5 ms·

Prop 13 needs to be reformed because taxes need to be fair. Taxes can be deferred for those who cannot afford to pay the full tax so they don't have to move. Th

Prop 13 needs to be reformed because taxes need to be fair. Taxes can be deferred for those who cannot afford to pay the full tax so they don't have to move. The benefit should be restricted to a primary residence, no vacation, investment, or commercial properties. Deferred taxes can be paid when the owner sells the house if there is enough equity. At some points victims of prop 13 will out number those that benefit from it. One can only hope people will wake up and do the right thing.

eweise 6y ago
Taxes are fair under Prop 13. What's fair about making people pay more tax just because the market value of their house has increased? They will pay taxes on those gains (over a certain limit) when they sell.
- avidiax 6y ago
  How is it fair that two houses built side by side in the same year with the same floorplan might have one pay literally 10x the property tax than the other, merely because it changed hands? What's worse, the 10x house actually realized those capital gains, so the state also got that cash.
  - eweise 6y ago
    Simple, the people in the houses moved in at a different time. A house isn't just a thing you buy and sell. You live in the house, raise a family, become part of a community. My neighbor across the street bought her house 30 years ago. She's an artist and doesn't make much money. She is well known in the community. Should she be forced out of her house so that some rich tech worker can move in? If want to cry unfair, then it would be better to aim at commercial real estate. That's a pure money business. Why should they get protection under prop 13? Make no sense at all.
    - refurb 6y ago
      You don’t force her out of her house, you simply allow her to defer the taxes until she sells or dies. Why should some whose house went from $200k to $2M be getting a tax break?
      - jjav 6y ago
        > Why should some whose house went from $200k to $2M be getting a tax break? Because they bought a 200K house and budgeted for taxes on a 200K house. The paper estimate of it being worth 2M right now doesn't change anything about the house they actually live in.
        refurb 6y ago
        So you feel the right solution is to give millionaires massive tax breaks and have middle class folks who can barely afford a house pick up the slack? It is absurd and an anomaly. Let them stay, but when the reap a $1M+ profit on the house when they sell or die, they can pony up the tax, just like everyone else.
        jjav 6y ago
        > So you feel the right solution is to give millionaires massive tax breaks and have middle class folks who can barely afford a house pick up the slack? I did not say that so I don't mean that. If a low/middle class person buy the house they can afford to pay and live in it, they don't become millionaires just because other people around them bought houses more expensively later. They're most likely still in the same career earning that same low/middle class income. They don't have any additional money to pay much higher property taxes, they are certainly not millionaires. Tax them after sale, sure, if the property value is still high when they sell (it might not be).
        curryst 6y ago
        Which is why you let people defer them, rather than just getting rid of them. If they budgeted for a 200k house, that turned into a 2M house, they should be ecstatic when they sell it, the government takes the property taxes and they still get to keep more than 200k.
  - CincinnatiMan 6y ago
    Theoretically the house that changed hands, the new owners knew what they were signing up for and could verify their budget could handle the higher taxes. Whereas the original owners, whose home value has shot up significantly since purchase way back when, may not be able to pay for the new higher taxes if they were applied in full.
- ryandrake 6y ago
