This is Chelsea Koetter & her sons. A few years ago, she accrued a...
Billy Binion@billybinion
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Aug 31, 2024
~2 min read
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This is Chelsea Koetter & her sons. A few years ago, she accrued a small property tax debt.
So the government seized her home, sold it—and kept the $102,636 profit.
The Supreme Court said this practice is illegal. But some states are subverting that. A thread.
So the government seized her home, sold it—and kept the $102,636 profit.
The Supreme Court said this practice is illegal. But some states are subverting that. A thread.
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Koetter, who is a single mother, fell behind on her 2018 taxes. She owed $1,199.59.
With all penalties/interest/fees, her debt came out to $3,863.40.
To collect that, the government auctioned off her home for $106,500. It gave her nothing in return. /2 reason.com/2024/07/26/she…
With all penalties/interest/fees, her debt came out to $3,863.40.
To collect that, the government auctioned off her home for $106,500. It gave her nothing in return. /2 reason.com/2024/07/26/she…
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This is Uri Rafaeli. He accidentally underpaid his property taxes by $8.41.
So the local gov't seized his home—which was worth about $130K—sold it, and left him with nothing. Over an $8.41 debt.
So Rafaeli sued, alleging the practice was unconstitutional. /3
So the local gov't seized his home—which was worth about $130K—sold it, and left him with nothing. Over an $8.41 debt.
So Rafaeli sued, alleging the practice was unconstitutional. /3
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He won. The Michigan Supreme Court ruled that the government can't take more than what a person owes.
Chelsea Koetter is also from Michigan. So, in theory, she shouldn't have lost all of her equity.
But lawmakers found a creative way to get around the court's ruling. /4
Chelsea Koetter is also from Michigan. So, in theory, she shouldn't have lost all of her equity.
But lawmakers found a creative way to get around the court's ruling. /4
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Michigan lawmakers created a convoluted, yearlong process that sends people on a wild goose chase if they want their equity back after the gov't takes their home.
Koetter submitted a form 8 days late. For that, the state left her homeless & penniless. /5 reason.com/2024/07/26/she…
Koetter submitted a form 8 days late. For that, the state left her homeless & penniless. /5 reason.com/2024/07/26/she…
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This is Geraldine Tyler. She fell $2,300 behind on her taxes. So the gov't seized her condo, sold it, and—you guessed it—kept the profit.
So she appealed to the U.S. Supreme Court—and won. There should be no more stories like hers then, right?
Well.../6
So she appealed to the U.S. Supreme Court—and won. There should be no more stories like hers then, right?
Well.../6
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After the ruling, several states followed in Michigan's footsteps, creating difficult processes that comply with the Supreme Court's decision in theory but not in practice.
The processes are complex for a reason: They set people up to fail so the gov't can steal their equity. /7
The processes are complex for a reason: They set people up to fail so the gov't can steal their equity. /7
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This is Joe Richardson. He leads a nonprofit dedicated to a Baltimore neighborhood where many are in poverty.
The org fell $2,543 behind on its taxes.
The city auctioned off the debt to a California investor for $5,115. The investor sold the space for $139,500.
And then.../8
The org fell $2,543 behind on its taxes.
The city auctioned off the debt to a California investor for $5,115. The investor sold the space for $139,500.
And then.../8
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The investor sent the nonprofit a check for...$2,572. That's it.
So a group dedicated to helping a community riddled with poverty no longer has its biggest asset: its home.
A lot of folks think this stuff isn't happening anymore. It's still happening. /9 reason.com/2024/08/19/bal…
So a group dedicated to helping a community riddled with poverty no longer has its biggest asset: its home.
A lot of folks think this stuff isn't happening anymore. It's still happening. /9 reason.com/2024/08/19/bal…
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Imagine having your life savings seized over a small debt. A total nightmare.
People lose jobs, get sick, fall into poverty. Life happens. And some governments are using people's hardships as an opportunity to profit off of them.
It has to stop. /end reason.com/2024/07/26/she…
People lose jobs, get sick, fall into poverty. Life happens. And some governments are using people's hardships as an opportunity to profit off of them.
It has to stop. /end reason.com/2024/07/26/she…