Politics & Policy

Those Darn Property Taxes

Forget to pay your taxes? No big deal for high-profile politicos.

So…what is a hundred bucks worth to Howard Dean?

Dean’s presidential campaign rivals are giggling about the former Vermont governor’s recent aggravation from a dispute over a late payment in property taxes.

City officials said they did not receive any property-tax payment from Dean on Aug. 12, when the first quarterly payment was due. They said they wrote Dean a letter on Aug. 21 telling him he owed taxes, plus a $76.01 interest payment.

Dean contends he wrote a check for the full amount on July 16, and noticed on Aug. 20 that the check never cleared his bank account. He explained the situation in a letter on Aug. 20 and gave the city another check that day and asked that he not be penalized for what he contended was the city’s mistake.

Bob Rogan, Dean’s deputy campaign manager, issued a statement late Friday explaining the candidate’s effort to get the late fee waived.

“The governor is exercising his right, as a citizen of Burlington, to appeal the $76.01 in interest and penalties and will abide by the decision of the board,” Rogan said. “This will come as no surprise to Vermonters, who are well aware that Howard Dean is a tightwad.”

On Monday night, the Burlington City Council, sitting as the Board of Tax Abatement with two other city officials, decided to table Dean’s request for a waiver of late charges as well as similar requests by a number of other residents.

City councilors agreed that granting waivers for late tax payments was too complicated for them to debate case-by-case. The board supported a motion to have the city’s Charter Change Committee take up the question at its October meeting.

Elected officials having problems with property taxes is nothing new. Democratic presidential-hopeful John Edwards caught some flak earlier this year when it was revealed that he had missed tax deadlines nine times in the past 15 years. Once he failed to pay taxes on his million-dollar home in Raleigh, twice he failed to pay taxes on beach property at Figure Eight Island, and five times he missed tax payments on automobiles jointly owned by him and his wife. Most recently Edwards was found to be four months late paying taxes on a $3.8 million home in Washington’s swank Georgetown neighborhood.

In early August, John Kerry said he and his wife’s late payment a Nantucket, Mass., home was a “non-issue.” The Heinz family’s bank took the blame for a late tax payment.

A spokesman for the Pittsburgh-based Mellon Financial Corp., which oversees the trust that owns the property, said the bank paid $10,326.79 for the fourth quarter of fiscal 2003, including a $348.29 payment of accrued interest.

And it’s not just Democrats who sometimes forget to pay all their taxes. Around the same time as the Kerry flap, it was discovered that President Bush’s top political adviser, Karl Rove, had paid his District of Columbia property taxes four months late. According to city records, the delinquent bill reached $4,518–including $721.51 in penalties and interest

So if late property taxes are common among political frontrunners, why are Dean’s rivals so gleeful about his $76.01 headache? Perhaps it is because he’s made comments that Bush’s tax cuts, much larger than his late fee, were small potatoes.

As the New York Times reported, Dean asserted in the New Mexico debate that “most middle-class people never got a tax cut from George Bush…I’m sure they’d rather have health insurance for everybody than the $100 they got from George Bush’s tax cut.”

“Dean says the middle class tax cuts weren’t meaningful to people, but they were, for many middle-class people, thousands of dollars,” says an aide to a rival Democratic campaign. “Yet Dean’s fighting his own state, with an administrative hearing, $76 in interest on property taxes. And he’s worth $4 million. So meaningful for Howard Dean must be a different definition of meaningful for working folks.”

In fact, most of these late payers are rolling in dough, compared to the average taxpayer. Rove owns the River Oaks Lodge Bed and Breakfast in Ingram, Texas, which earned him between $50,001 and $100,000 last year. Estimated to be worth between $500,001 and $1 million, the bed and breakfast has a mortgage of $250,001 to $500,000. Rove also has mutual funds worth $700,000 to over $1.6 million.

Sen. John Edwards, the former North Carolina trial lawyer, is worth a minimum of $12.9 million, up substantially from a minimum of $8.7 million the year before.

John Kerry has listed assets worth between $165 and $626 million on his latest financial-disclosure forms, much of that shared with his wife Teresa Heinz, heir to the Heinz ketchup fortune. The couple’s fortune has been estimated by some media sources to be worth as much as $675 million.

And Dean? Well, according to the Center for Public Integrity’s analysis of financial-disclosure forms, he’s not in Kerry territory, but he’s not doing too badly either. His assets are estimated to range between $2.2 and 5.1 million. His income came mostly from interest and stock dividends, along with his $86,000 salary as governor of Vermont. His term ended in January.

With so many political figures having slip-ups with property taxes, it may be tough for any Democrat, or Bush, to make an issue of a rival’s late payment. But the next time Dean makes his “small-potatoes” argument, any rival with the nerve to bring up his home-state tax snafu will have a handy zinger: “Governor, why is a $76 tax penalty worth fighting over, if you consider a hundred bucks or so to be chump change?”

Jim Geraghty, a reporter for States News Service, is an NRO contributor.

Members of the National Review editorial and operational teams are included under the umbrella “NR Staff.”


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