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All non-market pricing options (like rent control) are inherently arbitrary. Also frequently it’s property taxes that force people out of neighborhoods (eg the

All non-market pricing options (like rent control) are inherently arbitrary. Also frequently it’s property taxes that force people out of neighborhoods (eg their families own a place for years, and then the property values go up making it too expensive for them to live in). If property taxes were eliminated, this would displace fewer people. Naturally you don’t see any politicians talking about this since they don’t want to eliminate a source of revenue for the state — they’d rather blame Airbnb!

higginsc 8y ago
Except this is exactly what Prop 13 does in California, and it is incredibly damaging to housing and rental prices.
- wahern 8y ago
  All market interventions have some cost. The idea is that the benefits exceed the costs. The notion that benefits can never exceed costs is wrong on its face but somehow its what everybody assumes. We live in very cynical times. Prop 13 wouldn't be so damaging if it were easier to build. Unfortunately Prop 13 incentives and/or minimizes the consequences of communities restricting development, so it had this weird feedback effect. Regulations have unintended consequences and so we should be rightly wary of them. But that reality shouldn't be dispositive on whether we should attempt them. Market dynamics are like gravity: you can't ignore gravity but gravity doesn't make human flight impossible, it just constrains the solution space. Arguing that we shouldn't attempt market interventions is like arguing that we shouldn't have attempted human flight because God didn't equip us with wings or that we should've waited around until we evolved wings.
throwaway2048 8y ago
Property taxes are one of the few ways you can concretely tax the wealth of people that hold large amounts of property for speculative purposes, its far too easy to play shell games with liquid money. If you eliminate property tax, or prevent it from rising, you make the absentee owner who only cares about a payoff 20 years from now leaving perfectly livable homes empty many magnitudes worse. (as evidenced by california)
- cascom 8y ago
  It’s not only speculative wealth or property that get’s taxed, ask yourself how many low-income senior citizen’s who are home owners now living in gentrified communities are put into a position where they need to sell their home due to property taxes.
  - imtringued 8y ago
    That's the purpose of property taxes. If they hadn't prevented construction of residential real estate then they wouldn't have to pay these high taxes.
0x00000000 8y ago
if your house is worth too much to afford the property tax, sell it and move with your new fortune. eliminating property tax only incentives blocking all new development to drive up property values and encourage rent seeking
- supreme_sublime 8y ago
  > eliminating property tax only incentives blocking all new development to drive up property values and encourage rent seeking I'm quite interested to see your reasoning behind that statement. Don't people still want their property values to go up even with property taxes? Except in a no property tax scenario, people who own their homes outright would still be able to stay if they wanted to. Perhaps no property taxes would more highly encourage local owners to restrict newcomers. Isn't the government also interested in increasing property values so they can receive more revenue? In that case I suppose they would in a sense be "earning" the taxes they levy. - Edited for clarity
  - 0x00000000 8y ago
    >Perhaps no property taxes would more highly encourage local owners to restrict newcomers Bingo. Rampant NIMBYism. Also growing the local economy should be the priority for local governments not creating a housing bubble There is an argument that can be made that people who cannot afford to live in prime real estate in an economic powerhouse should sell their house and move somewhere else to enable growth or allow more housing to be built. But picking neither is not a productive outcome
    - supreme_sublime 8y ago
      With property taxes though, don't the incentives for government and property owners align in the desire for higher property values?
      - bluGill 8y ago
        No, as a property owner who doesn't plan to sell in the near future I want my properties values low: I pay taxes on the value of the land, so the lower that value the lower my costs. When I decide to sell I want low property taxes because I know the future buyers of my land will consider property taxes, I just want high property values.
gowld 8y ago
Your theory is deeply at odds with economics. https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax

higginsc 8y ago

Except this is exactly what Prop 13 does in California, and it is incredibly damaging to housing and rental prices.

wahern 8y ago
All market interventions have some cost. The idea is that the benefits exceed the costs. The notion that benefits can never exceed costs is wrong on its face but somehow its what everybody assumes. We live in very cynical times. Prop 13 wouldn't be so damaging if it were easier to build. Unfortunately Prop 13 incentives and/or minimizes the consequences of communities restricting development, so it had this weird feedback effect. Regulations have unintended consequences and so we should be rightly wary of them. But that reality shouldn't be dispositive on whether we should attempt them. Market dynamics are like gravity: you can't ignore gravity but gravity doesn't make human flight impossible, it just constrains the solution space. Arguing that we shouldn't attempt market interventions is like arguing that we shouldn't have attempted human flight because God didn't equip us with wings or that we should've waited around until we evolved wings.

throwaway2048 8y ago

Property taxes are one of the few ways you can concretely tax the wealth of people that hold large amounts of property for speculative purposes, its far too easy to play shell games with liquid money. If you eliminate property tax, or prevent it from rising, you make the absentee owner who only cares about a payoff 20 years from now leaving perfectly livable homes empty many magnitudes worse. (as evidenced by california)

cascom 8y ago
It’s not only speculative wealth or property that get’s taxed, ask yourself how many low-income senior citizen’s who are home owners now living in gentrified communities are put into a position where they need to sell their home due to property taxes.
- imtringued 8y ago
  That's the purpose of property taxes. If they hadn't prevented construction of residential real estate then they wouldn't have to pay these high taxes.

0x00000000 8y ago

if your house is worth too much to afford the property tax, sell it and move with your new fortune. eliminating property tax only incentives blocking all new development to drive up property values and encourage rent seeking

supreme_sublime 8y ago
> eliminating property tax only incentives blocking all new development to drive up property values and encourage rent seeking I'm quite interested to see your reasoning behind that statement. Don't people still want their property values to go up even with property taxes? Except in a no property tax scenario, people who own their homes outright would still be able to stay if they wanted to. Perhaps no property taxes would more highly encourage local owners to restrict newcomers. Isn't the government also interested in increasing property values so they can receive more revenue? In that case I suppose they would in a sense be "earning" the taxes they levy. - Edited for clarity
- 0x00000000 8y ago
  >Perhaps no property taxes would more highly encourage local owners to restrict newcomers Bingo. Rampant NIMBYism. Also growing the local economy should be the priority for local governments not creating a housing bubble There is an argument that can be made that people who cannot afford to live in prime real estate in an economic powerhouse should sell their house and move somewhere else to enable growth or allow more housing to be built. But picking neither is not a productive outcome
  - supreme_sublime 8y ago
    With property taxes though, don't the incentives for government and property owners align in the desire for higher property values?
    - bluGill 8y ago
      No, as a property owner who doesn't plan to sell in the near future I want my properties values low: I pay taxes on the value of the land, so the lower that value the lower my costs. When I decide to sell I want low property taxes because I know the future buyers of my land will consider property taxes, I just want high property values.

gowld 8y ago

Your theory is deeply at odds with economics. https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax