5 ms·

I wonder why we don't have a system where the norm is no property taxes on property that you designate as a personal residence which cannot be leased or otherwi

I wonder why we don't have a system where the norm is no property taxes on property that you designate as a personal residence which cannot be leased or otherwise monetized, and then a moderate property tax on properties beyond that. Ideally the goal of a property tax would be to discourage people from buying up immense amounts of land simply as a sort of naturally inflationary and stable wealth storage device, but as is the various rules seem to be really just all over the place.

Vinnl 8y ago
According to this comment Texas has that: https://news.ycombinator.com/item?id=17450640 https://news.ycombinator.com/item?id=17450640
- vonmoltke 8y ago
  Texas has reduced taxes. In my case it worked out to about a 20% reduction in taxable value.
hadrian82 8y ago
Because then the government doesn't own your land and can't take it from you when you don't pay them off. Property "tax" is their way of forcing you into agreeing that they own your land and they sell it as giving you better schools in the area or some crap. And if people feel they REALLY own something and it can't be taken away from them then they will fight for it. We can't have people fighting for their land when the government comes to auction their house off to the highest bidder. We have been moving more and more toward a Capitalist Communism where the government owns everything and you are merely renting from them (this is just straight up how it is in China, they don't even pretend), but we still sell it as Capitalism because businesses aren't owned by the government. This is not the way life should be and all property taxes (i.e. government owned property rentals) should be outlawed.
- Guvante 8y ago
  The government doesn't have to own something to tax it.
  - nybble41 8y ago
    If they claim the right to tax it, then they're claiming to own it. Only the owner of the property has the right to set conditions on its use.
- francisofascii 8y ago
  When you say "government" or "they", you are talking about your fellow citizens and members of the community. Consider a hypothetical in which there is beautiful beachfront property in your town. Would you rather it be owned by a few wealthy citizens who pay no property tax or the government?
  - nybble41 8y ago
    I would rather the beachfront property be owned by those who bought it out of their own savings, which they earned by providing goods and services to others. Not an organization defined first and foremost by its claim to possess a license to practice aggression, which transparently operates in a manner indistinguishable from a protection racket. (Nice property you have there... it'd be a shame if someone took it from you by force... Someone like us, if you don't pay up.)
    - infinite8s 8y ago
      Who do you think enforces property rights? And by what basis do they lay claim to make other people respect those rights?
      - nybble41 8y ago
        > Who do you think enforces property rights? I assume that you intended this as a rhetorical question, but the answer is not "the government". Governments do not exist to defend property rights—that is merely propaganda. No criminal organization violates property rights more brazenly or systematically than governments do on a routine basis. Every tax, every regulation, every disproportionate punishment, every victim prevented from pursuing justice while those ostensibly granted that role do nothing—almost everything the government does involves violating property rights in some form. The only point in their favor is that, like any other protection racket, they are jealous of their monopoly and not very tolerant of lesser criminals setting up operations on their turf. > And by what basis do they lay claim to make other people respect those rights? There is no need to "make" other people respect anything. That is what makes property a natural right; the very act of violating a property right naturally justifies a proportional response in kind. That is simple universality and reciprocation at work, the basis for any self-consistent system of rights, and it is more than sufficient to ensure that most individuals will respect others' property rights without being coerced, because they in turn need others to recognize their claims to property as valid. Those who chose otherwise cannot rationally object if their victims respond in kind, taking back their own property plus a proportional amount as retribution. If you are interested in further reading on this subject, I can recommend Stephen Kinsella's "Punishment and Proportionality: the Estoppel Approach" (https://mises-media.s3.amazonaws.com/12_1_3_0.pdf?file=1&type=document https://mises-media.s3.amazonaws.com/12_1_3_0.pdf?file=1&typ...).
