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High property taxes are good

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Re: High property taxes are good

#271

Post by mdorazio »

btilly wrote: post #107
throwthroyaboat wrote: post #73

Earlier quoted context omitted.

Doesn't Prop 13 also apply to commercial property? And second/third/30th houses? I think they smuggled a bear in as a rabbit with this one.

It does, but commercial property tends to change ownership and undergo construction more often. Therefore property taxes on commercial property tends to be higher. As a result, cities have an incentive to build commercial property over residential homes. The result is that the people working in those offices are competing for limited residential space (leading to high prices) and often have to settle for long commute…

> commercial property tends to change ownership and undergo construction more often

Definitely going to need to see a reference on that one.

Re: High property taxes are good

#272

Post by pessimizer »

Funding local public schools through property taxes is terrible, and makes sure that kids from wealthier neighborhoods get better public schools. Kids are a special case; we even expect people without kids to pay for kids. Public education should be uniform and high-quality, not dependent on local political dynamics and neighborhood wealth (and wealth disparities.)

Re: High property taxes are good

#273

Post by colinmhayes »

indecisive_user wrote: post #141
JumpCrisscross wrote: post #68

Earlier quoted context omitted.

> What's the difference between the two in reality? Land value tax incentivises turning a single-family home into a multi-unit building. Property tax explicitly discourages that.

If everyone on the block turns their homes into multiplexes or high rises, this would attract businesses/restaurants to cater to the new residents which would ultimately increase the value of the land and the corresponding taxes, so I'm confused how it's different than property taxes in that regard

Unless every property in the area is owned by the same person each individual owner will want to build a more expensive building because their individual action has minimal effect on land value. Basically if you don’t build big someone else will and you r lvt will go up either way.

Re: High property taxes are good

#274

Post by notacoward »

karaterobot wrote: post #248

> 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 bet…

> I don't even pay property taxes to the city, I pay them to the county.

The county is still a lot more local than a bank that might have an HQ across the country and is barely accountable even there. Also, most people's property taxes do go to their town or city, so your sample-of-one is not really a basis for a policy statement.

Re: High property taxes are good

#275

Post by yellowapple »

chadash wrote: post #146
yellowapple wrote: post #106

Earlier quoted context omitted.

If Grandpa rents that apartment instead of owning it, he'd if anything stand to benefit (especially if we tax land value specifically and not the building).

My point is that a lot of (and maybe most) 90 year olds are not really capable of moving. Moves are a pretty big pain in the ass in your 20s and 30s, but doing the process of finding a new apartment and physically moving are much harder at that age. And then you move to somewhere cheaper because the whole point is you can't afford the city anymore, but now you need to find all new doctors (many 90 year olds have mult…

> My point is that a lot of (and maybe most) 90 year olds are not really capable of moving.

And mine is that a lot of (and maybe most) 90 year olds wouldn't need to move. The ones who would be motivated to move are also largely the ones who are wealthy enough to do so.

Re: High property taxes are good

#276

Post by freedude »

Coming from a state with a higher property tax rate I can qualify this by saying higher is not better. Taxes are always a disincentive. While the author claims it is a disincentive to sitting on a property and is comparing it to the effect on price like the FED's interests rates, these comparisons are myopic. He misses the bigger picture of longevity of private property ownership, the Constitutional protections of a property owner, and the inevitable results of the state seizing the property for back taxes. The long term benefits of the first two are long proven and the cold destruction of a member of a community the result of the last.

Oh yeah, and the higher tax gets passed to the renter/leasee in higher rents and is a further disincentive to usage and investment.

Re: High property taxes are good

#277

Post by Kon-Peki »

medvezhenok wrote: post #178
chadash wrote: post #154

Earlier quoted context omitted.

Because 90 year old grandpa can't move as easily as us youngins and it's not his fault that the neighborhood gentrified around him. At this point he can't afford to the taxes on a studio either. But anyway, the process of moving is really pretty tough at that age, even the logistics of finding a new apartment and hiring movers. Now, you move out to the suburbs because you can't afford the city anymore, but you don't…

First, grandpa will have to move eventually. 90 year olds in Ukraine got caught up in a war they had nothing to do with and had to move. Second, if the neighborhood gentrified around grandpa, his house value has gone up - he can sell at a good profit and use the money for his retirement as he wishes. Third - consider the counterfactual renter who was living in the same place and working just like grandpa, but had to…

Just to be clear, though:

Grandpa has a senior exemption that reduces his property tax, and if he is also low-income he also gets a senior tax freeze that keeps his taxes low enough to pay them. If his health was failing and things were really, really tight money-wise he could apply to not pay his taxes at all and instead put a lien on his property that gets paid when he passes and the kids sell it.

High taxes don't have to be cruel. The real question is - what are they doing with the money? Are you getting a good value from your taxes? I mean, everyone knows that these governments are wasteful. But they are still spending the money on things. It's happening. Do you get any value from that?

I just moved out of Chicago last year. I am not going to claim that Chicago is well run or a model of efficiency. But they have a lot of programs that they spend money on. The library system in Chicago is incredible. It is undeniably world class. Where I live now, youth hockey costs $500 for a session. In Chicago, it was $175 - with better coaches and the random NHL player showing up to show how to do drills and such. Piano lessons cost twice as much. The list goes on. But you know, grandpa is probably not taking piano lessons or playing hockey. So maybe he's not getting the best deal. I don't know.

Re: High property taxes are good

#279

Post by nrmitchi »

mikeyouse wrote: post #46
belligeront wrote: post #39

Earlier quoted context omitted.

This is a regressive tax. It forces higher taxes on renters (as a class, less wealthy than homeowners) than homeowners.

Nah, rents aren't determined by owners' costs (except at the margin where property owners are debating whether to 'stay in the game') - they're determined by bog standard supply/demand and usually set to the maximum rate the market will bear.

This assumption (which is largely correct) gets thrown out the window when the entire tranche of supply is hit with a cost increase all at the same time (and every participant knows it).

The point of this "margin" you mention gets rather deterministically and uniformily raised across the board.

Re: High property taxes are good

#280

Post by mdorazio »

anonymousiam wrote: post #61
btilly wrote: post #27

And, thanks to Proposition 13, California has entirely removed this policy tool from consumer housing. A tremendous amount of our problems, from high rent to gridlock, can be traced back to this decision.

Prop 13 solved two problems at once. It forced a reduction in the out-of-control government spending, and it saved seniors from losing their houses. IMHO the only problem with Prop 13 was the "grandfathering" clause. The cuts should have been perpetual and across the board.

> It forced a reduction in the out-of-control government spending

No, it didn't. California just kept adding taxes everywhere else to make up the difference and still had an annual deficit most of the 13 years I lived there.

> It saved seniors from losing their houses

Why are seniors magically allowed to be immune to basic market forces when no one else is?

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