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> Because the landlord is able to pass down the burden of the property tax to the tenants, the property tax becomes regressive. Here's the flaw that sinks your
by jeffbee 2y ago
> Because the landlord is able to pass down the burden of the property tax to the tenants, the property tax becomes regressive.
Here's the flaw that sinks your argument. Lessors aren't able to pass through taxes to tenants. They charge what the market will bear and leave nothing on the table. When a new tax arrives the increment comes entirely out of the owner's share because the tenants were already paying the market-clearing price.
- Apreche 2y agoIf that’s the case, then the articles premise is wrong. Property taxes aren’t hurting tenants, and they should be raised on landlords.
- jeffbee 2y agoThe article has a few salient points that apply to NY and their peculiar tax regime, but nowhere else.
- blululu 2y agoIt’s a complicated pricing issue. The ability to pass a tax onto customers is a function of supply and demand and their relative elasticities. The assertion that the price of housing is a direct function of the costs is false. Consider the inverse: my landlord has their building paid off, but do they pass their savings onto me? The fed drops rates and allows the landlord to refinance: does that make my apartment cheaper? Inversely if my landlords costs go up, they can’t necessarily pass the cost onto me. There are situations where a tax can be passed directly to the customer but it is not guaranteed.