter pensions.



This proposed hike is "for the kids", threatening teacher layoffs. I assume this is the first of many hike attempts that we will be seeing in the near future.



Do we really own our property? I say we don't. We basically have a note that we can never pay off from the government. I will now have to pay around 550 a month for the right to own my house.



Isn't that like a 100,000 dollar note that can never be payed off? Why own property in these cities? Why live here? That is what my wife and I are starting to face. We like our neighborhood and the city in general, but if may be time to leave.



Thanks again for all that you do (that you can put this kind of content out daily blows me away),



Russell

Portland Seeks Two Tax Hikes

The Portland school board voted 6-0 tonight to put a second tax hike before voters in May, saying a higher operating tax is needed to save 200 teaching jobs in Portland Public Schools.



If voters say yes, the local-option property tax set aside to bolster Portland schools would rise to $1.99 per $1,000 of assessed property value, a 60 percent increase from the current $1.25 per $1,000 voters approved in 2006.



It is the second tax increase the school board has referred to the May ballot. The first was a record-setting $548 million school construction bond that, if approved, will cost property owners $2 for every $1,000 of assessed property values for the next six years.



School board members said that financial hard times for families make this a tough time to ask property owners to pay more.



But they said cutting more than 400 teachers, rather than about 150 as would be necessary if the levy passes, would be too harmful to students and to the local economy.



"We are talking about protecting family-wage jobs in Portland," board member Bobbie Regan said.

Tell Bobbie Regan to Stuff It

Compute Your "Endless Note" Interest

Why Own a House?