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Thread: Community Ethical Question

  1. #1

    Community Ethical Question

    While I admit we got it pretty good here in Maine, when it comes to taxes we take the brunt. Maine has the highest taxes nationwide when you factor in everything. Anyway our property taxes are high as well.

    Last year we paid 2961 dollars for 402 acres of land, three houses, and a house lot with well and septic. This year it went up to 3900 dollars...pretty darn steep for what little we have. Now of that 402 acres, 100 acres is in open land and is aggressively farmed so we get a discount for being a farm. We also get some homestead exemptions, but that still leaves roughly 300 acres we must pay full tax value on.

    So here is my question. That 300 acres or so is all forested. For generations we have selective cut, planted trees and took care of it generally. Really good care of it actually. Basically its a tree growth system without getting the tree farm property tax exemption. To get that we have to officially apply for it. That means you get 60% off your tax bill, but there are stipulations. You cannot build on that land, deviate from the woodlot plan, or even post the land to keep trespassers off. If you chose to take any portion out of tree growth and sell it, you have to pay the back taxes you were allowed to keep (remember that 60% tax rebate?). It will also require us getting a Forester to come in and do a forest plan, a cost of 1400 dollars or so.

    Anyway I would like to do that as 3 grand a year is kind of steep for just a few hundred acres of rural land in my opinion. I think if my father and I team up we can get a break on the forest plan too because it will be a 2-for-1 deal for the forester.

    Now the ethical part. We live in a small town. If we apply for this and get it, that means our taxes will go down, but the other neighbors will go up to make up the difference. That does not really make for nice rosy neighbor relations. I still think we should do it as we are doing what we are supposed to do with our forest ground anyway, we just aren't getting the tax breaks. My father thinks its unethical to get the government involved in our centuries old family farm and up the neighbors taxes.

    What do you guys think.
    I have no intention of traveling from birth to the grave in a manicured and well preserved body; but rather I will skid in sideways, totally beat up, completely worn out, utterly exhausted and jump off my tractor and loudly yell, "Wow, this is what it took to feed a nation!"

  2. #2
    Join Date
    Dec 2006
    Posts
    535
    Quote Originally Posted by Travis Johnson View Post
    Now the ethical part. We live in a small town. If we apply for this and get it, that means our taxes will go down, but the other neighbors will go up to make up the difference. That does not really make for nice rosy neighbor relations. I still think we should do it as we are doing what we are supposed to do with our forest ground anyway, we just aren't getting the tax breaks. My father thinks its unethical to get the government involved in our centuries old family farm and up the neighbors taxes.
    I'd say take the tax break IF you're comfortable with all the compliance requirements. As long as the break is legitimate, you're not cheating anyone. I'd agree with your dad if you were talking about driving over a pitchfork just before your road hazard on your truck tires was up - but with taxes, I don't think the neighbors' goes up if yours goes down. And to some degree, the neighbors benifit from your family's practice of forest stewardship. I don't think they'd be happier if you clear cut it and developed it

    As to government involvement - they're already involved to a small degree - you have to pay taxes based on how the land is used. I know what he really means though, not wanting to increase the government's involvement. If you lived out here, I'd say don't worry about it, the state's not that bad. But I remember my dad ranting and raving about the land use regulatory comission when we lived in Maine, so I wouldn't be surprised if the situation is still similar.

  3. #3
    Travis

    It seems to me that this isn't an ethical question, the law is on the books and as long as you meet the requirements you aren't being unethical.

    If you were to get the examption and then, for example, sell lumber under the counter for cash, then you would, in my opinion, be acting unethically.

    No knowing about the tax structure, I don't know if it is a foregone conclusion that your decline will mean that other taxes will go up.

    I guess the bottom line if that is indeed true is how would you feel if someone else took the same action on their property? Or, has everyone around you already taken the exemption? In that case, your reluctance to do so could be a subsidy to their taxes!

    I can't remember who said it, but it isn't illegal to pay the fewest taxes you can pay, as long as the determination is legal.

    Jay

  4. #4
    Join Date
    Sep 2007
    Location
    Central (upstate) NY
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    1,452
    You're only being assessed $3900 for 400 acres with three houses??!! Are there any analytical chemistry jobs in Maine? Out here in NY our tax bill for both property and school taxes is close to $2000 for an 850 sq ft house on 1/3 acre and we live in a cheap tax area.

    Back on-topic, just reading your post makes my freedom nerve cringe with all those restrictions. Would it be possible to gently harvest a few trees each year and mill them to sell as lumber to get some extra cash to offset the tax bill? I'd be nervous about locking myself into all of those restrictions. What if Ned moves to Maine and wants to build a shop out there?