supertrope 8y ago
The main purpose of property tax is to raise revenue for local governments. If it were zeroed out, they'd have to raise income and sales tax to pay for schools, firefighters/police, roads, parks, libraries, courts. Your other option is to go without - live with greatly reduced public services. Like rural residents do.
- TangoTrotFox 8y ago
  Should maintaining current government spending or creating the most reasonable and fair taxation system be a higher priority? That's not a rhetorical question since I imagine there would be a wide array of different views on it. In my opinion reasonable and fair taxation should be the priority. And the reason for this is because how tax is managed can radically reshape the economy. And so the role and expenditures of the government would shift accordingly. For instance today in the US there is an immense amount of land available for next to nothing. I don't think most people realize what you can do with the smallest amount of land. For instance these [1] guys are self sufficient on 1/5th of an acre. In Pasadena, California no less! It just seems so wasteful and really just crazy that we have all of this land out there that we collectively aren't doing anything with especially at a time when ever more people are interested in environmentalism, sustainability, or even for those just looking for something different in their lives. [1] - http://urbanhomestead.org/ http://urbanhomestead.org/
  - supertrope 8y ago
    "Fair" taxation is a very slippery term whose meaning varies along the political spectrum and each individual's personal self-interest. Are you willing to sacrifice many public services to reach the lower taxation level? I'm not talking about light rail and Shakespeare in the Park. In some rural areas the sheriff's jurisdiction is so large they tell 911 callers to get their shotgun and deal with suspicious activity themselves because a deputy won't get there in time. If the answer is yes, I applaud your intellectual honesty. Many people cling desperately to the notion that we can have comprehensive public services and rock bottom taxes, maybe through some magical and simple 10x government efficiency tweak. (At least local government can't deficit spend).
obelos 8y ago
The flip side of that is the state then has to raise tax on investment properties in order to keep revenues stable. This in turn raises rents on rental properties as landlords absorb the greater tax load. This ends up being a very regressive tax structure because by and large people renting their housing are of lesser economic means than those who own.
jdavis703 8y ago
Because such a scheme places property tax burdens on renters (a landlord would pass these taxes on). Those who rent tend to be less wealthy than property owners, so this winds up being a regressive tax.
- TangoTrotFox 8y ago
  This relies on the assumption that landlords are not already charging close to the max of what they think the market will - optimizing their earnings. I do not think that is a reasonable assumption.
  - nybble41 8y ago
    Individual landlords are indeed already setting their prices to maximize revenues. The limiting factor is competition—if one landlord arbitrarily increased prices, tenants would defect to other landlords, reducing revenues. However, if a tax or regulation is imposed which increases costs for all landlords then they will all raise prices simultaneously (or go out of business), so tenants can't just move somewhere else. As the landlords' profits will already be marginal, the majority of the tax can thus only be paid by the tenants. The idea that a significant portion of a tax will be payed by producers is only realistic in non-competitive markets where producers receive a nontrivial economic profit (revenues minus opportunity cost). In competitive markets, producers' economic profit approaches zero.
IkmoIkmo 8y ago
A lot of places have something like this. For example, the Netherlands has no capital gains tax or dividend tax, but it has a tax of roughly 1% - 1.5% of your net assets. So if you have a $300k investment property, it's taxed like that annually. But, your own home is exempted. It's not considered part of your net assets.

