6 ms·

I totally agree and I think property taxes are way more fair and equitable for a society than income taxes. Usually we tax behaviors we want to curb. Income t

by ylhert 6y ago

I totally agree and I think property taxes are way more fair and equitable for a society than income taxes. Usually we tax behaviors we want to curb. Income taxes disincentivize people from earning more, whereas property taxes are a consumption tax. In my mind this makes way more sense, and there's good data to suggest property taxes are the best/most efficient way to gain needed revenue for a city but do the least "damage" to economic prosperity

giantg2 6y ago
"I totally agree and I think property taxes are way more fair and equitable for a society than income taxes." Until you retire and no longer can pay the tax and are kicked out of your home. Logically, it makes more sense to tax people who are actually making money (income and capital gains) since that means they actually have money. Taxing people on a fundamental need (shelter) could potentially increase homelessness, especially if you hit a rough time economically like with the pandemic. "Income taxes disincentivize people from earning more" I don't see how flat or even marginal income taxes disincentivize people from making more money.
- lukeramsden 6y ago
  Couldn't you give property tax breaks to retirees, or to people temporarily out of work?
  - giantg2 6y ago
    You could. But you see, that's really working as an income tax then, but even less efficiently/equitably because you now need a mechanism and oversight to classify people/households as retired/out of work and that classification may not be taking into account the difference between someone making more money in retirement than others might make while working. For example, if I'm retired and making 5% annually on $5M dollars, that's more income than many working class people. Why should I get a break on property tax? If it's income tax, then it applies to everyone equally and you don't need special exceptions for people who lost their income since it would automatically remove the need to pay the tax (no income to withhold from).
  - gangstead 6y ago
    Seniors do get a slight property tax discount here in Texas. Still I suppose it does encourage people to downsize when they are empty nesters and no longer need to house a big family. In California you get the opposite problem where people can't afford to move as their needs change since their property tax would no longer be kept low.
    - Domenic_S 6y ago
      There is an exception in CA (it's complicated and only good in some counties) where an older person can transfer their tax basis, once, to a new house for precisely this situation. Once again young people get the shaft in CA though.
      - giantg2 6y ago
        Seems like a convoluted system to tax people based on property while still making it means based. What was the reasoning they gave for not just using an income based system, which should more implicitly align with one's means?
        Domenic_S 6y ago
        Makes gaming the system harder. Once you're rich enough you could only take compensation every other (3rd/5th/etc) year and pay property tax only then. Unlike compensation once the property tax year's gone it's gone, there's no deferring situation (eg, vis a vis deferring comp where the big chunk in later years would still be taxed) It's not an unusual situation in urban CA for an elderly person to have bought a house currently worth many millions back in the day for <$100k. Downsizing for them means still spending many hundreds of thousands of dollars, far beyond the tax basis of their current home. I think the current system encourages (or at least doesn't disincentivize) older folks with expensive homes to sell and downsize, meaning the tax basis for that same home will increase a whole bunch for the new buyer (since tax basis is recast as the purchase price when sold), ultimately driving more tax revenue.
        6y ago
  - ramses0 6y ago
    AGE 65 OR OLDER OR DISABLED EXEMPTIONS FREQUENTLY ASKED QUESTIONS: https://comptroller.texas.gov/taxes/property-tax/exemptions/age65older-disabled-faq.php https://comptroller.texas.gov/taxes/property-tax/exemptions/...
- mamon 6y ago
  >> I don't see how flat or even marginal income taxes disincentivize people from making more money When you hit higher tax brackets it gets more difficult to negotiate a raise with your employer, because to get X more money for yourself you need your employer to spend 1.4X more on your salary. Flat tax rates have no such effect.
  - giantg2 6y ago
    But as a marginal system only taxes the income above the cutoff at the higher rate, you would still make more money. For example, you are making $99k and paying 4% (pretty close to many state income taxes) on that with the next bracket at $100k with a 6% rate. You get a raise to $110k which means you are making an additional $10360 after tax and only paying an additional $200 in tax (4% vs 6% on that $10k). I don't see why you need a 40% increase.
    - deleted 6y ago
      [deleted]
- corpMaverick 6y ago
  After retirement you have the option to downsize your home.
  - giantg2 6y ago
    There's only so far you can downsize. Some of the people being kicked out are lower income and already live in modest homes. I guess you could also make the argument that you must relocate to cheaper areas, leaving behind your friends and family. The real question is any if that is "right". Should we force people out of a home that they own or make them move out of the region they lived in, in some case for 30-50 years?
- jelliclesfarm 6y ago
  texas has waivers if you are over 65 and then there is the homestead exemption etc. the high property tax is only for the income earners who pay no income tax.
thevardanian 6y ago
Property taxes are absolutely not more "equitable". Property taxes are like sales taxes, a single person can only consume so much. Similarly large wealthy corporations, or individuals can only buy so much land. And so this kind of tax structure fundamentally burdens the bottom earners of society disproportionately. A progressive tax system will always be far more equitable.
mattcaldwell 6y ago
How do income taxes disincentivize people from earning more? It's always better to make more money than to make less, even if you're paying a percentage of it to the government (or whomever).
- njarboe 6y ago
  Earning more usually involves working harder, longer, and/or taking more risk. Taxes reduces the reward for doing these things, so people are less likely to do them. Everyone would love to earn more if the extra money just drops from the sky, but that is not how the world works.