    As for the ethics thing, I understand and applaud your concern. My question would be, did the neighbors even read the bills of these tax laws before they were passed? If they did and made some sort of protest that would give me more desire to be concerned for them. If not, I'd give the neighborly concern perhaps a bit less weight in my considerations. It is one thing for a few voices to not win the argument, another thing entirely for there to be no voices at all (except in my head, but that is entirely different! ).

    The impact on your immediate neighbors will be negligible. If it really concerns you, give them each a gift of something made from the wood from your land. Assuming theres more than 2 other people in your tax district, I'd guess that the impact on the neighbors will likely be between $0.50 and $50 annually depending on the amount of population your savings if distributed over. Even that guy that still hasn't returned the lawnmower from 1962 could get some knotty nail infested wood for burning - just don't tell him he's the one doing you the favor by taking it!

  5. #5
    Join Date
    Nov 2006
    Location
    Mountain Home, Arkansas
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    11,697
    First, your taxes sound cheap compared to other parts of the country. One reason we now live in Arkansas is because the taxes for our suburban Chicago community, and surrounding areas, were through the roof. We bought our first home in 1966 for $14,500.00. Annual taxes were almost $1,400.00. That same house today is in the $200,000.00 range and annual taxes are still close to 10% of the value. In other words, you buy a house there then rent it from the government for ten percent of it's value each year.
    Tax-wise, I don't see that you have much of a complaint on all your acreage.
    However, there have been Supreme Court decisions that state clearly it is legal to seek and claim any and all deductions and tax breaks that you are entitled to. Forget the neighbors, let them take care of themselves.
    "Folks is funny critters."

    Think for yourselves and let others enjoy the privilege to do so, too. ~Voltaire

  6. #6
    Join Date
    Oct 2006
    Location
    Tokyo Japan
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    Just to see things clearly, if you make the forest a tree farm and get a tax break for that, what is the difference from the tax break you get from farming the open land?

    You already take a farming tax break, and that does not seem to bother you, so why would the tree farm tax break bother you?

    Just curious is all
    The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.
    William Arthur Ward

  7. #7
    Travis, if you feel comfortable following the rules/laws set down by your taxing authority, then go for it.

    Remember the Wall Street saying, 1) 'do unto others before they do unto you.' Or, 2) it is better to be the 'er' than the 'ee.'

    Finally, we have 4 acres in agriculture for tax purposes and we grow 2 crops of hay per year. We pay a modest $4 per acre taxes on the ag. land. Everyone around us does the same thing. See item 2 above.

  8. #8
    Join Date
    Nov 2006
    Location
    Villa Park, CA
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    1,407
    You should be thankful that your property taxes are so low. I pay double your property taxes each year for a house on a postage size lot.

    But beyond that, there's nothing wrong with following the law. Laws like that are passed to encourage people to do certain things. Just be sure you're willing to do all the things required to get the tax advantages.

    Mike
    Ancora imparo
    Go into the world and do well. But more importantly, go into the world and do good.

  9. #9
    Join Date
    Nov 2006
    Location
    Rochester
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    825
    I agree with Jay...it's not an ethical issue IMHO, it's a tax law issue...one that you're entitled to by law, if you're willing to comply. (not complying and taking the tax break would be an ethical concern.)

    Your concern is admirable, but it opens up all kinds of second guessing on several fronts as Stuart pointed out.

    That said, we pay $5600/yr in property tax for a 1/2 acre with a moderately nice 30 year old house. We also get to pay high sales tax, high state income tax, a mortgage tax , high DMV costs, and countless surcharges and fees for nearly every service purchased or provided by the government....your property taxes sound dirt cheap to me!
    Got Wood?

  10. #10
    Join Date
    Nov 2006
    Location
    Kutztown PA
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    252
    Travis, it boils down to this. It is not your fault the government is in the business of confiscating the wealth of its citizens. If you have a legitimate way to hold onto some more of that wealth you create, then you are right to take it. They are not going to go to your neighbors and tell them they have to pay more because you are now paying less. Of course taxes will go up. Have you ever really seen them go down? I mean overall, not just in one area or another. Taxes always go up, and government always gets bigger. These are rules of society that are almost as unbreakable as the law of gravity.

    The ultimate end of your line of reasoning is Communism - from each according to his ability and to each according to his need. Please understand I am not trying to insult you, just pointing things out from a little different point of view.

    Bill
    Bill Grumbine

    www.wonderfulwood.com

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