5 ms·

There is a very good counter argument to the liquidity issue: property taxes. Most Americans have a large portion, if not all of their net worth tied up in the

There is a very good counter argument to the liquidity issue: property taxes. Most Americans have a large portion, if not all of their net worth tied up in their house. This is a very illiquid asset. Yet we have no problem taxing them at around 2%. If regular people can do it, I am sure billionaires will figure out a way to pay too.

tracker1 2y ago
I don't believe that property taxes are a good thing either. In 3 years, my own property taxes alone have increased my mortgage payment by close to 30%. I think we'd be better off with exchange taxes. Every time assets, securities, currency, etc is exchanged... it gets taxed. This includes stock trades. Property taxes are a way to make people not actually own their property.
- ryandrake 2y ago
  How on earth do property taxes increase one's mortgage payment? They don't increase the size of your loan, so should have no effect on either your interest or principal payments. You might have chosen to pay your property taxes monthly, through escrow, and thus 1/12 of your property tax is sent along with your mortgage principal and interest every month, but your actual mortgage numbers aren't changing.
  - tracker1 2y ago
    Exactly.. because it's taken monthly into escrow. The fact is, I'm paying close to 30% more than a few years ago and it's entirely because of property taxes. Nobody should have property removed simply for living another year. edit: property taxes are actually up about 400% over when I bought my home 6 years ago. They property evaluation is now close to market value, where it was much lower/less and historically had been. It's been a money grab. It's also been particularly hard on retired home owners.
    - heelix 2y ago
      Our property taxes increased a crazy amount as well. Went from a 3'ish percent increase to up 25%, and then again another 14%. Pushing back on the assessment did nothing.
    - Sohcahtoa82 2y ago
      More states need to do what Oregon did and limit how quickly the assessed value of your house can increase for property tax purposes. I bought my house in 2015 for $340K, it's estimated to be worth $550-600K now, but my property tax is on only $275K in value. Each year, that value goes up 3%. It was taxed based on a ~$210K value when I bought it.
      - riku_iki 2y ago
        is it fair that you pay much smaller taxes compared to fresh buyer?
        Sohcahtoa82 2y ago
        Maybe not. In this case though, "new buyer" will only refer to new construction. A buyer of an existing house keeps the assessed value. It doesn't jump.
        riku_iki 2y ago
        new buyer of existing house will have tax reassessed base on transaction (current market price)
        Sohcahtoa82 2y ago
        Not in Oregon.
        riku_iki 2y ago
        its just mean that new home buyers pay taxes for rest of the people. If the goal is to solve housing by building more homes, this is very wrong direction.
  - fred_is_fred 2y ago
    Mortgage without escrow is so much nicer. I dont have to worry about the service screwing it up, especially since my loan seems to move every 12 months anyway.
- AnimalMuppet 2y ago
  > Property taxes are a way to make people not actually own their property. That's kind of the point here, isn't it? To the people proposing this, that's a feature, not a bug. You think it's a bug. Fine. But if you oppose it, saying "but it will actually do what it was designed to do!" is not an effective counterargument.
  - tracker1 2y ago
    I've stated several times, in this thread... I don't believe that anyone should be deprived of property for living another year. There are plenty of points of interaction, travel, exchange, buying, spending, trade that can be taxed. I've been against property taxes for a very long time.
    - AnimalMuppet 2y ago
