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Struggling Real Estate Developers May Get Power To Tax You

Posted By admin || 12-Feb-2009

Along the lines of the strange and perhaps outrageous, there's an article in the Dallas Morning News reporting that the Dallas City Council is considering (today 2/11/09) giving real estate developers the power to tax Dallas-Fort Worth residents. That's not a misprint.

The article said:

The plan to create special taxing areas, known as municipal management districts or MMDs,... Under the plan crafted by the city, just 65 percent of landholders in a given area would need to sign a petition to apply to become an MMD. And once the petition was issued, a simple majority of those landholders could vote to create the MMD and seek the required approval from the City Council and Texas Legislature. Such districts potentially could place significant new tax burdens, in addition to regular municipal taxes, on property owners who never asked for it and don't want it.

This is how it would work:

A group of landowners (65%), also known as DEVELOPERS in your area decide that they want to create a MMD. If the MMD is approved, they (the real estate developers) can tax everyone in the district, including individual homeowners, many of which are already facing foreclosure and are otherwise financially burdened.

This tax would be in addition to any other taxes the people living in that "special tax area" pays. But not just that, the developers would get a cut of the money as the article points out.

"It's a good tool for us to use because it creates a funding source for the development community at rates below what they would normally be able to receive" through private financing, said council member Ron Natinsky, chairman of the council's economic development committee.

Exactly! A funding source for the development community. Right, that's we thought. Let's think about this for a minute, just a few days ago we talked about how the IRS is giving taxpayers facing bankruptcy more options regarding paying delinquent taxes, we've talked about how many homeowners are facing foreclosure and home many Americans in all walks of life are facing bankruptcy.

How are these people going to pay an additional tax? Is this going to prevent more homeowners from facing foreclosure and bankruptcy or likely increase the number? Plus, who elected developers and gave them the power to levy taxes? That just doesn't sound right.

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