Property-Tax Relief: Rate Cuts Fairer Than Caps

Money & Ethics

Property-Tax Relief: Rate Cuts Fairer Than Caps

Plus, a question about non-compete agreements.

Q: My family recently bought a house in a state that caps the annual increase in property taxes as long as the same owner lives in the house. But when a home changes hands, the years of caps come off. So my home is taxed at a much higher rate than identical homes owned by neighbors who have lived on the block for many years. Do you think this is fair?

No. To my way of thinking, equitable taxation requires an annual assessment of every property at full market value and the application of the same tax rate to each one, with no cap on the amount. Better to provide relief through a rate reduction and to keep financial help for elderly homeowners separate from tax policy.

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Q: When I was recently hired by a high-tech firm, among the pre-employment documents I had to sign was a noncompete agreement. I really needed the job, so despite grave concerns about the agreement, I signed it. It seems to bar me from ever working for any other company in the firm's general field. Is this ethical, and can it be enforced?

It depends on where you live and how restrictive the agreement is. In some states -- notably California -- noncompete agreements are generally not allowed. Most states deem them enforceable only for a limited period -- say, one year -- and only to protect legitimate business interests, such as trade secrets and customer lists. In general, I don't think noncompetes are ethical because they prevent people from using their experience in a given field to continue their careers elsewhere. Nor are they necessary. If someone takes his former employer's valuable information to a direct competitor, or aggressively courts its customers, the original employer already has sound legal grounds on which to sue the former employee and his new company for damages.

Send your own money-and-ethics question to Editor in Chief Knight Kiplinger.