The TL had a very heavy south Indian accent which I am sure many would find easy to relate to after reading through the following dialogue:

TL: Hello… Hello…
TM: Hello.
TL: Why aren’t you picking my call??
TM: Sir I just did.
TL: Not now I say.. I called you yesterday on your mobile… didn’t you see my missed call??
TM: Sorry sir, I didn’t notice.
TL: What??? You didn’t notice my missed call, but you notice the missed call of others is it?? I also called at your desk yesterday?? Where were you??
TM: Sir…
TL: I also sent you a mail. Why you didn’t respond??
TM: I was busy sir.
TL: What?? You are telling that you don’t have even one minute for me?? [This sounded weird..,]
TM: I had too much work to complete sir.
TL: Where are you now??
TM: At my desk sir.
TL: You were on leave on Wednesday right?? What happened??
TM: Sir, I was not well.
TL: Really not well or simply simply??
TM: Really sir.
TL: So your friend put down her papers is it??
TM: Yes sir.
TL: She was the brightest in your team.. now too much work on you only.
TM: Yes sir.
TL: So where is she going??
TM: I don’t know sir.
TL: Now see here, don’t tell lies to me. She was your close friend na… you should know everything. Do you have her personal mail ID?? Was she married??
TM: No sir.
TL: Ah!! Probably her parents are getting her married to a guy in some other company. That’s why she quit.
TM: Maybe sir.
TL: People don’t understand that if they marry within the company they can spend more time together. Why search for someone outside the company??
TM: [Silence for 2 seconds]
TL: So who else is planning to put down their papers??
TM: I don’t know sir.
TL: What about you??
TM: Sir I have some work to do.
TL: Talk to me properly!!! What is this attitude?? Is this how you speak??
TM: [Silence for 2 seconds]
TL: You people like to party too much… You didn’t forward me last week’s snaps.
TM: I didn’t go to the party sir.
TL: OK.. OK… and don’t call that Anuj to your parties… He is always trying to impress you people.
TM: [Silence for 2 seconds]
TL: So when are you going to meet me?? [Now this sounded absolutely weird]
TM: Sir, today is a Friday and I want to leave early.
TL: Why?? You have to go to a movie aa?? Or someone’s birthday today??
TM: No sir.
TL: Look don’t give me reasons… I will send you a meeting reminder when I reach office. Don’t forget to accept it.
TM: OK sir.
TL: OK bye.
TM: [Hangs up the phone]

—————————————————————————————————–

Couple of take-aways for me from the above incident:
1. Although the above dialogue sounds hilarious, it actually brings to light some glaring problems in the industry.
2. The rapport of the team lead with his team members was not conducive to say the least.
3. The team lead felt he was absolutely right in asking what he did.
4. The team lead was too intrusive and his tone was extremely domineering.
5. It wouldn’t surprise me if the team member quit or even if the project were in shambles.
6. Things had gone way off the track and I presume the middle management was sleeping all the time.
7. I could also sense that the organisation did not have any feedback mechanism where a team member could anonymously raise an objection or submit a grievance.

Like any municipality, Tinyville has expenses: police & fire departments, schools & libraries, water & sewer, sanitation workers, judges & clerks, engineers & inspectors, tax assessors & collectors, officials, and secretaries.  To keep the math simple, let’s imagine that Tinyville’s annual budget is a mere $100,000, and that it has no other sources of revenue (such as parking meters, local sales or income taxes, or hunting/fishing permits).  In order to meet its annual expenses, Tinyville’s tax assessor divides it’s $100,000 of budgeted expenses (known as a total tax levy) among each property owner by their proportionate share of the $2.5M total assessed value of the community.  Dividing $250,000 by $2.5M means that each house is responsible for 10% of Tinyville’s property tax levy.  Each homeowner (or their mortgage bank) gets a tax bill for $10,000.

