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Essentially all this does make the property owner pay a protection fee to prevent their property from being bought by someone else. It's a terrible system beca

by jbob2000 8y ago

Essentially all this does make the property owner pay a protection fee to prevent their property from being bought by someone else. It's a terrible system because a billionaire could come in and scoop up thousands of people's property for pennies (assuming they set their property price low because they can't afford tax when they set it higher).

achow 8y ago
But very soon it would reach an equilibrium. All billionaires are at their desired space, with jacked up price (to create a price 'moat'), paying much more tax than previous owners.. It can work.
- jbob2000 8y ago
  No. What will happen is billionaires will capture all the space, everyone else will move out and lose all their money (property is the biggest asset most people have), then the billionaires value their land for pennies and hire security to keep people away.
- Fauntleroy 8y ago
  How are you optimistic enough to think that billionaires would just stop at some reasonable amount, instead of taking as much as they possibly could?
patja 8y ago
Isn't it just a question of tuning the dials for taxation levels? A billionaire values my home at $10 million when I value it at $1m, I need to sell it to them at $1m but then to protect it they need to pay taxes on a $10m valuation. So just set the taxes such that it makes it a net positive to society with the billionaires paying for state-funded housing (and other services...job training, language and culture courses for immigrants, etc.) as the cost of scooping up land. They get no free lunch.
- nradov 8y ago
  Or we could just raise taxes on billionaires directly instead of imposing this convoluted nonsense.
briandear 8y ago
Lower taxes perhaps? Or better yet, eliminate the property taxes and shift them to a sales tax collected upon sale. Or use existing capital gains taxes. But, to your point: why shouldn’t people pay tax on the value of their property? If they can’t afford the tax, then obviously they can’t afford the house right? Prop 13 is already effectively a Ponzi scheme— actual tax cost is paid by future investors rather than the current investor. So if I buy a house today, my tax rate is x. Tomorrow, my tax rate is still x even if the actual cost of government and my home value has increased. So tomorrow’s buyer pays their tax plus the difference between my x and the actual tax required. Tomorrow’s buyer perpetually subsidizes yesterday’s buyer. That isn’t fair at all.

achow 8y ago

But very soon it would reach an equilibrium. All billionaires are at their desired space, with jacked up price (to create a price 'moat'), paying much more tax than previous owners.. It can work.

jbob2000 8y ago
No. What will happen is billionaires will capture all the space, everyone else will move out and lose all their money (property is the biggest asset most people have), then the billionaires value their land for pennies and hire security to keep people away.
Fauntleroy 8y ago
How are you optimistic enough to think that billionaires would just stop at some reasonable amount, instead of taking as much as they possibly could?

patja 8y ago

Isn't it just a question of tuning the dials for taxation levels? A billionaire values my home at $10 million when I value it at $1m, I need to sell it to them at $1m but then to protect it they need to pay taxes on a $10m valuation. So just set the taxes such that it makes it a net positive to society with the billionaires paying for state-funded housing (and other services...job training, language and culture courses for immigrants, etc.) as the cost of scooping up land. They get no free lunch.

nradov 8y ago
Or we could just raise taxes on billionaires directly instead of imposing this convoluted nonsense.

briandear 8y ago

Lower taxes perhaps? Or better yet, eliminate the property taxes and shift them to a sales tax collected upon sale. Or use existing capital gains taxes. But, to your point: why shouldn’t people pay tax on the value of their property? If they can’t afford the tax, then obviously they can’t afford the house right? Prop 13 is already effectively a Ponzi scheme— actual tax cost is paid by future investors rather than the current investor. So if I buy a house today, my tax rate is x. Tomorrow, my tax rate is still x even if the actual cost of government and my home value has increased. So tomorrow’s buyer pays their tax plus the difference between my x and the actual tax required. Tomorrow’s buyer perpetually subsidizes yesterday’s buyer. That isn’t fair at all.