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Property taxes going up? The 340B Program might be partly responsible
- xnx 8mo agoWe need a prominent [even more] obvious scam "church" to abuse the system so badly that the exemption is eliminated for all.
- stevenwoo 8mo agoThe largest landowner in the USA is the Mormon church and it has two or more senators in its pocket to prevent that ever happening.
- magnaton 8mo agoScientology (a family-destroying cult that brutally harassed the IRS into granting it recognition as a religion) is the perfect example, funneling huge sums into buying up real estate that then sits empty and generates no tax revenue. The center of Clearwater, FL is close to being a ghost town because of this.
- jeffbee 8mo agoTL;DR taking properties off the tax roll costs the remaining taxpayers more. Pretty basic stuff. I've been talking this up to local electeds for decades, with very little progress. The only success I've had is ending the local program that makes "historic" properties tax exempt, but the huge whale exemptions for hospitals and whatnot remain.
- mothballed 8mo agoOnly if you keep the things those taxes were paying for. I have no public roads anywhere near me, ~no police, no fire service, no public utilities, basically no county services -- maybe it is not for everybody but once I experienced it I would never go back to having these public services. I basically pay a pittance for the local school and that is it. Once property taxes are eliminated the other voters can push to not have their taxes raised and just shitcan what property taxes were paying for.
- etrautmann 8mo agoYou seem clearly aware that this is relevant to a small subset of the population.
- mothballed 8mo agoTaxes going up for shittier and shittier return is unfortunately something we are seeing across the US. Regardless of ideological viewpoint, the relative advantages of just buying the services you need on your own rather than playing into a broken system will appeal to larger and larger subsets. I was in the majority "subset" until I was tired of being squeezed dry by a system that always squandered my tax money. Maybe the government can be fixed, or even "must" be fixed for the sake of the poors that we always pretend we're thinking about (no doubt some are, but most are just using them as a prop for political persuasion), but in the meanwhile contingency plans must be made.
- concinds 8mo agoIt'll get worse. The US has lived above its means for a while, and it would need a big tax increase to only maintain the current level of service, no fancy extras.
- kiba 8mo agoProperty tax is an emerging issue. There are movement to end property taxes or limit them across the US. There is some opposite momentum toward the land value tax, which is a good thing, but these are less visible and likely weaker than a tax revolt by landowners. Eventually, if the current trend continue for property taxes, we will see a disruption in government funding for basic service, and the contraction of the economy through increased taxation of economic activity to compensate for lost revenue from property taxes. It will be a disaster. This is the endgame of the expansion of land ownership in the post WW2 era. Exemption from property taxes worsen this crisis.
- epistasis 8mo ago> There is some opposite momentum toward the land value tax, which is a good thing, but these are less visible and likely weaker than a tax revolt by landowners. You're breaking my heart here. A land value tax is embraced by anti-tax advocates like Milton Friedman as the "least bad tax" as well as by actual Marxists. However, it does seem like in the current moment a land-owner tax revolt is the likeliest end game. And if there is a big push towards eliminating property tax, those states will rush towards California-like real estate disasters. I just wish that all the people who had a hard time purchasing a home or paying rent would act on their own self-interest in reducing the share of our economy that flows to the rentierism of the land owner. Rentierism is bad in all economies, yet we have enabled an overclass to exploit young people and the poor. We live in an asset economy, where there's a big class divide between those who must work to survive, and those who own real estate (especially if it's their own home) and those who own financial assets like stocks. Making capitalism work better requires more class mobility and less inequality than we currently have.
- larsiusprime 8mo agoAlthough they key thing here is that it's not just that effect, but emergent unintended consequences. In the article, it describes how non profit healthcare institutions have an incentive to buy for profit clinics, because (alongside the other incentives), when they do so, the real estate becomes tax exempt because now it's owned by a non profit, even if the work being performed stays the same.
- jeffbee 8mo agoThat's not "unintended" that is the core of what they call the NPIC, the non-profit industrial complex. They do the same activity, with the same financial outcome, but they do it under a different corporate form and pay no taxes. The public does not benefit. Medical care is not the only player in this game. You also get it with "community land trusts" that take a property off the tax roll but don't lower rents.
- kiba 8mo agoThe irony of not treating land as a communal resource and letting private actors such as non-profits privatize the gains.
- idiotsecant 8mo agoreducing or removing property taxes for legitimate historic properties seems like a good thing to me. I don't want every community to look like a slightly randomized version of every other community. Historic stuff is interesting. If we can encourage it to stay interesting and not get torn down to build a TGI fridays that sounds like a good thing to me. How much did your crusade to tax local historic structures save the average taxpayer? How many of those places will be lost?
