6 ms·

The way people in the US plan for old age and retirement, and the way they are treated by society, is terrible and property taxes are aspect of that. But the on

by dwater 4y ago

The way people in the US plan for old age and retirement, and the way they are treated by society, is terrible and property taxes are aspect of that. But the only way you should be able to own land tax free is if there are no government services provided on that land. No utilities, no public road, no emergency services, no municipal services. I don't know of anywhere in the US where that is an option. Unless you're saying you want that funding to come from a different source, which would mean a total restructuring of the tax system in the majority of localities.

kashkhan 4y ago
The traditional (neoclassical economics) view is that taxes pay for services, but that's not how it really works. The federal government buys these services with money it creates, and then only later does it tax it back. For state an local governments this is mostly true but even there the federal government helps out. What you want is for the wealthy to pay for the poor and old and those without much wealth or income.
- zdragnar 4y ago
  State and local governments in the US cannot create money. They either tax it first or run a debt by selling bonds.
sudden_dystopia 4y ago
Yes, get rid of property taxes and completely overhaul the tax system. You could easily replace property taxes with a VAT which I would find much preferable because it’s more flexible. Illinois property taxes robbed my family of a farm that had been in our family for 200 years. My grandparents simply couldn’t afford $20k in taxes every damn year. Patently absurd.
- nisegami 4y ago
  That's obviously not ideal for your family, but it's precisely what property taxes (or more directly a land value tax) is designed to do. If your grandparents couldn't use the land in a way that covered the property taxes, then the argument is that the use of the land is likely inefficient and it would be better overall if the land was being used more productively. It sounds like the system did exactly what it was supposed to do. Edit: not to mention that VAT and sales taxes are considered regressive taxes that disproportionately burden the less wealthy. I would much quicker remove VAT than property taxes.
  - SoftTalker 4y ago
    It's Illinois. The state is a financial disaster. They are jacking property taxes because they don't know of any other way. Certainly spending less and rooting out the massive systemic corruption do not appear to be on the table.
  - ROTMetro 4y ago
    It may be what property taxes are designed to do but the social agreement that allows them is that taxes are designed to raise funds, not force people out of their homes. The Romans tried this. They ended up with their citizen farmers walking off the land because of the taxes, and ended up going from some of the most advanced farmers to not being able to feed themselves.
- landemva 4y ago
  I experienced VAT in Europe for some years and it is an overly complex sales tax. Simply have a sales tax which excludes uncooked food at grocery stores and excludes tax on some reasonably small amount of household energy each month. Then delete other taxes.
jjoonathan 4y ago
> tax free if there are no government services provided on that land You're still giving the "it's property" framing waaay more credit than it's due. Remember, granting someone exclusivity to a contested resource means preventing other people who would like to use the resource from using the resource. It's entirely reasonable for those people, represented in aggregate by the government, to ask for compensation in return, even if the government provided the landowner no additional services beyond the exclusivity. The entire concept of "owning" land is just a hustle to argue against paying taxes on it.
- SoftTalker 4y ago
  Maybe we should be honest and say that you can't "own" land? Government always has eminent domain, and power of seizure for unpaid taxes. You are effectively renting the land from the government. Why not just call it that. Give people a 99 year lease instead of a mortgage and property tax. If you do nothing with the land, your lease can be terminated. If you improve the land (build a house on it), you can depreciate that on your taxes as a leasehold improvement.
  - oasisbob 4y ago
    The complexities in land "ownership" are widely acknowledged and commonly taught: https://en.m.wikipedia.org/wiki/Bundle_of_rights https://en.m.wikipedia.org/wiki/Bundle_of_rights
  - jjoonathan 4y ago
    Yes, exactly. The details need to be hashed out. I'm not convinced that 99 years is right, it's long enough to ignore and then pretend to be surprised when it comes up for renewal. Perhaps 35 years and no termination clauses, to make it easier to plan around? It would allow one house for having children and one house for retirement. The improvements mechanism would likewise need iteration. I am interested to see how the various global experiments in these directions will pan out, though it looks like right now the market is betting that the 99 year leases will turn into perpetual ownership. That's unfortunate, because perpetual ownership is directly responsible for most of the largest perverse incentive problems in the real estate industry, not to mention ongoing gigantic deadweight loss.
6gvONxR4sf7o 4y ago
Why not solve it like social security? You pay in over most of your life, then retire. If you call the fire department after you’ve retired, they’ll still come because you spent a life time paying into it.
- nomel 4y ago
  > Why not solve it like social security? For the same reason that I'm planning my retirement without social security. Politicians can't be trusted long term. They'll write laws to allow them to use funds that were previously protected.
landemva 4y ago
I live in a town like this. 'Roads' are actually reciprocal easements to allow all other land owners to pass. Each lot has water well and septic, though one group of houses has a large shared water system which pools the individual well permits. Electricity and gas and internet are private companies using an easement. Police and fire can easily be funded by sales tax, just like the public transit. Alternatively, land owners can voluntarily pay yearly for police and fire, or opt-out just like people are not forced by government to buy homeowner insurance.
- rat87 4y ago
  Sounds absolutely terrible. I'm sorry. Hope your town gets it's shit fixed
  - landemva 4y ago
    Am enjoying coffee by the creek right now. It's awesome, but to each his/her own.
    - deleted 4y ago
      [deleted]
  - SoftTalker 4y ago
    Sounds quite nice to me. A good example of how private agreements such as easements can solve a lot of problems that people think require "government" solutions.
- zbyte64 4y ago
  Probably don't have bears in the area: https://newrepublic.com/article/159662/libertarian-walks-into-bear-book-review-free-town-project https://newrepublic.com/article/159662/libertarian-walks-int...
  - landemva 4y ago
    Brown and black, though not grizzly. The moose are more dangerous. There are benefits to shared services, the question is how to fund the services and if it should be voluntary.

