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Would high property taxes really be a good thing for a state that has the highest income tax in the country? Texas has no income tax which is why they have hig

by tzs 2y ago

Would high property taxes really be a good thing for a state that has the highest income tax in the country? Texas has no income tax which is why they have high property taxes.

craigmcnamara 2y ago
With an appropriate property tax regime you could cut income taxes.
- bhaney 2y ago
  And as we all know, when a government can cut income tax, they do.
- tzs 2y ago
  The nice thing about income taxes is that when your income increases, which increases the amount of tax you owe, your ability to afford that tax also goes up due to that income increase. With property taxes you don't have that coupling between changes in income and changes in the tax. That can make a property tax way more painful.
  - mrkstu 2y ago
    Except the lowest income classes don’t own property and pay no property taxes directly. Considering renters also pay less in Texas than Cali, it seems a pretty un-regressive regime.
  - epistasis 2y ago
    If your income tax goes up a lot, you have a ton more wealth. Which means that a small downsizing to match the same tax level leaves you with a bunch of cash. That's exactly what should happen in a productive economy: big cash payments to give up underutilized land to somebody who can make better use of it. People talk about taxing granny out of her house, but they conveniently forget to mention that granny is keeping half a dozen people homeless by hoarding an underutilized property.
    - stogot 2y ago
      > People talk about taxing granny out of her house, but they conveniently forget to mention that granny is keeping half a dozen people homeless by hoarding an underutilized property. That’s a distasteful and predatory way to speak of someone who rightfully bought her property, possibly a widow, and just wants to live in peace versus having someone (business or gov) try to break the rules to take her property.
      - epistasis 2y ago
        It is far more distasteful and predatory to hide behind widows with a fundamentally unfair system. Whoever wants to take away the opportunity of others, let them pay. It's not hard. It's far more distasteful to ignore the needs of everyone to give a very minor convenience to somebody with a lot of wealth. Winston Churchill on this sort of old and wrong political argument about widows: https://savingcommunities.org/docs/churchill.winston/budgetresolutions.shtml#widow https://savingcommunities.org/docs/churchill.winston/budgetr...
    - tzs 2y ago
      > People talk about taxing granny out of her house, but they conveniently forget to mention that granny is keeping half a dozen people homeless by hoarding an underutilized property Where are you getting that from? In most cases when granny sells her house and moves due to high taxes the buyer will be a single family that will live in the house. In the vast majority of cases that family will have less than half a dozen people, and in the vast majority of cases they will not have been homeless before.
Spooky23 2y ago
Texas has always been ruled by the extractive industries, so property taxes essentially make taxation a non-issue for the people who own those industries, as their property is owned by corporations that have a variety of hocus hocus to offset tax liability. Property, sales and excise taxes are regressive and penalize poor folks. They are great for rich people. In a place like New York, Massachusetts, or California, you have alot of intellectual property driving the economy, so you need to tax income. New York's discretionary budget is essentially derived from income taxes on a few thousand people. New York/Mass vs. California shows why each thing is important -- NY and Mass are leaders for K-12, California is ranked like 35-40 among states. Local control of property taxes mean that the former can fund education effectively, which they do outside of the hood. California schools are stuck with trying to extract dollars from the state legislature, as the boomers effectively pay no property tax.
- epistasis 2y ago
  I don't think California or Massachusetts needs to tax income, certainly not at the level they currently do. Look at Washington, with its lack of income tax yet very strong intellectual economy, not only in software but also a growing biotech scene. CA, NY, and MA all have terrible problems with housing and land use in general, largely caused by poor allocation of land due to extremely poor taxation. Land in Manhattan, Cambridge, the Bay Area, and Los Angeles is some of the most productive land in the world, but the extraction happens because of the network effects of bundling people together. By taxing the land rents, poor uses could be replaced by far better ones, increasing the land value and economic output even further. Property tax isn't quite as good as a land value tax, but it's at least getting towards taxing the right thing.
  - tstrimple 2y ago
    Most people radically overestimate California income taxes because they fundamentally fail to understand how progressive taxation works. No one talks about Oklahoma having a high income tax, but everyone making under $50k per year would pay more income tax in Oklahoma than California. Quite amazing how that's not "high tax" and perfectly okay. Meanwhile, practically no one in these comments would be exposed to a California 12.3% income tax because it only applies to income above roughly $1.5M/year if married. My income taxes were lower in California than in Iowa at comparable times in my life, yet no one ever used Iowa as an example of high income taxes.