- kiba 8mo agoThen they should be owned by governments outright. Provided that the community consent to it and are aware of the cost. Government provides crucial services that increases land value, offsetting any losses in tax revenue through public utility. Perhaps the same thing can happen with historical buildings. However, let us note that cities are for living in. It is not a museum. Ultimately, only the public can determine the balance of concerns to be struck.
- stephen_cagle 8mo agoStrong disagree. If something has value, then the community should decide to preserve it as a group or the state should preserve it for us. I suspect that most of these schemes are some form of tax avoidance for wealthier people. The idea that some politically connected and likely wealthy group of people need some sort of help "preserving" historic buildings seems... dubious.
- idiotsecant 8mo agoWhat do you think the community deciding to preserve it looks like? The government is the community. It's made out of the community. It's elected by the community. What mechanism are you suggesting?
- jeffbee 8mo agoNone of the covered properties in Berkeley are legitimate landmarks of genuine architectural merit or historical importance. Every one of them was established by flim-flam for the purpose of claiming the tax abatement. Over the years this lovely property claimed more tax breaks than any other. Judge for yourself whether the public interest was served. https://www.google.com/maps/@37.8567746,-122.2550107,3a,60y,359.92h,93.53t/data=!3m7!1e1!3m5!1srEBAle84yhR9zQhSOaL85Q!2e0!6shttps:%2F%2Fstreetviewpixels-pa.googleapis.com%2Fv1%2Fthumbnail%3Fcb_client%3Dmaps_sv.tactile%26w%3D900%26h%3D600%26pitch%3D-3.5297270923307025%26panoid%3DrEBAle84yhR9zQhSOaL85Q%26yaw%3D359.9238215580787!7i16384!8i8192?entry=ttu&g_ep=EgoyMDI2MDIxMS4wIKXMDSoASAFQAw%3D%3D https://www.google.com/maps/@37.8567746,-122.2550107,3a,60y,...
- elektronika 8mo agoUniversities are just as bad or worse on this front. They will buy up properties with no plan simply because they have the cash to throw around and don't have to pay tax.
- jeffbee 8mo agoPeople say that in Berkeley but usually the specifics of the deal they are taking about are incorrect, so I generally ignore such people. For example the properties owned by the U.C. wealth fund are taxed like any other.
- BobaFloutist 8mo agoIt does kind of suck for Albany though that something like 10% of its population lives in the untaxable University Village.
- jeffbee 8mo agoLet's be real. Albany could double its tax base with duplexes, or any buildings taller than 10 feet, but they don't and don't want to.
- BobaFloutist 8mo agoThat's also true.
- deleted 8mo ago[deleted]
- stephen_cagle 8mo agoReally seems to me that there should be no exemption for land tax for non profits or religious reasons. It is just far too subject to abuse, and it means that we have large churches in the middle of incredibly dense cities that pay almost nothing in taxes.
- ihsw 8mo agoOr property taxes should be eliminated because they are subject to abuse, and instead sales tax should be the primary source of income for all governments.
- DiggyJohnson 8mo agoIs there a term for this approach? I don’t think it’s ludicrous enough to be flagged and buried at least…
- h3lp 8mo agoI guess it would be a consumption-based tax. The usual argument against it is that it's regressive: the poorer people spend higher percentage of their income on consumption, and therefore end up with a higher tax burden relative to their income. This can be counterbalanced by e.g. not taxing groceries/food but it becomes a whackamole tax breaks game quickly---should we also exclude fuel/housing/educational expenses/etc.
- ihsw 8mo ago[dead]
- xnx 8mo agoYes. And then after many years, the appreciated land is sold for a profit.
- ars 8mo agoA profit for who? It's a non-profit. If the sale netted extra money it goes back to the people who donated, or to another non-profit.
- afewscribbles 8mo agoAt least the early comments seem very focused on churches despite this article literally mentioning "religious" uses once and focusing nigh exclusively on hospitals. Universities and hospitals are some of the worst offenders in situations like this, especially in urban cores, likely empowered by their clear transformation into state-sanctioned "non-profit" businesses that provide a good we are compelled to consume if we are a normie who wants a reasonable guarantee of a comfortable, healthy economic existence.
