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70112 : Real Estate Advice

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Fri Aug 1, 2014
lugiebaby asked:
I'm a Safety Ranger who has located to the New Orleans area and would like to find housing in the downtown/cbd area to be close to my office.
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Tue Jan 12, 2010
Grace Hanamoto answered:
Hello Hurshid and thanks for your post.

As Dan noted below, taxes are the local, state and federal government's method of obtaining income necessary to run the community services such as police, fire department, trash, utilities, street sweeping, road maintenance, etc. Without tax money, such projects would be severely underfunded and would result in loss of maintenance work when needed.

While most people pay only income taxes on the money they earn each year, local and state taxes must be supplemented by additional income since the funds from the federal government is not usually sufficient to cover the expenses. To supplement the State, City or County's coffers, there are taxes on "use" of certain products or services. In most cases, there is a prevailing thought that "luxury items" (such as homes, cars, big screen televisions, etc.) are bought by people who can usually "afford" to pay more money in taxes, so there are additional fees for these items. For property purchases, for example, a homeowner would pay for transfer taxes (the right to buy the home, like a sales tax), recording or stamp taxes, property taxes, and even supplemental property taxes. If you think the taxes imposed on the regular home buyer are bad, you should see how cities, counties and even states tax, tax, TAX a developer who is planning to build a home in a community. As much as 5 percent of the cost of the home can be attributed to taxes paid by the developer for schools, water, streets, land, and "right to sell property" in the community.

So, as noted below, taxes are a way to pay for municipal services provided to each community member for "free."

I know it doesn't help to know "why" we're taxed, but take some comfort in knowing that we are all similarly irked by having to pay so much money in taxes for the purchase of everything from a pack of gum to a home or car.

Grace Morioka, SRES
Area Pro Realty
San Jose, CA
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