Community Ethical Question

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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.
 
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 :eek:

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.
 
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
 
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? :rofl:

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! :rofl: ).

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! :D
 
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.
 
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 :wave:
 
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.
 
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
 
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 :mad:, 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!
 
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
 
Like most things, there is a lot more to this issue than what I can type in a single starter thread even though that thread starter was quite long.

The reason why I don't have a big issue taking the Farming Incentives deals mostly with the age of this place. We have farmed here since before this nation was a nation. Most of our neighbors have Deed's that if traced back far enough either have Johnson on them, or Amsden. The Farm Incentives date back so far that it never raised any taxes for the neighbors. They moved in afterwards and thus had their places appraised and taxed accordingly.

Another reason is purely pride I guess. Only 2% of the USA are farmers, yet we provide 100% of the food for this nation, and many other nations to boot. Its interesting to note that while many people on here are not from Maine, you probably still drank some milk that came from our cows. We supply milk to Agri-Mark which makes a lot of powdered milk. If you have ever gone into a fast food resteraunt like McDonald's and had a milkshake, you probably had milk that came off our farm. That's a long way of saying our farm...and our farm land tax reductions, help a lot of people. That is why I don't feel too guilty about taking that money.

Its kind of ironic really, I have not gotten paid for the rent on my crop ground for three years now. I have considered getting another farmer to take over the fields but around here, farms are going under. There are plenty of hippy type farms, 20-30 acre Alpaca farms and stuff, but no one would could take over 100 acres and do proper crop rotationand fertilization. In fact I already converted 12 acres of crop ground to trees because of lack of crop ground use. The thing is, if I kick this farmer out for failing to pay, I will lose my crop ground incentive, lose my farm status and pay even more taxes. In the end its just best to let this farmer keep farming it...yes for free...and let the benefits outweigh the money. (Lower taxes and having a viable, working farm).

Please, don't take this as whining, but land ownership is a privilege, but can also be a pain. I work a full time job, am trying to build an addition, trying to keep my property maintained, must control the amount of hunters using the place, as well as trying to keep ATVs and whatnot from the destroying the crop ground, keep drug growers from using the land, all while trying to raise an infant. Well you get the idea. Its never ending, or easy for that matter. A lot of things to juggle.

And that is just the crop ground.
 
Now the forest ground is a bit different. We have never got anything for that in the way of a tax reductions. Generally we took the money we got for renting our crop ground to help pay the taxes every year. If you read my last post, you know that is not happening anymore so it means money right out of the savings account to pay the taxes.

We could harvest some timber and sell it to help pay our taxes, and have done that in years past. Time to do that is an issue right now for both my father and I, but ultimately we will have to do that. Its interesting to note that if we do go ahead with the Tree Growth plan, we will have to follow a plan that will require some harvesting.

Generally speaking the rules don't scare me. We have always harvested properly, and we allow for recreations like snowmobiling, ATVing and hunting and fishing. We do try to limit who is toting guns out behind our house, but that is just common sense. Overall we do what the Tree Growth asks anyway, we just don't get the tax incentives.

As for how it effects our neighbors, it will impact them pretty good. Around here we do things a bit different. We don't assess property on a percentage or curve. The town has x amount of dollars, say 1 million in expenses. It must tax to get that amount of money. That may mean your neighbor has an identical size house but pays twice as much as you. It may mean you pay more. As new houses are built, the taxes go down because there is more tax money per expenses paid out. Its a year by year thing as those two change.

Lately there have been a few houses built so our taxes went down. Now that a big employer went out of business, houses are all up for sale and no new ones being built. That means as the town expenses creep up, well same tax payers have to ante up more money for the same house.

Now imagine if my father and I decide to join the Tree Growth System (which by the way is different from the Tree Farming System). I did not make it very clear, but I have 402 acres, my father has far more. It will be something like 1200 acres if we combine all this forest ground into the tree growth system. That is a fair amount of taxes that will be lost.

The way that works is, we get 60% off our taxes as long as we abide by the rules. Since a sizeable chunk of land will be reduced by 60%, the other taxpayers will have to pay the difference. The State of Maine is supposed to help pay some of that back to the town since its their program, but that never happens. That is why my father has such an issue with this. Since this town is very small (pop 337) its going to make a pretty big impact.
 
Travis, that's an interesting scenario. You have a complicated situation there. The farmer not paying his rent strikes me as someone who is taking advantage of the laws unfairly. Yes, we need to keep our farmers in business. I have conflicted views about the 'hippy' farmers. The concept of farming in America may be changing and there might be a place for the small acreage enterprise. Better them than housing subdivisions.
 
Travis,

Unless I am missing something, if you do decide to take this tax break, it will be an insiginficant burden on your community.

Let's review, your taxes last year $2961 v $3900 this year.

Population is 337

you are seeking a reduction on just one part of your property tax, that being timber ground.

Even if you taxes went to zero, each of your neighbors would be paying an additional $10 and some change.

Even if you save $1000, that makes the burden to the rest of the community something like an extra $3.

These tax break rules are their for you to use. If your local tax assessor and local govt didn't want you using them, they would not have implemented these tax breaks.

Joe
P.S. Your taxes seem pretty low compared to mine. I also live in a small town.
 
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