High property taxes are good • Hacker News Board

Re: High property taxes are good

#241

Post by Loughla » Wed, Jul 20, 2022, 7:34 PM UTC

landemva wrote: post #191

dwater wrote: post #87

Earlier quoted context omitted.

The way people in the US plan for old age and retirement, and the way they are treated by society, is terrible and property taxes are aspect of that. But the only way you should be able to own land tax free is if there are no government services provided on that land. No utilities, no public road, no emergency services, no municipal services. I don't know of anywhere in the US where that is an option. Unless you're s…

I live in a town like this. 'Roads' are actually reciprocal easements to allow all other land owners to pass. Each lot has water well and septic, though one group of houses has a large shared water system which pools the individual well permits. Electricity and gas and internet are private companies using an easement. Police and fire can easily be funded by sales tax, just like the public transit. Alternatively, land…

If you don't mind me asking, where do you live? Because my area is very similar, but all 'reciprocal easements allowing owners to pass' are all based on county/state law, and enforced via such. Anything paved, tar/chipped, graveled, or traveled via dirt is a county road and subject to county maintenance and oversight.

Re: High property taxes are good

#242

Post by SoftTalker » Wed, Jul 20, 2022, 7:35 PM UTC

nisegami wrote: post #137

sudden_dystopia wrote: post #130

Earlier quoted context omitted.

Yes, get rid of property taxes and completely overhaul the tax system. You could easily replace property taxes with a VAT which I would find much preferable because it’s more flexible. Illinois property taxes robbed my family of a farm that had been in our family for 200 years. My grandparents simply couldn’t afford $20k in taxes every damn year. Patently absurd.

That's obviously not ideal for your family, but it's precisely what property taxes (or more directly a land value tax) is designed to do. If your grandparents couldn't use the land in a way that covered the property taxes, then the argument is that the use of the land is likely inefficient and it would be better overall if the land was being used more productively. It sounds like the system did exactly what it was su…

It's Illinois. The state is a financial disaster. They are jacking property taxes because they don't know of any other way. Certainly spending less and rooting out the massive systemic corruption do not appear to be on the table.

Re: High property taxes are good

#243

Post by quartesixte » Wed, Jul 20, 2022, 7:36 PM UTC

salawat wrote: post #211

yellowapple wrote: post #74

Earlier quoted context omitted.

> Building a parking lot isn't cheap It's cheaper than an actual building... > and it does make the land more useful. ...and less useful than one, too.

Usefulness comes in many guises. Think of a parking structure as an enzyme to catalyze transactions with people hailing from a further distance away. Without that space, the exchange can't happen.

The drive (no pun intended) here is to make that an unnecessary or at least facilitated through different means.

You want people hailing from further distances via public transit and rail, and you want the majority of the businesses in an area servicing a highly dense, local community that can all walk there within 10-15 minutes.

This enzyme must be removed, the American Urban Body reworked to reject suburban thinking like this.

Re: High property taxes are good

#244

Post by schumpeter » Wed, Jul 20, 2022, 7:37 PM UTC

kashkhan wrote: post #37

cbm-vic-20 wrote: post #6

Land value taxes are even better. Property taxes provide a disincentive to making the land more productive. A land value tax would incentivize residential landowners to build more units which provides more supply and would lower rents.

property taxes are terrible for old people. you should be able to buy a reasonable amount of land tax free. USA has about 2.5 billion acres. 1/4 acre per person in an average area tax free is reasonable.

Most states and counties I’ve lived in in the southeast US either exempt or minimize property taxes on residents that are over 65.

In fact, my current area (Cobb county, GA) nimbys keep trying to block assisted living residences. The argument is that old people move in, don’t pay into local funds, but the burden is hoisted on other younger families instead.

Re: High property taxes are good

#245

Post by tptacek » Wed, Jul 20, 2022, 7:38 PM UTC

landryraccoon wrote: post #239

tptacek wrote: post #136

Earlier quoted context omitted.

Why does tax policy need to directly influence the mix of 1bdr and 3bdr apartments? Renters who need 3bdr apartments have enormous influence over the market already.

Can you say more about the influence of renters? It seems to me to be the opposite. The mortgage interest tax deduction is a massive regressive government subsidy for homeowners, and penalizes younger people who rent or cannot afford to buy a home. So I’m curious what suggests to you that renters have political power. To me it seems the opposite - tax policy massively prefers owners over renters.

I agree with you about the mortgage interest deduction. I'm not saying renters have outsized political power; they have, more likely, undersized political power. I'm saying very narrowly that in the market for multifamily building construction, people that need more bedrooms are an important market force, one the market has to pay attention to.

The whole 1bdr vs. 3bdr thing is a total sideshow; the actual issue, again, is SFZ.