      > I've stated several times, in this thread... I don't believe that anyone should be deprived of property for living another year. Yes, you have. You keep repeating it, like you think saying it ends the argument. The problem that people are trying to address is wealth inequality. They want something that affects the rich more than everyone else - more than linearly. The problem with all your "points of interaction" is that they don't do that. They especially don't touch someone who has 10 billion dollars and just sits on it - leaves it invested in the same thing, maybe for decades, and doesn't spend nearly in proportion to their wealth. What do you have to say to the people who are trying to address wealth inequality, other than just repeating that you don't think they should do that? Do you have anything that might actually make them change their minds?
      - tracker1 2y ago
        Taxing at exchange would disproportionately affect the wealthy.
- cool_dude85 2y ago
  >Property taxes are a way to make people not actually own their property. How do you figure? What does ownership have to do with taxation?
nullc 2y ago
Most (all?) states have varrious schemes that fix or greatly diminish property taxes at least for your home... (California does so for all property). So it's generally possible to do the upfront accounting work to cover them (e.g. set aside enough additional funds in interest bearing investments to pay them in perpetuity). And there is a liquid market in property at least, for some definition of liquidity, which makes it possible to sell and possible to set some kind of price. Real property also lacks the significant privacy invasion and personal information problems that arise with other kinds of property-- since real property is inherently non-private in some sense (otherwise it's a hole in a map :) ). For many other kinds of valuable assets there really may be no liquid market and any prices you would ascribe are just pure conjecture and fiction. It may well be difficult for the owner to even know they own it, or what its condition is, without ongoing costly auditing, etc. I'll grant you that it's a counter argument, but I don't know that it's a good one. Before someone suggests that a wealth tax could be applied to publicly traded equities that avoided most of these issues-- perhaps, but at the cost of tremendous market distortion as people tried to pull wealth into things other than equities, greatly harming everyone else who isn't hyper rich and doesn't have a lot of investment opportunities outside of the public markets. Just take a look at the absurd california wealth tax proposals-- the amount of abjectly insane personal invasion required to try to close off escapes requiring billions of dollars in funding while still basically letting some unelected board nail people under suspicious of not paying enough, it's truly remarkable. One doesn't have to care at all about the pocketbooks of the targets to recognize bad public policy, ripe for corrupt exploitation.
- tracker1 2y ago
  So rich people should be required to buy a new house every year?
galdosdi 2y ago
What a time wasting goofball argument. Many laws exempt all or part of your primary residence from consideration, and no reason not to include this one, for the exact reason you said. Many localities also are flexible with property taxes for example, letting senior citizens, the disabled, or those with low income freeze their property taxes. Yes, if we implement a new law badly the results might be bad, but why would we do that? Obviously we would write the legislation carefully to address all such details. It does not make sense to raise objections that are so trivially addressed. If I invented the automobile would you complain that they are impossible and will never catch on merely because there's no way to see behind you, a complaint easily remedied by adding a cheap mirror? Here on HN we should focus on more substantive comments

