Money & Ethics
Property-Tax Relief: Rate Cuts Fairer Than Caps
Plus, a question about non-compete agreements.
By Knight Kiplinger, Editor in Chief, Kiplinger publications
April 2010
- Comments
- Email This Article
- Print This Article
- Order a Reprint
Advertisement
Q: My family recently bought a house in a state that caps the annual increase in property taxes as long as the same owner lives in the house. But when a home changes hands, the years of caps come off. So my home is taxed at a much higher rate than identical homes owned by neighbors who have lived on the block for many years. Do you think this is fair?
No. To my way of thinking, equitable taxation requires an annual assessment of every property at full market value and the application of the same tax rate to each one, with no cap on the amount. Better to provide relief through a rate reduction and to keep financial help for elderly homeowners separate from tax policy.
Q: When I was recently hired by a high-tech firm, among the pre-employment documents I had to sign was a noncompete agreement. I really needed the job, so despite grave concerns about the agreement, I signed it. It seems to bar me from ever working for any other company in the firm's general field. Is this ethical, and can it be enforced?
It depends on where you live and how restrictive the agreement is. In some states -- notably California -- noncompete agreements are generally not allowed. Most states deem them enforceable only for a limited period -- say, one year -- and only to protect legitimate business interests, such as trade secrets and customer lists. In general, I don't think noncompetes are ethical because they prevent people from using their experience in a given field to continue their careers elsewhere. Nor are they necessary. If someone takes his former employer's valuable information to a direct competitor, or aggressively courts its customers, the original employer already has sound legal grounds on which to sue the former employee and his new company for damages.
Send your own money-and-ethics question to Editor in Chief Knight Kiplinger.
- Comments
- RSS
Permission to post your comment is assumed when you submit it. The name you provide will be used to identify your post, and NOT your e-mail address. We reserve the right to excerpt or edit any posted comments for clarity, appropriateness, civility, and relevance to the topic.
View our full privacy policy
Reader Comments (1)
Posted by: Butch Lyons at 03/18/2010 04:32:48 PM
Hog wash. In Calif. back in the 70s home owners were receiving tax bills for double, & even triple what they had payed the year before. Many people were being forced from their homes, especially the elderly. The state & the politicians have no mercy. They will take your home, or force you to sell it. If a family has spent the last 15, 20, or 25 yrs., raising their kids, & living among their friends, this is no small matter for them. Obviously they could not buy a home in the same area. If they could, they would have been able to keep their home. Therefore to find anything they might be able to afford. They would have to move completely out of the area, leaving behind their complete network of family & friends. No small task, & quite heart breaking for many...Politicians do not lower taxes, they raise them! Oh they will make a lot of promises, when they run for office, but your taxes always go up....If there is a 2% raise in taxes, they will shrug it off, as a minor increase. But if they lower taxes by .2% they will claim it is a substantial decrease, & shout it from the highest roof tops. Californians cried for tax relief for years, & it all fell on deaf ears. Now as to young people buying a home, at first glance it appears to be unfair. That you are paying more taxes for the same basic home, as your neighbor. However, even though you are paying more in the beginning, you also know that years down road your tax bill, will not be more than your house payment. It has happened. Also, someday your neighbors home will be sold. At that time the new owners will pay a higher tax than you do. Now if you buy a another home, you can transfer your tax status to it...when you buy a home you can see the cost up front, & decide on what you can afford. You will not be ambushed by the taxman a few years later. I've heard of people decrying the 2/3rds vote needed to over turn Prop. 13. Most of the people do not own their own homes. The politicians have no problem with divide & conquer, it becomes quite simple. Do I vote for a tax on me, or do I vote for a tax on them? It allows the people to dump a lot of their taxes on the home owners, who are not allowed to fight back. Most property in the state is owned by the government. Most large industry have gotten huge tax breaks as incitements to bring their companies here or to keep them here. So given the opportunity the poiticians try to load it all on home owners.