January 12, 2018

PLF asks Michigan Supreme Court to stop theft by tax collectors

By Christina M. Martin Attorney

Uri Rafaeli’s small business—Rafaeli, LLC—lost a valuable Southfield, Michigan home to pay an $8 debt to Oakland County.  Andre Ohanessian lost 2.7 acres of valuable land in Orchard Village to pay a $6,000 debt.  Michigan’s property tax law allowed Oakland County to sell the properties, collect the debts owed, and then pocket tens of thousands of dollars in additional profits from the sale of each of these properties.  Yesterday, we filed our reply brief in Rafaeli and Ohanessian’s case—Rafaeli v. Oakland County—asking the Michigan Supreme Court to hear our clients’ challenge to the unjust tax law.

                            Uri Rafaeli

The United States Constitution and the Michigan Constitution limit the government’s power to take property.  As we explained in our initial brief, although a tax collector may take the property and sell it to pay a debt (taxes, penalties, interest, and fees), he must return whatever exceeds that debt to the former owner.  In this case, that means the County should refund of $24,215 to Rafaeli and $76,000 to Ohanessian.

The County argues that the theft of this extra money is justified because Rafaeli and Ohanessian’s failure to pay their property taxes in full harmed the general welfare.  Certainly, everyone should pay their property taxes in full and on time.  But failing to do so does not justify the theft of a home’s entire equity, any more than paying a parking ticket late justifies the theft of your car, or failing to shovel snow off the sidewalk in your front yard justifies the government’s theft of your land.

Oakland County also says that the Michigan Supreme Court should not hear this case, because the court must defer to the state legislature’s policy decisions.  But Rafaeli and Ohanessian do not allege a mere bad policy; they allege an unconstitutional one that can only be made constitutional with the payment of just compensation. The theft of their equity fails the Michigan Constitution, the United States Constitution, and the central purpose of government, which is the protection of individual liberties and property.  As James Madison said, “Government is instituted to protect property of every sort . . . . This being the end of government, that alone is a just government, which impartially secures to every man, whatever is his own.”

For the sake of justice, the Michigan Supreme Court should step in and secure to Rafaeli, Ohanessian, and people across Michigan what rightfully belongs to them.

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Rafaeli, LLC v. Oakland County

In 2014, Oakland County, Michigan foreclosed on a home owned by Uri Rafaeli’s business—Rafaeli, LLC—over an $8.41 tax debt. The County sold the property for $24,500, and kept profits. Ditto for Andre Ohanessian, when the County seized and sold his property for $82,000, and pocketed every penny left over from the $6,000 tax debt. While most states refund the surplus, Michigan is among a handful of states that allow property theft to fill government coffers. PLF has asked the Michigan Supreme Court to strike down this bureaucratic theft and restore our clients’ constitutional rights.

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