by ylhert 6y ago

giantg2 6y ago

"I totally agree and I think property taxes are way more fair and equitable for a society than income taxes." Until you retire and no longer can pay the tax and are kicked out of your home. Logically, it makes more sense to tax people who are actually making money (income and capital gains) since that means they actually have money. Taxing people on a fundamental need (shelter) could potentially increase homelessness, especially if you hit a rough time economically like with the pandemic. "Income taxes disincentivize people from earning more" I don't see how flat or even marginal income taxes disincentivize people from making more money.

lukeramsden 6y ago
Couldn't you give property tax breaks to retirees, or to people temporarily out of work?
- giantg2 6y ago
  You could. But you see, that's really working as an income tax then, but even less efficiently/equitably because you now need a mechanism and oversight to classify people/households as retired/out of work and that classification may not be taking into account the difference between someone making more money in retirement than others might make while working. For example, if I'm retired and making 5% annually on $5M dollars, that's more income than many working class people. Why should I get a break on property tax? If it's income tax, then it applies to everyone equally and you don't need special exceptions for people who lost their income since it would automatically remove the need to pay the tax (no income to withhold from).
- gangstead 6y ago
  Seniors do get a slight property tax discount here in Texas. Still I suppose it does encourage people to downsize when they are empty nesters and no longer need to house a big family. In California you get the opposite problem where people can't afford to move as their needs change since their property tax would no longer be kept low.
  - Domenic_S 6y ago
    There is an exception in CA (it's complicated and only good in some counties) where an older person can transfer their tax basis, once, to a new house for precisely this situation. Once again young people get the shaft in CA though.
    - giantg2 6y ago
      Seems like a convoluted system to tax people based on property while still making it means based. What was the reasoning they gave for not just using an income based system, which should more implicitly align with one's means?
      - Domenic_S 6y ago
        Makes gaming the system harder. Once you're rich enough you could only take compensation every other (3rd/5th/etc) year and pay property tax only then. Unlike compensation once the property tax year's gone it's gone, there's no deferring situation (eg, vis a vis deferring comp where the big chunk in later years would still be taxed) It's not an unusual situation in urban CA for an elderly person to have bought a house currently worth many millions back in the day for <$100k. Downsizing for them means still spending many hundreds of thousands of dollars, far beyond the tax basis of their current home. I think the current system encourages (or at least doesn't disincentivize) older folks with expensive homes to sell and downsize, meaning the tax basis for that same home will increase a whole bunch for the new buyer (since tax basis is recast as the purchase price when sold), ultimately driving more tax revenue.
        6y ago
- ramses0 6y ago
  AGE 65 OR OLDER OR DISABLED EXEMPTIONS FREQUENTLY ASKED QUESTIONS: https://comptroller.texas.gov/taxes/property-tax/exemptions/age65older-disabled-faq.php https://comptroller.texas.gov/taxes/property-tax/exemptions/...
mamon 6y ago
>> I don't see how flat or even marginal income taxes disincentivize people from making more money When you hit higher tax brackets it gets more difficult to negotiate a raise with your employer, because to get X more money for yourself you need your employer to spend 1.4X more on your salary. Flat tax rates have no such effect.
- giantg2 6y ago
  But as a marginal system only taxes the income above the cutoff at the higher rate, you would still make more money. For example, you are making $99k and paying 4% (pretty close to many state income taxes) on that with the next bracket at $100k with a 6% rate. You get a raise to $110k which means you are making an additional $10360 after tax and only paying an additional $200 in tax (4% vs 6% on that $10k). I don't see why you need a 40% increase.
  - deleted 6y ago
    [deleted]
corpMaverick 6y ago
After retirement you have the option to downsize your home.
- giantg2 6y ago
  There's only so far you can downsize. Some of the people being kicked out are lower income and already live in modest homes. I guess you could also make the argument that you must relocate to cheaper areas, leaving behind your friends and family. The real question is any if that is "right". Should we force people out of a home that they own or make them move out of the region they lived in, in some case for 30-50 years?
jelliclesfarm 6y ago
texas has waivers if you are over 65 and then there is the homestead exemption etc. the high property tax is only for the income earners who pay no income tax.

thevardanian 6y ago

Property taxes are absolutely not more "equitable". Property taxes are like sales taxes, a single person can only consume so much. Similarly large wealthy corporations, or individuals can only buy so much land. And so this kind of tax structure fundamentally burdens the bottom earners of society disproportionately. A progressive tax system will always be far more equitable.

mattcaldwell 6y ago

How do income taxes disincentivize people from earning more? It's always better to make more money than to make less, even if you're paying a percentage of it to the government (or whomever).

njarboe 6y ago
Earning more usually involves working harder, longer, and/or taking more risk. Taxes reduces the reward for doing these things, so people are less likely to do them. Everyone would love to earn more if the extra money just drops from the sky, but that is not how the world works.