  > What's fair about making people pay more tax just because the market value of their house has increased? If you believe that, then why ratchet them up just because the property is sold? If you're going to detach property taxes from the value of the property, then do it for new homeowners too. If we are scaling property taxes with the property's value, we might as well do it for everyone and not treat people special just because they were living there longer. Other costs people deal with scale at least by local cost of living. Groceries, electricity, water service, etc. all increase year after year. Do we let people pay 1960s costs for everything else just because they happened to move to the area in 1960? Prop 13 as it currently stands, is a wealth transfer from young, new homeowners to elderly, established homeowners.
  - eweise 6y ago
    Property values go up over time. I initially paid $8k a year and now its $14K, which is actually about right for the market. I am protected from wild increases so that I don't have to move my kids out of a neighborhood and school they've grown up in. I agree that scaling property taxes with their values is bad. Not sure why government expenses magically double when housing value do.
    - gkop 6y ago
      Look into land value tax. The goal of property tax is not just to fund collective expenses, but also to encourage the most valuable use of the land for the collective benefit (eg. let's not waste valuable inner Bay Area land on single family homes, but instead with more dense uses like four plexes). https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax
      - eweise 6y ago
        I guess that makes sense if your goal is to use land most efficiently. Not sure that what is most important though.
        6y ago
- epistasis 6y ago
  A tax on the market value of a house should go up when the market value increases. This is double true when the value went up without any change to the structure. Structures depreciate, and become less valuable over time. When property values go up in California, it's almost entire land value that goes up. The value increase isn't from the labor of the land owner, it's just simple rentierism. Land gets more valuable because of what one can access close to it: jobs, relationships, people, universities. All this value is socially created. This sort of wealth hoarding is hugely damaging to the economy, and all sorts of thinkers revered by people in the US have nothing but the worst possible words for it, from Adam Smith to Thomas Paine. It is quite strange for the wealthiest members of a community to depend upon the less wealthy to fund a community, but that's what Prop 13 is all about. This situation, where the wealthy could buy their way out of taxation, is a lot of what led to the French Revolution.
  - jjav 6y ago
    > where the wealthy could buy their way out of taxation This is literally the opposite. If you buy (a property), you'll have the taxes based on what you bought. You can't buy your way to a lower tax rate.
    - epistasis 6y ago
      Every year their taxes get smaller and smaller, as the tax is, by law, sub inflationary. The older the wealth, the lower the taxes.
    - imtringued 6y ago
      You're right. Early adopters bought their way out of taxation, house appreciation made them wealthy. It's not that you start out wealthy, you get wealthy in the process and once you are wealthy you don't get taxed more. That's the effect he was describing.
      - jjav 6y ago
        > Early adopters bought their way out of taxation I wouldn't phrase it that way because it's not what they did, even if decades down the road it turned out that way (it could well have gone the other way like it did for homeowners in Detroit years ago). What they did was buy a home they could afford, based on monthly mortgage + taxes payments, which is the entirely reasonable and responsible thing to do. Having the property tax balloon out of control and out of any conceivable affordable range due to actions of other people in the area, is hardly fair.