Re: High property taxes are good

#246

Post by raldi » Wed, Jul 20, 2022, 7:39 PM UTC

chadash wrote: post #95

cbm-vic-20 wrote: post #6

Land value taxes are even better. Property taxes provide a disincentive to making the land more productive. A land value tax would incentivize residential landowners to build more units which provides more supply and would lower rents.

The biggest problem (IMO) is that it's not so simple to value land. Where I live, being two blocks over can make a huge difference. It's easy to say "you paid $500k for your house, so we're gonna tax you on $500k". It's much harder to accurately say what someone would have paid for the land were it not developed. I understand the benefits of LVT, but how do you solve this? Are there any good examples of governments t…

Just let property owners declare a value for their land, and give anyone the right to buy it for 120% of that value at any time, with the existing owner given a grace period where they can restate their estimate.

Re: High property taxes are good

#247

Post by brockwhittaker » Wed, Jul 20, 2022, 7:39 PM UTC

googlryas wrote: post #226

conjecTech wrote: post #222

Earlier quoted context omitted.

The tax burden is similar (maybe slightly lower in NY), but collected through different means. NYC has a city income tax, Chicago doesn't. If we're going to pick a means of collecting the same amount, encouraging good use of land and discouraging excess consumption seem like nice side effects.

I actually like the concept of a city income tax - you don't get to use all the resources for free just because you take a bus in from across a river.

I'm not sure that's how it works—at least in the case of NYC. The ~4% tax only applies to those with residence within the city's limits. If you live in Westchester however and work in Manhattan, you escape the 4% income tax (but instead pay higher property taxes).

https://tax.custhelp.com/app/answers/detail/a_id/571/~/i-don...

Re: High property taxes are good

#248

Post by karaterobot » Wed, Jul 20, 2022, 7:39 PM UTC

> And perhaps, the best attribute: the money collected from property taxes doesn't evaporate from a local area like it does when borrowers pay higher interest rates. It goes back into the local neighborhood, leading to better local infrastructure and higher quality schools.

This much is demonstrably false, at least where I live. I don't even pay property taxes to the city, I pay them to the county. There's no tie between those funds and my neighborhood. Then, a lot of the taxes are passed from the county up to the state as well, where it's further spread out.

Re: High property taxes are good

#249

Post by jjoonathan » Wed, Jul 20, 2022, 7:40 PM UTC

SoftTalker wrote: post #193

jjoonathan wrote: post #171

Earlier quoted context omitted.

> tax free if there are no government services provided on that land You're still giving the "it's property" framing waaay more credit than it's due. Remember, granting someone exclusivity to a contested resource means preventing other people who would like to use the resource from using the resource. It's entirely reasonable for those people, represented in aggregate by the government, to ask for compensation in ret…

Maybe we should be honest and say that you can't "own" land? Government always has eminent domain, and power of seizure for unpaid taxes. You are effectively renting the land from the government. Why not just call it that. Give people a 99 year lease instead of a mortgage and property tax. If you do nothing with the land, your lease can be terminated. If you improve the land (build a house on it), you can depreciate…

Yes, exactly.

The details need to be hashed out. I'm not convinced that 99 years is right, it's long enough to ignore and then pretend to be surprised when it comes up for renewal. Perhaps 35 years and no termination clauses, to make it easier to plan around? It would allow one house for having children and one house for retirement. The improvements mechanism would likewise need iteration.

I am interested to see how the various global experiments in these directions will pan out, though it looks like right now the market is betting that the 99 year leases will turn into perpetual ownership. That's unfortunate, because perpetual ownership is directly responsible for most of the largest perverse incentive problems in the real estate industry, not to mention ongoing gigantic deadweight loss.

Re: High property taxes are good

#250

Post by mjmahone17 » Wed, Jul 20, 2022, 7:41 PM UTC

jherskovic wrote: post #15

vanilla_nut wrote: post #2

In my region of northern New Hampshire, there are a lot of retired folks with houses rising from $200k-ish values to closer to $500k-ish values in the last 5-10 years. As such, there's a lot of discussion around lowering property taxes to help these retirees. In my opinion? Fuck 'em. Property taxes are a brilliant method of perfectly progressive taxation: you can always choose to live in a cheaper home. If your home…

If there was a supply of cheaper housing, I'd agree with this wholeheartedly. Part of the problem is that, in a lot of places (SF, NYC, Seattle, etc) you can price folks into homelessness. Sure, no one is entitled to live in a specific area, but for those who built their lives there, have a community, family, it's cruel to tell them "move to Nowheresville, OH so you can afford a roof"

On the other hand: if you own property, you could take a loan out in order to turn your single family home into a rent-collecting multi-unit house. That’s what people did all the time before zoning laws, and it’s a reasonable way for a retiree to earn an income.

The problem is the zoning laws: we don’t allow people to let out part of their property, so they’re forced either to attempt to downsize into a non-existent market, or get evicted for not being able to afford their taxes.