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Personally I don’t like the idea of a property tax. You don’t really own your house if some city politicians can just vote for higher and higher taxes continuou

Personally I don’t like the idea of a property tax. You don’t really own your house if some city politicians can just vote for higher and higher taxes continuously and confiscate what you are supposed to “own” when you can’t pay or refuse to pay. Plus the increase in tax from arbitrary assessments of value is just weird. Why should a house worth more pay more? There should be fixed pricing for the services the city offers (like electricity or whatever), unrelated to how your house gets appraised.

appreciatorBus 1y ago
A key assumption behind property tax is that land in a given location increases in value because that location has become more popular, and thus the owner of popular land is likely in one of two boats: - utilizing the land more intensely thus easily able to pay tax based on value - rich enough not to care North American zoning breaks this assumption since no matter how popular a given location becomes, it remains illegal to do anything on it except teardown & 1:1 replacement of existing houses. This guarantees that all land rises in value due to scarce floorspace, while simultaneously guaranteeing that most owners of the land won't have the cash to pay property tax. If you had the freedom to build on your land, this would solve property tax 2 ways: - if you want to build, you can, and in doing so, property tax ceases to be a significant expense - if you don't want to build but others do, their doing so eases the floorspace shortage, so that land doesn't become so expensive For bonus points, property tax should exempt the value of the structure. There's some logic to the idea that since we cannot directly manufacture land, there's always some public stake in it. But we can directly manufacture floorspace, just like we can manufacture tv's and shoes. We don't tax ownership of tv's & shoes, so it makes sense to exclude floorspace as well.
- bdangubic 1y ago
  > We don't tax ownership of tv's & shoes, so it makes sense to exclude floorspace as well. give it time and that will be taxed too. in more states than not in the US citizens are not only not allowed to own houses but also cars without paying the government a fee every year - the shoes and tvs and kids toys are coming :)
  - sokoloff 1y ago
    In most places, registered cars are taxed but unregistered cars are not, so classic/museum or inoperative cars can be owned without paying the government a fee every year. (This makes sense/feels fair to me. Registered cars are expected to be used and the use of cars costs the government significant money and has externalities on the public. Unregistered cars mostly do neither of those things at least no more than a bunch of shoes.)
    - bdangubic 1y ago
      I was expecting a museum as a rebbutal - well played!!!
pfannkuchen 1y ago
Haven’t you heard, by some sleight of rhetoric flat taxes are actually “regressive”. Don’t you want to be “progressive”? Progress is good, after all.
nostrademons 1y ago
I used to have similar feelings, but then realized that this idea of ownership, where you can just sit back and relax and "own" something in perpetuity, is a fool's errand. Why? Because reality doesn't work that way. And I don't just mean social reality - physical reality doesn't either. Entropy will swallow up your property and your society, and the money you pay in taxes largely goes to things like keeping the roads clear, the sewers flowing, the criminals out of town, etc. The ability to sit back and relax secure in your property ownership is basically the ability to freeload off of everyone else who got there afterwards. I'm now much more in favor of a Georgist-style land value tax, where wealth taxes on natural monopolies like land are the only form of taxation. This biases the society toward action (if you don't make enough money to afford the opportunity cost of your continued ownership of the land, you lose it) and aligns incentives much more between renters, landlords, entrepreneurs, and municipal governments. I do think there needs to be standardized, publicized assessment methods that are independent of politics and local government employees. Otherwise there's too much of an incentive for governments to fudge the assessments to increase the tax revenues they can generate. Really, this is a task for a computer: run a regression on comparable sales and take human judgment out of it.
- s5300 1y ago
  [dead]
- sokoloff 1y ago
  > run a regression on comparable sales and take human judgment out of it. It's extremely rare to find enough comparable sales of parcels of land only to run a regression on. In an intensely developed area, the overwhelming majority (like 98+%) of sales will be inextricably linked sales of land and improvements of that land. I have some intellectual agreement with LVTs, but the practical implementation is daunting and it seems to make it much harder to appeal a bad assessment.
  - nostrademons 1y ago
    You wouldn't run the regression on parcels of land only. You'd run the regression on parcels of land + improvements, run a PCA on the various attributes of both the land (acreage, viewshed, proximity to amenities, transit access) and the improvements (square footage, # BR/BAs, year of construction, presence of pool, presence of deck) to determine which factors materially affect valuation, and use the regression coefficients to subtract that out. So for example, you might find that going from 1BR->2BR costs an extra $200K, going from 2BR->3BR costs an extra $600K, a 9-rated school is an extra $500K, etc. Now you take a sample of sales within the area of the parcel in question, subtract out the regressed values for the improvements, and smooth & average it, and you have a rough approximation for the value of the land. It's not going to be perfect: it assumes that features are linearly independent, for example. But it should be close enough, and doesn't suffer from the same incentive problems as letting a human assessor put in values for those features.