eweise 6y ago

Taxes are fair under Prop 13. What's fair about making people pay more tax just because the market value of their house has increased? They will pay taxes on those gains (over a certain limit) when they sell.

avidiax 6y ago
How is it fair that two houses built side by side in the same year with the same floorplan might have one pay literally 10x the property tax than the other, merely because it changed hands? What's worse, the 10x house actually realized those capital gains, so the state also got that cash.
- eweise 6y ago
  Simple, the people in the houses moved in at a different time. A house isn't just a thing you buy and sell. You live in the house, raise a family, become part of a community. My neighbor across the street bought her house 30 years ago. She's an artist and doesn't make much money. She is well known in the community. Should she be forced out of her house so that some rich tech worker can move in? If want to cry unfair, then it would be better to aim at commercial real estate. That's a pure money business. Why should they get protection under prop 13? Make no sense at all.
  - refurb 6y ago
    You don’t force her out of her house, you simply allow her to defer the taxes until she sells or dies. Why should some whose house went from $200k to $2M be getting a tax break?
    - jjav 6y ago
      > Why should some whose house went from $200k to $2M be getting a tax break? Because they bought a 200K house and budgeted for taxes on a 200K house. The paper estimate of it being worth 2M right now doesn't change anything about the house they actually live in.
      - refurb 6y ago
        So you feel the right solution is to give millionaires massive tax breaks and have middle class folks who can barely afford a house pick up the slack? It is absurd and an anomaly. Let them stay, but when the reap a $1M+ profit on the house when they sell or die, they can pony up the tax, just like everyone else.
        jjav 6y ago
        > So you feel the right solution is to give millionaires massive tax breaks and have middle class folks who can barely afford a house pick up the slack? I did not say that so I don't mean that. If a low/middle class person buy the house they can afford to pay and live in it, they don't become millionaires just because other people around them bought houses more expensively later. They're most likely still in the same career earning that same low/middle class income. They don't have any additional money to pay much higher property taxes, they are certainly not millionaires. Tax them after sale, sure, if the property value is still high when they sell (it might not be).
      - curryst 6y ago
        Which is why you let people defer them, rather than just getting rid of them. If they budgeted for a 200k house, that turned into a 2M house, they should be ecstatic when they sell it, the government takes the property taxes and they still get to keep more than 200k.
- CincinnatiMan 6y ago
  Theoretically the house that changed hands, the new owners knew what they were signing up for and could verify their budget could handle the higher taxes. Whereas the original owners, whose home value has shot up significantly since purchase way back when, may not be able to pay for the new higher taxes if they were applied in full.
ryandrake 6y ago
> What's fair about making people pay more tax just because the market value of their house has increased? If you believe that, then why ratchet them up just because the property is sold? If you're going to detach property taxes from the value of the property, then do it for new homeowners too. If we are scaling property taxes with the property's value, we might as well do it for everyone and not treat people special just because they were living there longer. Other costs people deal with scale at least by local cost of living. Groceries, electricity, water service, etc. all increase year after year. Do we let people pay 1960s costs for everything else just because they happened to move to the area in 1960? Prop 13 as it currently stands, is a wealth transfer from young, new homeowners to elderly, established homeowners.
- eweise 6y ago
  Property values go up over time. I initially paid $8k a year and now its $14K, which is actually about right for the market. I am protected from wild increases so that I don't have to move my kids out of a neighborhood and school they've grown up in. I agree that scaling property taxes with their values is bad. Not sure why government expenses magically double when housing value do.
  - gkop 6y ago
    Look into land value tax. The goal of property tax is not just to fund collective expenses, but also to encourage the most valuable use of the land for the collective benefit (eg. let's not waste valuable inner Bay Area land on single family homes, but instead with more dense uses like four plexes). https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax
    - eweise 6y ago
      I guess that makes sense if your goal is to use land most efficiently. Not sure that what is most important though.
      - 6y ago
epistasis 6y ago
A tax on the market value of a house should go up when the market value increases. This is double true when the value went up without any change to the structure. Structures depreciate, and become less valuable over time. When property values go up in California, it's almost entire land value that goes up. The value increase isn't from the labor of the land owner, it's just simple rentierism. Land gets more valuable because of what one can access close to it: jobs, relationships, people, universities. All this value is socially created. This sort of wealth hoarding is hugely damaging to the economy, and all sorts of thinkers revered by people in the US have nothing but the worst possible words for it, from Adam Smith to Thomas Paine. It is quite strange for the wealthiest members of a community to depend upon the less wealthy to fund a community, but that's what Prop 13 is all about. This situation, where the wealthy could buy their way out of taxation, is a lot of what led to the French Revolution.
- jjav 6y ago
  > where the wealthy could buy their way out of taxation This is literally the opposite. If you buy (a property), you'll have the taxes based on what you bought. You can't buy your way to a lower tax rate.
  - epistasis 6y ago
    Every year their taxes get smaller and smaller, as the tax is, by law, sub inflationary. The older the wealth, the lower the taxes.
  - imtringued 6y ago
    You're right. Early adopters bought their way out of taxation, house appreciation made them wealthy. It's not that you start out wealthy, you get wealthy in the process and once you are wealthy you don't get taxed more. That's the effect he was describing.
    - jjav 6y ago
      > Early adopters bought their way out of taxation I wouldn't phrase it that way because it's not what they did, even if decades down the road it turned out that way (it could well have gone the other way like it did for homeowners in Detroit years ago). What they did was buy a home they could afford, based on monthly mortgage + taxes payments, which is the entirely reasonable and responsible thing to do. Having the property tax balloon out of control and out of any conceivable affordable range due to actions of other people in the area, is hardly fair.