For years, everyone is happy in Tinyville.  The families each have kids in Tinyville’s schools, they march in Tinyville’s parades, and compete in Tinyville’s pie eating contests.  In the natural course of events, two of the original families were more prosperous than others and moved into better digs in Mediumville, one retired to Southville, one got transferred to his company’s office in Westville, and one died in a tragic car accident, but their heirs in Bigville didn’t want to move back to their family homestead.  Anyway, five of the homes went on the market and because the market had been doing well for the past several years, four were sold for $300,000 … except the one belonging to the heirs of the deceased couple – they let the house fall into disrepair, stopped mowing the lawn, and eventually squatters moved in and started trashing the place.  When they finally sold it as a “handyman special,” they got $150,000 for it.

Before any year’s tax assessment becomes “final,” it is sent to each homeowner to review.  Each homeowner has an opportunity to dispute their assessment.  The five original homeowners continued to be assessed at a rate commensurate with their $250,000 property value, and knowing that many of their neighbors sold their homes for $300,000, they silently accepted this assessment.  The four new owners who paid $300,000 each are also assessed at $250,000.  Strangely, it is illegal for a municipality to perform a “spot assessment” of individual properties so although the “fair market value” of those four homes has increased by 20% since last appraised, they continue to be assessed at $250,000 each.  The tenth home, purchased by the handyman for $150,000, is also assessed at $250,000, but he disputes his assessment.  He argues that the fair market value of his home should be based on his recent purchase price, and through the various legal methods at his disposal, he has the house reassessed at $150,000.

Assuming the total tax levy is unchanged at $100,000, what happens to each homeowner’s property taxes?  Nine of the ten houses are still assessed at $250,000 each, but the last is now assessed at only $150,000.  One might quickly (and incorrectly) guess that the houses with unchanged assessed values would have no change in their $10,000 property tax bill, and that the tenth house would pay just $6,000, but that doesn’t add up correctly; Tinyville needs to collect $100,000 in taxes to balance its budget, and this formula only adds up to $96,000.  What actually happens is that the denominator changes, too.  Tinyville’s total assessed property value is recalculated based on each property’s assessed value, and now adds up to just $2.4M.  That means that each of the $250,000 houses now accounts for just over 10.4% of the total, and is now responsible for that percentage of the $100,000 levy, increasing each of their assessments to $10,417.  The handyman’s $150,000 assessed value accounts for 6.25% of the total, so he’s now responsible for just $6,250 of Tinyville’s tax levy.

Some (including the handyman) would argue that the handyman’s house is worth less, and consequently, he should pay less tax than his neighbors.  Others (including his neighbors) would argue that his house is the same size and shape, takes up as much land, and places the same demand on Tinyville’s police, fire, schools, libraries, sewers, and other services, and that he should pay the same amount as the other houses.  Some (including the original five families) would argue that the resold houses should be assessed at their new, higher market values, and that the new owners should pay proportionally more taxes.  Others (including the four new owners) would argue that the fair market value of their homes as evidenced by their sale prices is indicative of the actual fair market value of the five unsold homes, despite the fact that those homes haven’t recently changed hands.  These are the sort of issues that confound homeowners and plague tax assessors, assessment review boards, and courts in every municipality, every year.

In a perfect world, when the handyman files for building permits to repair and restore his home’s value, the new value he creates by the work he does should bring his tax assessment back in line with the other comparable houses, thereby reducing his neighbors’ percentage of the total tax, accordingly.  Unfortunately, not everyone applies for building permits, and not every project even requires building permits.  Upgrading your kitchen appliances improves the value of your home without requiring building permits.  Many municipalities don’t require a building permit to add a new layer to your roof or to retile your bathrooms.  Of course, there are also homeowners who build bedrooms in attics or lofts over their garages without permits, and not every new home buyer is savvy enough to realize that they are paying for such unpermitted improvements.  If you complain to the tax assessor that your neighbor has an unpermitted finished basement, the tax assessor doesn’t have the same authority as a building inspector to knock and demand to see that basement so as to tax them appropriately.  …and not every building department inspector is willing to perform inspections on an anonymous tip, so you may have to go on record as the guy who ratted out his neighbor.  Consequently, a lot of home improvements are not reflected on the tax assessment rolls.