kiba 1y ago
You don't own just the building, but the land. That land cannot be destroyed or created. The increase in land value is probably where the increased tax coming from. Buildings should be depreciating in value. Given that land is in fixed supply, your city/town should have a vested interest to ensure that it's used efficiently, as is the rest of society. If your property is worth million of dollars in the middle of a skyscrapper district, then you are in truth a land hoarder. There's a very famous movement in the 19th century called Georgism that's all about taxing land. You could liken the founder Henry George as to the American "Karl Marx", except he was never really interested in abolishing capitalism.
georgeecollins 1y ago
That's a theoretical argument that is extremely rare in practice (at least in California). If you want to base your "ideas" of taxes (Do you own real estate?) on edge cases why not worry about eminent domain or property seizures without a warrant or charges being filed? Why do people who have more income pay more taxes? Why do people with huge capital gains often pay very little? I think a good place to start thinking about these things is reading about why they had to call the Estates General in 1789.
- JoshuaDavid 1y ago
  > If you want to base your "ideas" of taxes (Do you own real estate?) on edge cases why not worry about eminent domain or property seizures without a warrant or charges being filed? Particularly in the case of the latter example I would be pretty surprised to encounter someone in favor of both LVT and civil asset forfeiture. Are you sure this is a case of specific people having inconsistent policy preferences and not a case of a broad group containing people who hold incompatible views?
Barrin92 1y ago
>You don’t really own your house This is a feature, not a bug. One of the reasons why Singapore develops its land a lot more sanely than most places is that its leasehold structure and progressive property taxes rationalize land use and depreciate home values. One of the single worst and medieval incentives in the American system is that home ownership is a sort of 18th century poor man's social security and people expect home prices to increase, which obviously has disincentivized construction.
dehrmann 1y ago
Property tax is the only common wealth tax in the US. All the issues people have with it like arbitrary appraisals and wildly variable taxes during market swings would also show up in more widespread wealth taxes. But I wonder what the best ways to tax people are. Broadly, the US taxes income, capital gains, sales, and property. They all suffer pros and cons with how progressive/regressive they are, complexity of implementation, ease of dodging, and revenue variability. The common belief is move from California to Texas for lower income taxes, but then you find out that property taxes are higher, there are toll roads everywhere, and a lower level of government services, so there's never a free lunch. You also have to balance local needs (Alaska has different expectations and needs than San Francisco) with preventing taxation games like Oregon/Washington sales/income tax avoidance or headaches like living in NJ, working in NYC.
binarymax 1y ago
If you live in the US, you're welcome to move to one of the states that doesn't have property tax. But the states that do have it is a choice of the states. Federal doesn't have a say.
- tzs 1y ago
  There is no US state without property tax. Maybe you are thinking of income tax (Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming) or sales tax (Alaska, Delaware, Montana, New Hampshire, and Oregon)?
  - claudiulodro 1y ago
    While not a whole state, there are municipalities with no property tax e.g. Thorne Bay in Alaska: > Thorne Bay is a Second-Class City within an unorganized borough on Prince of Wales Island. > Thorne Bay does NOT LEVY PROPERTY TAXES. > https://thornebay-ak.gov/land/ https://thornebay-ak.gov/land/ You get what you pay for as far as services are concerned though.
lttlrck 1y ago
That the TFA puts forward this as a proposed solution drives your point home > As the name suggests, a property tax deferral program allows seniors to defer paying their property taxes until death. More direct pricing of police, fire, education, roads is likely the end game they're looking for - and it's kinda the case in California for new build via Mellon-Roos.
EPWN3D 1y ago
I grew up in the Chicagoland area. Every time the teachers' union went on strike, my parents' property taxes went up. This caused unending amounts of distress in my household, when the whole point of owning a home was to have a predictable cost of living over an extended period of time. I have absolutely no issue with prop 13. It's way too fucking easy for state bureaucrats to just keep soaking property owners every time they fuck up a budget.
maxerickson 1y ago
In a city, that you don't quite own the property is the idea. You have to get along with your neighbors after all.
jjav 1y ago
> if some city politicians can just vote for higher and higher taxes continuously The linked article ignores an important point that many LVT proponents tend to ignore. How, and who, sets the value of your land? Current property taxes, any flaws aside, are fairly transparent and difficult to game. A property value is set based on comparable sales in the neighborhood. If the government decides to assess your 1500sqft house at $1M but every neighboring 1500sqft home has sold for 500K in the last year, you can very successfully appeal this wrong assessment. It has to be based on actual comparable sales, and that is difficult to cheat on because it is driven by the clearing price on the market on executed sales. A LVT is based on the theoretical value of your lot, on what it could be worth if some optimal but nonexistent building was there generating maximum revenue. But it is all speculation. This is very open to fraud and corruption.

