# Think Tank > Austrian Economics / Economic Theory >  Whay are banks usually the owners of homes, but never have to pay the taxes?

## UWDude

Why do banks get to use taxpayer forces of arms, (police or Sheriffs) to enforce their so-called land rights?

Why do banks get a break, (and bailout if necessary), at every turn?

Would this happen under crony communism too?  Probably.

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## oyarde

Under crony communism it would grow worse as any current consumer protections would be eliminated .

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## Krugminator2

This is ridiculous question but I will answer. Banks don't own the home. The person who buys the home owns the home and gets all of the appreciation. Appreciation isn't taxed up to 500k (which is insane given that every other asset is taxed on gains. It encourages overconsumption in housing.)

If a person borrows to buy and doesn't pay, the creditor gets the property. This is the same for every other debt. How else would it work? This is how free enterprise should work. You enter enter into a contract and if you fail to live up to it the bank gets the asset. They don't own it unless the contract is broken. The reason home loans are cheaper than credit cards is because the loan is secured by a tangible asset. 

And they do pay taxes. They pay taxes on the interest which is how it works for every creditor. If you bought General Motors debt you wouldn't pay taxes on the gains in the stock. If GM defaults you would use the legal system to get their assets or if it were more economical to restructure the debt. Same with those "evil" banks.

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## juleswin

Good observation, same BS happens with cars. The dealer holds your title while you pay for all the taxes and maintenance for fore it. What a scam

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## Krugminator2

> Good observation, same BS happens with cars. The dealer holds your title while you pay for all the taxes and maintenance for fore it. What a scam


Contracts aren't scams. Nobody forces a person to get a loan.

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## Superfluous Man

> Contracts aren't scams. Nobody forces a person to get a loan.


"You must spread some Reputation around before giving it to Krugminator2 again."

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## juleswin

> Contracts aren't scams. Nobody forces a person to get a loan.


Yea, I was being sarcastic.

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## oyarde

I do agree banks should not be bailed out . Depositors monies are guaranteed by the FDIC insurance the bank pays . There is no reason for the govt to be loaning tax payers monies to these .

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## oyarde

> Good observation, same BS happens with cars. The dealer holds your title while you pay for all the taxes and maintenance for fore it. What a scam


You probably drive a nice car . Mine are owned by me but if I borrowed for one it would just be a few thousand from a local credit union .

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## oyarde

@Danke , I think Jules is going to lend me his car next time I'm in Nebraska , can you mark the liquor stores on my Atlas ?

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## Danke

> @Danke , I think Jules is going to lend me his car next time I'm in Nebraska , can you mark the liquor stores on my Atlas ?


I can't condone an Injun driving, let alone drinking.

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## oyarde

> I can't condone an Injun driving, let alone drinking.


I will refrain from drinking while driving Jules car in Nebraska .  We don't know how good his insurance is .

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## juleswin

> @Danke , I think Jules is going to lend me his car next time I'm in Nebraska , can you mark the liquor stores on my Atlas ?


If you ever come to Omaha, I will personally give you my car to run around with, cant say the same for Danke

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## Danke

> If you ever come to Omaha, I will personally give you my car to run around with, cant say the same for Danke


I wouldn't drive around a car that smelled of fufu.

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## juleswin

> I wouldn't drive around a car that smelled of fufu.


Hehe, he knows what fufu is. The error you make is thinking fufu has a smell, well it has as much smell as a plate of boiled white rice. Fufu doesn't smell but what you eat it with has a smell. Enjoy my yearly Nigerian food trivia, that might come in handy for Jeopardy one day

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## Danke

> Hehe, he knows what fufu is. The error you make is thinking fufu has a smell, well it has as much smell as a plate of boiled white rice. Fufu doesn't smell but what you eat it with has a smell. Enjoy my yearly Nigerian food trivia, that might come in handy for Jeopardy one day


I wouldn't drive in a car that has Nigerian immigrant smell in it either.

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## juleswin

> I wouldn't drive in a car that has Nigerian immigrant smell in it either.


I can cover the smell with "Thai lady boy underwear" fragrance

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## Swordsmyth

> I can cover the smell with "Thai lady boy underwear" fragrance


You admit that you have that kind of perfume?

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## Swordsmyth

> Why do banks get to use taxpayer forces of arms, (police or Sheriffs) to enforce their so-called land rights?
> 
> Why do banks get a break, (and bailout if necessary), at every turn?
> 
> Would this happen under crony communism too?  Probably.


Even if banks did own the home instead of having a lean against it they would charge you more money to cover the cost of the taxes so this is just silly.

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## juleswin

> You admit that you have that kind of perfume?


No, but I know where to get one. You have to be well prepared for a visit by the honorable Danke

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## oyarde

> I wouldn't drive around a car that smelled of fufu.


I worked for a Somoan guy in the Army who was married to a german that did not speak good english once , he had a french last name . He would often call me a Foo Foo which I think is different ( and not complimentary ) than Nigerian fufu which I really do not care much for , I'm not really much of a soup and bread guy . When I'm in Africa I usually just eat bush meat .

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## r3volution 3.0

> Why do banks get to use taxpayer forces of arms,  (police or Sheriffs) to enforce their so-called land rights?


The same reason that anyone gets to use police, courts, etc to enforce any property right - nothing special about banks here.

As for taxes, if a bank owns some land, it does pay the taxes.

When it merely holds a mortgage, it doesn't own the land; it just has the right to foreclose if the owner defaults on the loan.

As for bailouts, they obviously shouldn't happen; but that's a government problem, not a problem inherent to banking.

Banking as such, sans government intervention, is a perfectly legitimate business.

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## kfarnan

banks are supported by the gov. because they push the means to control their power structure. They don't produce anything real, but reap benefits no other business does.

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## Sonny Tufts

> They don't produce anything real, but reap benefits no other business does.


They provide the means by which people can buy things or run businesses without coming out of their own pockets with the necessary cash. They also run the risk that their loans won't be repaid, especially when the value of the collateral goes down (for more info, Google 1980's real estate crash).

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