- shigawire 8mo agoI'll not dispute the impact on expansion and consolidation, but I will say in recent months I have seen a number of hit pieces on the 340B program, mostly bankrolled by pharma companies (not this one just calling out the trend). The exact implementation might be flawed, but if 340b is eliminated it will kill many hospitals in underserved communities. So any plan to change 340B should really also explain how to fund these critical hospitals. In the way that surgeries used to be the "money maker" to subsidize other expensive service lines like an ED, pharmacy has filled that gap in recent years. It is less hospitals getting rich off overcharging insurance for drugs and more hospitals overcharging insurers for drugs since everything else they do is a drain on finances.
- dfsnow 8mo agoHi, I wrote this article and largely agree with you. 340B is important and without it many hospitals likely wouldn't survive. However, it's pretty evident at this point that 340B has expanded beyond its original intent. For example, Northwestern University (in the middle of downtown Chicago) got itself reclassified as a rural hospital in order to participate in the program. Moreover, it's grown extremely rapidly over the past ~5 years, and the gravity of the program is starting to create bizarre second-order effects like the one outlined. My intent with this article is just to highlight some of those effects, not to advocate for eliminating 340B. Also, not bankrolled by pharma, just a researcher for Turquoise Health (a healthtech startup). I get to dig around in their data and publish occasionally, but editorial control / opinions are my own.
- bearjaws 8mo ago340B is half the reason hospitals can even help treat homeless individuals, people who can't afford their bills, people on end of life care, etc. I've consulted with two large health systems that begin with A and they use 340B to subsidize all sorts of treatment. Unfortunately American healthcare naturally seeks to socialize treatment, but instead of it being direct its in the most round about ways.
- IFC_LLC 8mo agoI'm thoroughly perplexed as what is this doing on HN and how it connects to any Hacker News?
- duxup 8mo agoIt's interesting, that's good enough for me.
- DiggyJohnson 8mo agoReally well executed one page executive summary at the top of the article for anyone interested. Despite the oddity of being a gdrive link: https://drive.google.com/file/d/1wzGqzWHDQA4m8DIo174yqx-eYDkegBIm/view?usp=drive_link https://drive.google.com/file/d/1wzGqzWHDQA4m8DIo174yqx-eYDk...
- tamimio 8mo ago>property taxes Call it what it is, a perpetual rent. There's nothing funnier than a lot of people taking some absurd principles for granted when they make no sense at all, property taxes being one of them. So imagine you grind at least 30 years of your life working extra hours or two jobs to pay for an already inflated asset based on speculated prices rather than the actual cost, only to end up with that asset in a perpetual rent agreement where if you stopped paying it you basically don't own it anymore, a rent that also isn't controlled, so you can get screwed in the future like how a lot of people ended up selling their house because their retirement isn't enough to cover such rent. Make it make sense, the only real winners here are the banks after they collect all that compound interest throughout all these years, and the government taking all these taxes.
- estearum 8mo agoYes you should not be able to own something you had no hand in creating, such as the earth beneath your feet or the productivity of that earth created by your community. Totally absurd to think that you should!
- concinds 8mo agoWhere's the money for local services supposed to come from? Why should you be allowed to monopolize a piece of finite and scarce resource, land, for free? Since you think it's a scam, surely you support 100% capital gains taxes on homes? Since old people getting rich off of an unproductive asset, blocking supply to "preserve neighborhood character", and inflating the price of their artificially-scarce goods would be more of a scam? There's nothing wrong with retirees being forced to sell and downsize. You don't need a family-sized home when you live alone. Property tax is the least unfair tax of them all.
- tamimio 8mo agoThe government already takes enough taxes. I am sure they can figure it out. In fact, you are already double taxed: once on income tax (which was temporary and only paid on corporate profits, not yours, but that's another story) and then taxed again on what was already taxed through GST, sales tax, VAT, you name it. >finite You think land is finite? You do realize you can fit the entire human race - both the ~8 billion people currently alive and the estimated ~100 to 117 billion people who have ever lived- inside the Grand Canyon? We have enough land that every single person could have an entire farm of their own, not to mention the "land isn't enough" argument makes no sense in a country with giant parking lots, and no exceptions are made for people living in apartment blocks. The solution is simple for what you mentioned at the end: make houses a depreciated asset, not an investment. Investment by concept must always go up, scale, and grow, making it inevitably unsustainable. Japan did it and fixed the entire housing issue for the next generations to come. I am sure we are smart enough to do the same. Housing and land are made to live in, not to invest in, and keeping them empty to gauge prices up.
- duxup 8mo agoWouldn't any exception for any reason also fall into this argument? Also the American healthcare system is such a kludge of laws with mixed motivations and so on. At this point keeping local hospitals operating seems like a good goal considering the pressure on many of them. Rural areas have had hospitals vanishing for a while now, the outcome there is not good.