appreciatorBus 1y ago

A key assumption behind property tax is that land in a given location increases in value because that location has become more popular, and thus the owner of popular land is likely in one of two boats: - utilizing the land more intensely thus easily able to pay tax based on value - rich enough not to care North American zoning breaks this assumption since no matter how popular a given location becomes, it remains illegal to do anything on it except teardown & 1:1 replacement of existing houses. This guarantees that all land rises in value due to scarce floorspace, while simultaneously guaranteeing that most owners of the land won't have the cash to pay property tax. If you had the freedom to build on your land, this would solve property tax 2 ways: - if you want to build, you can, and in doing so, property tax ceases to be a significant expense - if you don't want to build but others do, their doing so eases the floorspace shortage, so that land doesn't become so expensive For bonus points, property tax should exempt the value of the structure. There's some logic to the idea that since we cannot directly manufacture land, there's always some public stake in it. But we can directly manufacture floorspace, just like we can manufacture tv's and shoes. We don't tax ownership of tv's & shoes, so it makes sense to exclude floorspace as well.

bdangubic 1y ago
> We don't tax ownership of tv's & shoes, so it makes sense to exclude floorspace as well. give it time and that will be taxed too. in more states than not in the US citizens are not only not allowed to own houses but also cars without paying the government a fee every year - the shoes and tvs and kids toys are coming :)
- sokoloff 1y ago
  In most places, registered cars are taxed but unregistered cars are not, so classic/museum or inoperative cars can be owned without paying the government a fee every year. (This makes sense/feels fair to me. Registered cars are expected to be used and the use of cars costs the government significant money and has externalities on the public. Unregistered cars mostly do neither of those things at least no more than a bunch of shoes.)
  - bdangubic 1y ago
    I was expecting a museum as a rebbutal - well played!!!

pfannkuchen 1y ago

Haven’t you heard, by some sleight of rhetoric flat taxes are actually “regressive”. Don’t you want to be “progressive”? Progress is good, after all.

nostrademons 1y ago

I used to have similar feelings, but then realized that this idea of ownership, where you can just sit back and relax and "own" something in perpetuity, is a fool's errand. Why? Because reality doesn't work that way. And I don't just mean social reality - physical reality doesn't either. Entropy will swallow up your property and your society, and the money you pay in taxes largely goes to things like keeping the roads clear, the sewers flowing, the criminals out of town, etc. The ability to sit back and relax secure in your property ownership is basically the ability to freeload off of everyone else who got there afterwards. I'm now much more in favor of a Georgist-style land value tax, where wealth taxes on natural monopolies like land are the only form of taxation. This biases the society toward action (if you don't make enough money to afford the opportunity cost of your continued ownership of the land, you lose it) and aligns incentives much more between renters, landlords, entrepreneurs, and municipal governments. I do think there needs to be standardized, publicized assessment methods that are independent of politics and local government employees. Otherwise there's too much of an incentive for governments to fudge the assessments to increase the tax revenues they can generate. Really, this is a task for a computer: run a regression on comparable sales and take human judgment out of it.

s5300 1y ago
[dead]
sokoloff 1y ago
> run a regression on comparable sales and take human judgment out of it. It's extremely rare to find enough comparable sales of parcels of land only to run a regression on. In an intensely developed area, the overwhelming majority (like 98+%) of sales will be inextricably linked sales of land and improvements of that land. I have some intellectual agreement with LVTs, but the practical implementation is daunting and it seems to make it much harder to appeal a bad assessment.
- nostrademons 1y ago
  You wouldn't run the regression on parcels of land only. You'd run the regression on parcels of land + improvements, run a PCA on the various attributes of both the land (acreage, viewshed, proximity to amenities, transit access) and the improvements (square footage, # BR/BAs, year of construction, presence of pool, presence of deck) to determine which factors materially affect valuation, and use the regression coefficients to subtract that out. So for example, you might find that going from 1BR->2BR costs an extra $200K, going from 2BR->3BR costs an extra $600K, a 9-rated school is an extra $500K, etc. Now you take a sample of sales within the area of the parcel in question, subtract out the regressed values for the improvements, and smooth & average it, and you have a rough approximation for the value of the land. It's not going to be perfect: it assumes that features are linearly independent, for example. But it should be close enough, and doesn't suffer from the same incentive problems as letting a human assessor put in values for those features.