by dwater 4y ago

kashkhan 4y ago

The traditional (neoclassical economics) view is that taxes pay for services, but that's not how it really works. The federal government buys these services with money it creates, and then only later does it tax it back. For state an local governments this is mostly true but even there the federal government helps out. What you want is for the wealthy to pay for the poor and old and those without much wealth or income.

zdragnar 4y ago
State and local governments in the US cannot create money. They either tax it first or run a debt by selling bonds.

sudden_dystopia 4y ago

Yes, get rid of property taxes and completely overhaul the tax system. You could easily replace property taxes with a VAT which I would find much preferable because it’s more flexible. Illinois property taxes robbed my family of a farm that had been in our family for 200 years. My grandparents simply couldn’t afford $20k in taxes every damn year. Patently absurd.

nisegami 4y ago
That's obviously not ideal for your family, but it's precisely what property taxes (or more directly a land value tax) is designed to do. If your grandparents couldn't use the land in a way that covered the property taxes, then the argument is that the use of the land is likely inefficient and it would be better overall if the land was being used more productively. It sounds like the system did exactly what it was supposed to do. Edit: not to mention that VAT and sales taxes are considered regressive taxes that disproportionately burden the less wealthy. I would much quicker remove VAT than property taxes.
- SoftTalker 4y ago
  It's Illinois. The state is a financial disaster. They are jacking property taxes because they don't know of any other way. Certainly spending less and rooting out the massive systemic corruption do not appear to be on the table.
- ROTMetro 4y ago
  It may be what property taxes are designed to do but the social agreement that allows them is that taxes are designed to raise funds, not force people out of their homes. The Romans tried this. They ended up with their citizen farmers walking off the land because of the taxes, and ended up going from some of the most advanced farmers to not being able to feed themselves.
landemva 4y ago
I experienced VAT in Europe for some years and it is an overly complex sales tax. Simply have a sales tax which excludes uncooked food at grocery stores and excludes tax on some reasonably small amount of household energy each month. Then delete other taxes.

jjoonathan 4y ago

> tax free if there are no government services provided on that land You're still giving the "it's property" framing waaay more credit than it's due. Remember, granting someone exclusivity to a contested resource means preventing other people who would like to use the resource from using the resource. It's entirely reasonable for those people, represented in aggregate by the government, to ask for compensation in return, even if the government provided the landowner no additional services beyond the exclusivity. The entire concept of "owning" land is just a hustle to argue against paying taxes on it.

SoftTalker 4y ago
Maybe we should be honest and say that you can't "own" land? Government always has eminent domain, and power of seizure for unpaid taxes. You are effectively renting the land from the government. Why not just call it that. Give people a 99 year lease instead of a mortgage and property tax. If you do nothing with the land, your lease can be terminated. If you improve the land (build a house on it), you can depreciate that on your taxes as a leasehold improvement.
- oasisbob 4y ago
  The complexities in land "ownership" are widely acknowledged and commonly taught: https://en.m.wikipedia.org/wiki/Bundle_of_rights https://en.m.wikipedia.org/wiki/Bundle_of_rights
- jjoonathan 4y ago
  Yes, exactly. The details need to be hashed out. I'm not convinced that 99 years is right, it's long enough to ignore and then pretend to be surprised when it comes up for renewal. Perhaps 35 years and no termination clauses, to make it easier to plan around? It would allow one house for having children and one house for retirement. The improvements mechanism would likewise need iteration. I am interested to see how the various global experiments in these directions will pan out, though it looks like right now the market is betting that the 99 year leases will turn into perpetual ownership. That's unfortunate, because perpetual ownership is directly responsible for most of the largest perverse incentive problems in the real estate industry, not to mention ongoing gigantic deadweight loss.

6gvONxR4sf7o 4y ago

Why not solve it like social security? You pay in over most of your life, then retire. If you call the fire department after you’ve retired, they’ll still come because you spent a life time paying into it.

nomel 4y ago
> Why not solve it like social security? For the same reason that I'm planning my retirement without social security. Politicians can't be trusted long term. They'll write laws to allow them to use funds that were previously protected.

landemva 4y ago

I live in a town like this. 'Roads' are actually reciprocal easements to allow all other land owners to pass. Each lot has water well and septic, though one group of houses has a large shared water system which pools the individual well permits. Electricity and gas and internet are private companies using an easement. Police and fire can easily be funded by sales tax, just like the public transit. Alternatively, land owners can voluntarily pay yearly for police and fire, or opt-out just like people are not forced by government to buy homeowner insurance.

rat87 4y ago
Sounds absolutely terrible. I'm sorry. Hope your town gets it's shit fixed
- landemva 4y ago
  Am enjoying coffee by the creek right now. It's awesome, but to each his/her own.
  - deleted 4y ago
    [deleted]
- SoftTalker 4y ago
  Sounds quite nice to me. A good example of how private agreements such as easements can solve a lot of problems that people think require "government" solutions.
zbyte64 4y ago
Probably don't have bears in the area: https://newrepublic.com/article/159662/libertarian-walks-into-bear-book-review-free-town-project https://newrepublic.com/article/159662/libertarian-walks-int...
- landemva 4y ago
  Brown and black, though not grizzly. The moose are more dangerous. There are benefits to shared services, the question is how to fund the services and if it should be voluntary.