by tzs 2y ago

Would high property taxes really be a good thing for a state that has the highest income tax in the country? Texas has no income tax which is why they have high property taxes.

craigmcnamara 2y ago

With an appropriate property tax regime you could cut income taxes.

bhaney 2y ago
And as we all know, when a government can cut income tax, they do.
tzs 2y ago
The nice thing about income taxes is that when your income increases, which increases the amount of tax you owe, your ability to afford that tax also goes up due to that income increase. With property taxes you don't have that coupling between changes in income and changes in the tax. That can make a property tax way more painful.
- mrkstu 2y ago
  Except the lowest income classes don’t own property and pay no property taxes directly. Considering renters also pay less in Texas than Cali, it seems a pretty un-regressive regime.
- epistasis 2y ago
  If your income tax goes up a lot, you have a ton more wealth. Which means that a small downsizing to match the same tax level leaves you with a bunch of cash. That's exactly what should happen in a productive economy: big cash payments to give up underutilized land to somebody who can make better use of it. People talk about taxing granny out of her house, but they conveniently forget to mention that granny is keeping half a dozen people homeless by hoarding an underutilized property.
  - stogot 2y ago
    > People talk about taxing granny out of her house, but they conveniently forget to mention that granny is keeping half a dozen people homeless by hoarding an underutilized property. That’s a distasteful and predatory way to speak of someone who rightfully bought her property, possibly a widow, and just wants to live in peace versus having someone (business or gov) try to break the rules to take her property.
    - epistasis 2y ago
      It is far more distasteful and predatory to hide behind widows with a fundamentally unfair system. Whoever wants to take away the opportunity of others, let them pay. It's not hard. It's far more distasteful to ignore the needs of everyone to give a very minor convenience to somebody with a lot of wealth. Winston Churchill on this sort of old and wrong political argument about widows: https://savingcommunities.org/docs/churchill.winston/budgetresolutions.shtml#widow https://savingcommunities.org/docs/churchill.winston/budgetr...
  - tzs 2y ago
    > People talk about taxing granny out of her house, but they conveniently forget to mention that granny is keeping half a dozen people homeless by hoarding an underutilized property Where are you getting that from? In most cases when granny sells her house and moves due to high taxes the buyer will be a single family that will live in the house. In the vast majority of cases that family will have less than half a dozen people, and in the vast majority of cases they will not have been homeless before.

Spooky23 2y ago

Texas has always been ruled by the extractive industries, so property taxes essentially make taxation a non-issue for the people who own those industries, as their property is owned by corporations that have a variety of hocus hocus to offset tax liability. Property, sales and excise taxes are regressive and penalize poor folks. They are great for rich people. In a place like New York, Massachusetts, or California, you have alot of intellectual property driving the economy, so you need to tax income. New York's discretionary budget is essentially derived from income taxes on a few thousand people. New York/Mass vs. California shows why each thing is important -- NY and Mass are leaders for K-12, California is ranked like 35-40 among states. Local control of property taxes mean that the former can fund education effectively, which they do outside of the hood. California schools are stuck with trying to extract dollars from the state legislature, as the boomers effectively pay no property tax.

epistasis 2y ago
I don't think California or Massachusetts needs to tax income, certainly not at the level they currently do. Look at Washington, with its lack of income tax yet very strong intellectual economy, not only in software but also a growing biotech scene. CA, NY, and MA all have terrible problems with housing and land use in general, largely caused by poor allocation of land due to extremely poor taxation. Land in Manhattan, Cambridge, the Bay Area, and Los Angeles is some of the most productive land in the world, but the extraction happens because of the network effects of bundling people together. By taxing the land rents, poor uses could be replaced by far better ones, increasing the land value and economic output even further. Property tax isn't quite as good as a land value tax, but it's at least getting towards taxing the right thing.
- tstrimple 2y ago
  Most people radically overestimate California income taxes because they fundamentally fail to understand how progressive taxation works. No one talks about Oklahoma having a high income tax, but everyone making under $50k per year would pay more income tax in Oklahoma than California. Quite amazing how that's not "high tax" and perfectly okay. Meanwhile, practically no one in these comments would be exposed to a California 12.3% income tax because it only applies to income above roughly $1.5M/year if married. My income taxes were lower in California than in Iowa at comparable times in my life, yet no one ever used Iowa as an example of high income taxes.