Since buying a home in a market downturn gives you the ability to grieve your tax assessment based on its new apparent fair market value, other home owners can actually use your new “fair market value” to argue that their house is comparable to yours, and that their assessment should be lower, too.  This creates added burden on the assessors as they try to determine new values of homes that haven’t recently sold based on evidence created by comparable homes that did.  As more and more homeowners grieve their assessments, it reduces the denominator in the municipality’s total assessed value, increasing the actual tax bills for houses for which assessments haven’t been grieved.  Naturally, that reinforces the process, inciting more and more homeowners to grieve their taxes, creating more and more work for assessors.  However, taken to the unimaginable extreme, in a community where home values have fallen, it may take a few years for all of the homeowners to realize that they are being unfairly assessed (as compared to his neighbors), but ultimately, when the last of them finally grieves his taxes, everyone’s proportion to the new denominator should be comparable to their proportion of the pre-decline denominator, meaning that they’ll all on average, eventually pay just about as much tax as they did before.  In the intervening years, the ones who got onboard first and had the largest and earliest reductions in their assessed home values will reap the greatest short-term benefits.  Some would go as far as to argue that this is fair, like so many other instances in life when the early bird gets the proverbial worm.

The intervening chaos and disparity, however, causes more work, thereby costing municipalities more in assessments, review boards, and grievance hearings.  In the worst cases, when grievance processes fail and are left for courts to decide, municipalities have to pay unanticipated refunds to vindicated homeowners, which reduces their immediate coffers and further increases tax levies in subsequent years to make up for those losses.  For those scholars of economic theory, Keynes would argue that these machinations are a necessary and productive part of the system, and that they employ lawyers who otherwise would earn less; these lawyers rent offices, hire staff, and buy office supplies, and in effect, keep the economy’s wheel turning.  Hayek would retort that these legal costs do not so much enrich the system, as they do redirect capital that would have been employed elsewhere, such as the tax savings permitting the homeowners to buy new furniture, hire a gardener, or take a vacation.  He would consider these inefficiencies in the tax assessment process an unnecessary cost that allocated resources in a less-than-optimal manner … and I’d tend to agree with him.  I don’t know what the solution is, but I know that we should try to come up with one.

About the Author

Brian Blum is the founder and operating manager of Maverick Structures LLC, a real estate investment, rental, and management firm concentrating on multi-family residential properties in the New York metropolitan area.

People developed into groups to form governments in Rome to establish rule. It was there that the first democracy formed.

America

The American government took form in 1776 and there the Constitution was born. A society based of liberty was established.

Congress

Congress is a state of being that is based solely on the reactions of the people of this country. A person has the liberty to do anything they desire as long as it does not harm another. When something goes wrong Congress reacts and creates a law. When we do find establishment we also find laws. Congress as it is named, Con- the opposite of pro means bad, and gress- a motion that a person makes. Congress then means bad motion of the people. Congress therefore acts after a bad motion has gressed and makes laws of them.

Liberty

The liberty is here and so is the hoax. One, with government has to find the perfect state in order to be free from the hoax. Man? What is he? The wave of culture is broad. People now days have a choice in this country. There is no hurry. One must learn the rules of the game before one plays. We have a liberty in this country, and we must keep it.

Peace

The First Amendment is the template of peace. It is all together one long sentence which declares peaceful redress of grievance to the government. With this in its meaning the government is the people. The people must grieve to each other in a peaceful manor. This Amendment doesn’t mean the freedom of speech which a person can say or speak anything. This Amendment says we only have then freedoms in a peaceful redress of grievance to the people, our government.