Vinnl 8y ago

According to this comment Texas has that: https://news.ycombinator.com/item?id=17450640 https://news.ycombinator.com/item?id=17450640

vonmoltke 8y ago
Texas has reduced taxes. In my case it worked out to about a 20% reduction in taxable value.

hadrian82 8y ago

Because then the government doesn't own your land and can't take it from you when you don't pay them off. Property "tax" is their way of forcing you into agreeing that they own your land and they sell it as giving you better schools in the area or some crap. And if people feel they REALLY own something and it can't be taken away from them then they will fight for it. We can't have people fighting for their land when the government comes to auction their house off to the highest bidder. We have been moving more and more toward a Capitalist Communism where the government owns everything and you are merely renting from them (this is just straight up how it is in China, they don't even pretend), but we still sell it as Capitalism because businesses aren't owned by the government. This is not the way life should be and all property taxes (i.e. government owned property rentals) should be outlawed.

Guvante 8y ago
The government doesn't have to own something to tax it.
- nybble41 8y ago
  If they claim the right to tax it, then they're claiming to own it. Only the owner of the property has the right to set conditions on its use.
francisofascii 8y ago
When you say "government" or "they", you are talking about your fellow citizens and members of the community. Consider a hypothetical in which there is beautiful beachfront property in your town. Would you rather it be owned by a few wealthy citizens who pay no property tax or the government?
- nybble41 8y ago
  I would rather the beachfront property be owned by those who bought it out of their own savings, which they earned by providing goods and services to others. Not an organization defined first and foremost by its claim to possess a license to practice aggression, which transparently operates in a manner indistinguishable from a protection racket. (Nice property you have there... it'd be a shame if someone took it from you by force... Someone like us, if you don't pay up.)
  - infinite8s 8y ago
    Who do you think enforces property rights? And by what basis do they lay claim to make other people respect those rights?
    - nybble41 8y ago
      > Who do you think enforces property rights? I assume that you intended this as a rhetorical question, but the answer is not "the government". Governments do not exist to defend property rights—that is merely propaganda. No criminal organization violates property rights more brazenly or systematically than governments do on a routine basis. Every tax, every regulation, every disproportionate punishment, every victim prevented from pursuing justice while those ostensibly granted that role do nothing—almost everything the government does involves violating property rights in some form. The only point in their favor is that, like any other protection racket, they are jealous of their monopoly and not very tolerant of lesser criminals setting up operations on their turf. > And by what basis do they lay claim to make other people respect those rights? There is no need to "make" other people respect anything. That is what makes property a natural right; the very act of violating a property right naturally justifies a proportional response in kind. That is simple universality and reciprocation at work, the basis for any self-consistent system of rights, and it is more than sufficient to ensure that most individuals will respect others' property rights without being coerced, because they in turn need others to recognize their claims to property as valid. Those who chose otherwise cannot rationally object if their victims respond in kind, taking back their own property plus a proportional amount as retribution. If you are interested in further reading on this subject, I can recommend Stephen Kinsella's "Punishment and Proportionality: the Estoppel Approach" (https://mises-media.s3.amazonaws.com/12_1_3_0.pdf?file=1&type=document https://mises-media.s3.amazonaws.com/12_1_3_0.pdf?file=1&typ...).

supertrope 8y ago

The main purpose of property tax is to raise revenue for local governments. If it were zeroed out, they'd have to raise income and sales tax to pay for schools, firefighters/police, roads, parks, libraries, courts. Your other option is to go without - live with greatly reduced public services. Like rural residents do.

TangoTrotFox 8y ago
Should maintaining current government spending or creating the most reasonable and fair taxation system be a higher priority? That's not a rhetorical question since I imagine there would be a wide array of different views on it. In my opinion reasonable and fair taxation should be the priority. And the reason for this is because how tax is managed can radically reshape the economy. And so the role and expenditures of the government would shift accordingly. For instance today in the US there is an immense amount of land available for next to nothing. I don't think most people realize what you can do with the smallest amount of land. For instance these [1] guys are self sufficient on 1/5th of an acre. In Pasadena, California no less! It just seems so wasteful and really just crazy that we have all of this land out there that we collectively aren't doing anything with especially at a time when ever more people are interested in environmentalism, sustainability, or even for those just looking for something different in their lives. [1] - http://urbanhomestead.org/ http://urbanhomestead.org/
- supertrope 8y ago
  "Fair" taxation is a very slippery term whose meaning varies along the political spectrum and each individual's personal self-interest. Are you willing to sacrifice many public services to reach the lower taxation level? I'm not talking about light rail and Shakespeare in the Park. In some rural areas the sheriff's jurisdiction is so large they tell 911 callers to get their shotgun and deal with suspicious activity themselves because a deputy won't get there in time. If the answer is yes, I applaud your intellectual honesty. Many people cling desperately to the notion that we can have comprehensive public services and rock bottom taxes, maybe through some magical and simple 10x government efficiency tweak. (At least local government can't deficit spend).

obelos 8y ago

The flip side of that is the state then has to raise tax on investment properties in order to keep revenues stable. This in turn raises rents on rental properties as landlords absorb the greater tax load. This ends up being a very regressive tax structure because by and large people renting their housing are of lesser economic means than those who own.

jdavis703 8y ago

Because such a scheme places property tax burdens on renters (a landlord would pass these taxes on). Those who rent tend to be less wealthy than property owners, so this winds up being a regressive tax.

TangoTrotFox 8y ago
This relies on the assumption that landlords are not already charging close to the max of what they think the market will - optimizing their earnings. I do not think that is a reasonable assumption.
- nybble41 8y ago
  Individual landlords are indeed already setting their prices to maximize revenues. The limiting factor is competition—if one landlord arbitrarily increased prices, tenants would defect to other landlords, reducing revenues. However, if a tax or regulation is imposed which increases costs for all landlords then they will all raise prices simultaneously (or go out of business), so tenants can't just move somewhere else. As the landlords' profits will already be marginal, the majority of the tax can thus only be paid by the tenants. The idea that a significant portion of a tax will be payed by producers is only realistic in non-competitive markets where producers receive a nontrivial economic profit (revenues minus opportunity cost). In competitive markets, producers' economic profit approaches zero.

IkmoIkmo 8y ago

A lot of places have something like this. For example, the Netherlands has no capital gains tax or dividend tax, but it has a tax of roughly 1% - 1.5% of your net assets. So if you have a $300k investment property, it's taxed like that annually. But, your own home is exempted. It's not considered part of your net assets.