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> The property tax is insane and regressive but it’s a wash. How are property taxes regressive? Working class people bear the tax burden with income taxes, lan

> The property tax is insane and regressive but it’s a wash. How are property taxes regressive? Working class people bear the tax burden with income taxes, land owners bear the tax burden with property taxes, I'd argue that having 0 income tax and funding the state through property tax is as progressive as it gets. Of course, rental property has to pass that tax on to renters to remain profitable, but still that allows for the vast majority of property that is not rental property to bear more of the tax burden.

foobiekr 5y ago
Property taxes are regressive because they tend to be flat rate - two properties with the same value in the same place will have the same tax assessment regardless of the income of the owners. The lower income owner pays a greater % of their income to taxes. Relatively speaking, a steep progressive income tax regime is less regressive than a property tax since the burden is entirely on home value which is largely out of the control of homeowners. For those who don’t live in Texas, there’s a whole cottage industry of companies that will contest the annual assessment (typically tax increase) for you, often with a guarantee that they can save more than their fee.
- betwixthewires 5y ago
  I wholeheartedly agree on your criticism of property appraisal as a cornerstone of property tax schemes. I wonder if there is a clean solution to this problem, I personally know people who see their tax burden increase because some county assessor says they could sell their property more now, even though they get no tangible benefit from it. It makes me reconsider the California property tax scheme where peoples taxes are assessed based on the value of them when purchased.
AnimalMuppet 5y ago
It works like this: Here's a guy who makes $50K a year, has $20K in assets other than his house, and his house is worth $150K, of which $30K is equity. Taxes are proportional to that $150K. Total assets / house price is 1/3. Here's a billionaire - literally worth $1 billion. He doesn't have a $3 billion house. So the ratio of total assets to amount covered by property tax is much more favorable to the billionaire. His house may be $30 million, but total assets / house price is 33/1.
- betwixthewires 5y ago
  Yeah, if property taxes are the only taxes I see your point. But when you also have sales taxes or value added taxes, chances are the billionaire is living a little more exorbitantly than the regular guy. If you want to get more progressive than that you can introduce luxury item taxes. More importantly though, the brunt of the tax burden is still resting on the higher value properties. If we decide that progressive means "pays more of a percentage of their wealth/income" then you're right, but if we decide it means "most of the overall tax burden falls on richer people" then it is still more progressive than income tax schemes that exist now.
  - AnimalMuppet 5y ago
    The original claim was that property tax is regressive. You asked how it was so. I explained. To now say "if property taxes are the only taxes I see your point" is to move the goalposts.

foobiekr 5y ago

Property taxes are regressive because they tend to be flat rate - two properties with the same value in the same place will have the same tax assessment regardless of the income of the owners. The lower income owner pays a greater % of their income to taxes. Relatively speaking, a steep progressive income tax regime is less regressive than a property tax since the burden is entirely on home value which is largely out of the control of homeowners. For those who don’t live in Texas, there’s a whole cottage industry of companies that will contest the annual assessment (typically tax increase) for you, often with a guarantee that they can save more than their fee.

betwixthewires 5y ago
I wholeheartedly agree on your criticism of property appraisal as a cornerstone of property tax schemes. I wonder if there is a clean solution to this problem, I personally know people who see their tax burden increase because some county assessor says they could sell their property more now, even though they get no tangible benefit from it. It makes me reconsider the California property tax scheme where peoples taxes are assessed based on the value of them when purchased.

AnimalMuppet 5y ago

It works like this: Here's a guy who makes $50K a year, has $20K in assets other than his house, and his house is worth $150K, of which $30K is equity. Taxes are proportional to that $150K. Total assets / house price is 1/3. Here's a billionaire - literally worth $1 billion. He doesn't have a $3 billion house. So the ratio of total assets to amount covered by property tax is much more favorable to the billionaire. His house may be $30 million, but total assets / house price is 33/1.

betwixthewires 5y ago
Yeah, if property taxes are the only taxes I see your point. But when you also have sales taxes or value added taxes, chances are the billionaire is living a little more exorbitantly than the regular guy. If you want to get more progressive than that you can introduce luxury item taxes. More importantly though, the brunt of the tax burden is still resting on the higher value properties. If we decide that progressive means "pays more of a percentage of their wealth/income" then you're right, but if we decide it means "most of the overall tax burden falls on richer people" then it is still more progressive than income tax schemes that exist now.
- AnimalMuppet 5y ago
  The original claim was that property tax is regressive. You asked how it was so. I explained. To now say "if property taxes are the only taxes I see your point" is to move the goalposts.