kiba 1y ago

You don't own just the building, but the land. That land cannot be destroyed or created. The increase in land value is probably where the increased tax coming from. Buildings should be depreciating in value. Given that land is in fixed supply, your city/town should have a vested interest to ensure that it's used efficiently, as is the rest of society. If your property is worth million of dollars in the middle of a skyscrapper district, then you are in truth a land hoarder. There's a very famous movement in the 19th century called Georgism that's all about taxing land. You could liken the founder Henry George as to the American "Karl Marx", except he was never really interested in abolishing capitalism.

georgeecollins 1y ago

That's a theoretical argument that is extremely rare in practice (at least in California). If you want to base your "ideas" of taxes (Do you own real estate?) on edge cases why not worry about eminent domain or property seizures without a warrant or charges being filed? Why do people who have more income pay more taxes? Why do people with huge capital gains often pay very little? I think a good place to start thinking about these things is reading about why they had to call the Estates General in 1789.

JoshuaDavid 1y ago
> If you want to base your "ideas" of taxes (Do you own real estate?) on edge cases why not worry about eminent domain or property seizures without a warrant or charges being filed? Particularly in the case of the latter example I would be pretty surprised to encounter someone in favor of both LVT and civil asset forfeiture. Are you sure this is a case of specific people having inconsistent policy preferences and not a case of a broad group containing people who hold incompatible views?

Barrin92 1y ago

>You don’t really own your house This is a feature, not a bug. One of the reasons why Singapore develops its land a lot more sanely than most places is that its leasehold structure and progressive property taxes rationalize land use and depreciate home values. One of the single worst and medieval incentives in the American system is that home ownership is a sort of 18th century poor man's social security and people expect home prices to increase, which obviously has disincentivized construction.

dehrmann 1y ago

Property tax is the only common wealth tax in the US. All the issues people have with it like arbitrary appraisals and wildly variable taxes during market swings would also show up in more widespread wealth taxes. But I wonder what the best ways to tax people are. Broadly, the US taxes income, capital gains, sales, and property. They all suffer pros and cons with how progressive/regressive they are, complexity of implementation, ease of dodging, and revenue variability. The common belief is move from California to Texas for lower income taxes, but then you find out that property taxes are higher, there are toll roads everywhere, and a lower level of government services, so there's never a free lunch. You also have to balance local needs (Alaska has different expectations and needs than San Francisco) with preventing taxation games like Oregon/Washington sales/income tax avoidance or headaches like living in NJ, working in NYC.

binarymax 1y ago

If you live in the US, you're welcome to move to one of the states that doesn't have property tax. But the states that do have it is a choice of the states. Federal doesn't have a say.

tzs 1y ago
There is no US state without property tax. Maybe you are thinking of income tax (Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming) or sales tax (Alaska, Delaware, Montana, New Hampshire, and Oregon)?
- claudiulodro 1y ago
  While not a whole state, there are municipalities with no property tax e.g. Thorne Bay in Alaska: > Thorne Bay is a Second-Class City within an unorganized borough on Prince of Wales Island. > Thorne Bay does NOT LEVY PROPERTY TAXES. > https://thornebay-ak.gov/land/ https://thornebay-ak.gov/land/ You get what you pay for as far as services are concerned though.

lttlrck 1y ago

That the TFA puts forward this as a proposed solution drives your point home > As the name suggests, a property tax deferral program allows seniors to defer paying their property taxes until death. More direct pricing of police, fire, education, roads is likely the end game they're looking for - and it's kinda the case in California for new build via Mellon-Roos.

EPWN3D 1y ago

I grew up in the Chicagoland area. Every time the teachers' union went on strike, my parents' property taxes went up. This caused unending amounts of distress in my household, when the whole point of owning a home was to have a predictable cost of living over an extended period of time. I have absolutely no issue with prop 13. It's way too fucking easy for state bureaucrats to just keep soaking property owners every time they fuck up a budget.

maxerickson 1y ago

In a city, that you don't quite own the property is the idea. You have to get along with your neighbors after all.

jjav 1y ago

> if some city politicians can just vote for higher and higher taxes continuously The linked article ignores an important point that many LVT proponents tend to ignore. How, and who, sets the value of your land? Current property taxes, any flaws aside, are fairly transparent and difficult to game. A property value is set based on comparable sales in the neighborhood. If the government decides to assess your 1500sqft house at $1M but every neighboring 1500sqft home has sold for 500K in the last year, you can very successfully appeal this wrong assessment. It has to be based on actual comparable sales, and that is difficult to cheat on because it is driven by the clearing price on the market on executed sales. A LVT is based on the theoretical value of your lot, on what it could be worth if some optimal but nonexistent building was there generating maximum revenue. But it is all speculation. This is very open to fraud and corruption.