tracker1 2y ago

I don't believe that property taxes are a good thing either. In 3 years, my own property taxes alone have increased my mortgage payment by close to 30%. I think we'd be better off with exchange taxes. Every time assets, securities, currency, etc is exchanged... it gets taxed. This includes stock trades. Property taxes are a way to make people not actually own their property.

ryandrake 2y ago
How on earth do property taxes increase one's mortgage payment? They don't increase the size of your loan, so should have no effect on either your interest or principal payments. You might have chosen to pay your property taxes monthly, through escrow, and thus 1/12 of your property tax is sent along with your mortgage principal and interest every month, but your actual mortgage numbers aren't changing.
- tracker1 2y ago
  Exactly.. because it's taken monthly into escrow. The fact is, I'm paying close to 30% more than a few years ago and it's entirely because of property taxes. Nobody should have property removed simply for living another year. edit: property taxes are actually up about 400% over when I bought my home 6 years ago. They property evaluation is now close to market value, where it was much lower/less and historically had been. It's been a money grab. It's also been particularly hard on retired home owners.
  - heelix 2y ago
    Our property taxes increased a crazy amount as well. Went from a 3'ish percent increase to up 25%, and then again another 14%. Pushing back on the assessment did nothing.
  - Sohcahtoa82 2y ago
    More states need to do what Oregon did and limit how quickly the assessed value of your house can increase for property tax purposes. I bought my house in 2015 for $340K, it's estimated to be worth $550-600K now, but my property tax is on only $275K in value. Each year, that value goes up 3%. It was taxed based on a ~$210K value when I bought it.
    - riku_iki 2y ago
      is it fair that you pay much smaller taxes compared to fresh buyer?
      - Sohcahtoa82 2y ago
        Maybe not. In this case though, "new buyer" will only refer to new construction. A buyer of an existing house keeps the assessed value. It doesn't jump.
        riku_iki 2y ago
        new buyer of existing house will have tax reassessed base on transaction (current market price)
        Sohcahtoa82 2y ago
        Not in Oregon.
        riku_iki 2y ago
        its just mean that new home buyers pay taxes for rest of the people. If the goal is to solve housing by building more homes, this is very wrong direction.
- fred_is_fred 2y ago
  Mortgage without escrow is so much nicer. I dont have to worry about the service screwing it up, especially since my loan seems to move every 12 months anyway.
AnimalMuppet 2y ago
> Property taxes are a way to make people not actually own their property. That's kind of the point here, isn't it? To the people proposing this, that's a feature, not a bug. You think it's a bug. Fine. But if you oppose it, saying "but it will actually do what it was designed to do!" is not an effective counterargument.
- tracker1 2y ago
  I've stated several times, in this thread... I don't believe that anyone should be deprived of property for living another year. There are plenty of points of interaction, travel, exchange, buying, spending, trade that can be taxed. I've been against property taxes for a very long time.
  - AnimalMuppet 2y ago
    > I've stated several times, in this thread... I don't believe that anyone should be deprived of property for living another year. Yes, you have. You keep repeating it, like you think saying it ends the argument. The problem that people are trying to address is wealth inequality. They want something that affects the rich more than everyone else - more than linearly. The problem with all your "points of interaction" is that they don't do that. They especially don't touch someone who has 10 billion dollars and just sits on it - leaves it invested in the same thing, maybe for decades, and doesn't spend nearly in proportion to their wealth. What do you have to say to the people who are trying to address wealth inequality, other than just repeating that you don't think they should do that? Do you have anything that might actually make them change their minds?
    - tracker1 2y ago
      Taxing at exchange would disproportionately affect the wealthy.
cool_dude85 2y ago
>Property taxes are a way to make people not actually own their property. How do you figure? What does ownership have to do with taxation?

nullc 2y ago

Most (all?) states have varrious schemes that fix or greatly diminish property taxes at least for your home... (California does so for all property). So it's generally possible to do the upfront accounting work to cover them (e.g. set aside enough additional funds in interest bearing investments to pay them in perpetuity). And there is a liquid market in property at least, for some definition of liquidity, which makes it possible to sell and possible to set some kind of price. Real property also lacks the significant privacy invasion and personal information problems that arise with other kinds of property-- since real property is inherently non-private in some sense (otherwise it's a hole in a map :) ). For many other kinds of valuable assets there really may be no liquid market and any prices you would ascribe are just pure conjecture and fiction. It may well be difficult for the owner to even know they own it, or what its condition is, without ongoing costly auditing, etc. I'll grant you that it's a counter argument, but I don't know that it's a good one. Before someone suggests that a wealth tax could be applied to publicly traded equities that avoided most of these issues-- perhaps, but at the cost of tremendous market distortion as people tried to pull wealth into things other than equities, greatly harming everyone else who isn't hyper rich and doesn't have a lot of investment opportunities outside of the public markets. Just take a look at the absurd california wealth tax proposals-- the amount of abjectly insane personal invasion required to try to close off escapes requiring billions of dollars in funding while still basically letting some unelected board nail people under suspicious of not paying enough, it's truly remarkable. One doesn't have to care at all about the pocketbooks of the targets to recognize bad public policy, ripe for corrupt exploitation.

tracker1 2y ago
So rich people should be required to buy a new house every year?

galdosdi 2y ago

What a time wasting goofball argument. Many laws exempt all or part of your primary residence from consideration, and no reason not to include this one, for the exact reason you said. Many localities also are flexible with property taxes for example, letting senior citizens, the disabled, or those with low income freeze their property taxes. Yes, if we implement a new law badly the results might be bad, but why would we do that? Obviously we would write the legislation carefully to address all such details. It does not make sense to raise objections that are so trivially addressed. If I invented the automobile would you complain that they are impossible and will never catch on merely because there's no way to see behind you, a complaint easily remedied by adding a cheap mirror? Here on HN we should focus on more substantive comments