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PolitiFact? More like "PolitiFraud!"

In an article posted on the Politifact webpage, one decisive claim exposes the website as a complete fraud.

The reader can find this dubious claim in the organization's article regarding California's taxes, in which the editorial nitpicks Travis Allen, a Republican member of the California State Assembly, for his unequivocal remarks characterizing California's taxes as ranking "among the highest in the nation."

Despite the apparent concession that Allen's statement is mostly true, the writer of the piece then misleadingly concludes: "Notably, [California] does not have one of the nation’s highest property tax rates, at 36th highest."

The only type of academic who could posit this claim is one who intends to focus the conversation on meaningless rates and doesn't understand how common $10,000-per-year property taxes are in the most populous parts of the state: the San Francisco Bay Area and the Southland. First, the artificially-high costs of living in both areas remain a function of artificially-high rents and, thence, artificially-high home prices, which then equate to artificially-high mortgages. Of course, the bulk of this remains a function of artificially-low interest rates and, thus, artificially-high volumes of debt chasing ambitious returns in the midst of an enduring information technology craze, surrounded otherwise by only an abundance of non-income-generating healthcare, government and related non-profit work.

In his misguided piece, the Politifact writer commits the popular error of focusing on the value of property taxes as measured as a percentage of the homes' appraisal values, instead of centering the discussion around the raw values of property taxes across the nation. Indeed, if comparing the real estate market of the San Francisco Bay Area to that of Detroit, one will surely discover that Detroiters are paying more in property taxes relative to the value of their homes. This latter distinction comes into play when considering the fact that people pay in dollars, not in rates.

In this sense, it is not necessarily imperative to compare rates of taxation in order to declare one state or region a high-tax area. In this particular case, the former metric appears only to obfuscate the conversation.

Let's examine Oakland, California, the center of the Bay's so-called working class or blue-collar community. I italicize these terms only because they contrast so sharply with their original definitions. Whereas the terms once applied to men and women working in toilsome low-skilled labor, it appears to apply today to the same types of people and to yet others who subsist from purely less productive or wholly unproductive work, or to still others who do the same while relying largely or exclusively upon government subsidies. Let it be known that these people represent neither the real working class nor the blue-collar community, but rather a sorry substitute for the ethics and tireless efforts which preceded them.

The median home price in Oakland, California, hovers around $747,100, whereas the city's median household income rests around $68,000: this translates to a price-to-income ratio of approximately 11:1.

Compare this to the city of Detroit, Michigan, where the median home price has recently surged to a cool $39,000, where median household income comes in around $26,000, and we find a ratio of 1.5:1, a far cry from the sobering ratios of the San Francisco Bay Area.

Not only are homes more expensive in the San Francisco Bay Area, but both raw and relative property taxes are appreciably higher in the Bay than in Detroit.

For comparison's sake, let's consider a tech CEO who nets $1 million per year, compared to a Ford factory worker who nets $41,000 per year. Let's assume that the Ford worker decides to purchase a new F-150 truck, fully-loaded with all the bells and whistles. Let's assume that, with his employee discount, he gets the vehicle off the lot at an all-in price of $35,000. Let's then assume that the CEO walks into the dealership to negotiate his way into a fully-loaded F-450 for an all-in price of $100,000. Both customers have effectively purchased beautiful, brand-new vehicles for significantly different prices. The fact that the price-to-income ratio for the Ford worker is roughly eight and a half times that of the CEO is of no material consolation to the CEO who must pay that more-than-nominal price difference. The fact of the matter is that the F-450 is categorically more expensive than the F-150, just as property taxes in the San Francisco Bay Area are more expensive than in nearly every other city and metropolis across the United States.

Taken a step further, the fact that the F-450 is priced at roughly 2.4 times the price of the F-150, or the fact that the former is listed $65,000 above the latter, fails to render the $3.49/gallon gas in Oakland any cheaper than the $2.51/gallon Detroit variety.

The fact is this: just as the more expensive vehicle fails to render the more expensive gas any cheaper, so too does the more expensive house fail to render the more expensive property taxes any more affordable.

Measured against this final conclusion, California and, more specifically, its most populous regions are not only ring leaders in the high crime of taxation, but they are also guilty of some of the highest property taxes in the country. The fact that those taxes are relatively minor compared to the total cost of homeownership is neither material nor reassuring to the homeowners responsible for making the payments.


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