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Property tax is really onerous for those who own their houses but fall on hard times. Its implementation can be terribly unfair, because it essentially says tha

Property tax is really onerous for those who own their houses but fall on hard times. Its implementation can be terribly unfair, because it essentially says that you don't really own all of your property. You own most of it, but if you don't kick that little bit up every year, then you're out on your duff and what you get back is subject to the whims of the auction bidders. That's a troubling implication for me. I'm a big fan of first sale doctrine. If you bought it, it should be yours. I'm deeply uncomfortable with the notion that you must always pay rent to the government on something you ostensibly own, or you get the boot. There are so many ways this could be addressed. Property taxes could be eliminated and other taxes raised for a revenue neutral solution. Or below a certain property value, the tax levied could be zero. Lots of ways to fix this.

angersock 12y ago
I think it's even more screwed up than that, right? One pays property taxes in order to get the benefits of the people they pay taxes to. It looks like the local and state government have utterly failed to provide the policing, schooling, or other tangible benefits associated with taxes. There is literally no incentive to abide by that part of the social contract other than the vague fear that they'll be called in one day or forcibly evicted. The state is acting in bad faith.
pkaye 12y ago
That is what we did in California. We started capping the rate of growth of property taxes. Now old people and companies pay little property taxes since they bought the property long ago. Meanwhile the young people usually end up paying the bulk of the property taxes (along with sky high mortgages.)
AnthonyMouse 12y ago
> Property taxes could be eliminated and other taxes raised for a revenue neutral solution. The perfect solution for this is to eliminate both property tax and the mortgage interest tax deduction and let them cancel each other. For most people it makes no difference, but we stop kicking little old ladies out of the homes they own just because they can no longer afford the property taxes.
- icebraining 12y ago
  Would they cancel each other? In value, I mean? Seems like the property tax would cover much more than mortgaged houses.
  - AnthonyMouse 12y ago
    The numbers depend on several variables, but they seem to be in the same ballpark. The amount people owe on their mortgages is generally in the neighborhood of the assessed value of their homes. People may make some headway into actually paying off the mortgage, but the tax deduction makes that financially unattractive (better to pay off all other debt before the mortgage because the interest rate is lower and the interest is tax deductible) and housing crisis notwithstanding the assessed value is generally lower than what people pay for houses to begin with. So you're really comparing tax rates against approximately the same base. Then you only need to know the mil rate, the marginal income tax rate and the loan interest rate. Plug in typical numbers and they end up within an order of magnitude of each other one way or the other (e.g. somewhere around 2%). Unless your point is that property tax applies to more than single family homes, but there is no reason we have to eliminate property tax for e.g. commercial property.
mullingitover 12y ago
> If you bought it, it should be yours. I'm deeply uncomfortable with the notion that you must always pay rent to the government on something you ostensibly own, or you get the boot. > There are so many ways this could be addressed. Property taxes could be eliminated and other taxes raised for a revenue neutral solution. I made this same argument in my high school civics class. As I recall, the deal is you're not paying 'rent' on the property but for the services that property receives courtesy of the state/nation (e.g. fire, police, protection from invading armies, etc). Real estate taxes are a pretty progressive tax, I'd hate to see landowners (generally in the upper echelons of income distribution) get a tax break and have that passed down to the lower tiers with something horribly regressive like sales tax (which is the general go-to funding scheme). It'd be a lot better to eliminate all other taxes and make all government revenues come from a flat land value tax.
- Scramblejams 12y ago
  There are plenty of ways to pay for the services the property owner receives courtesy of the state/nation. It doesn't have to be by a tax that in the case of arrears results in eviction of the property owner, and many taxes can be made as progressive as you like.
  - mullingitover 12y ago
    > It doesn't have to be by a tax that in the case of arrears results in eviction of the property owner, and many taxes can be made as progressive as you like. As a renter, I have a hard time feeling sympathy for the downtrodden landowning class. While there may be cases where an unfortunate landowner is forced to liquidate and find a place to live that's in line with their income, there are more cases where a drop in real estate tax simply means the landlord gets a better profit margin.
    - Scramblejams 12y ago
      If there's a big enough reduction in property taxes, the market will adjust, absent other dominating effects, and your landlord's margin will be reduced. Also consider that the vast majority of the landowning class consists of a person or family that owns one SFR, and most-to-all of their wealth is tied up in it. Those are the people that will get hurt if they can't keep up with property taxes, and it includes most of the middle class that isn't renting. I rent too. My landlord is not wealthy. If he can't cover his property taxes, then I'm the one who gets the boot. And lest you think this is mostly a theoretical consideration, there were enough cases where an unfortunate retiree was forced to liquidate that it prompted the California electorate to pass Prop 13, which froze property taxes. If real estate values increase rapidly, for whatever reason, a property tax that rides that slope creates terrible injustices.

angersock 12y ago

I think it's even more screwed up than that, right? One pays property taxes in order to get the benefits of the people they pay taxes to. It looks like the local and state government have utterly failed to provide the policing, schooling, or other tangible benefits associated with taxes. There is literally no incentive to abide by that part of the social contract other than the vague fear that they'll be called in one day or forcibly evicted. The state is acting in bad faith.

pkaye 12y ago

That is what we did in California. We started capping the rate of growth of property taxes. Now old people and companies pay little property taxes since they bought the property long ago. Meanwhile the young people usually end up paying the bulk of the property taxes (along with sky high mortgages.)

AnthonyMouse 12y ago

> Property taxes could be eliminated and other taxes raised for a revenue neutral solution. The perfect solution for this is to eliminate both property tax and the mortgage interest tax deduction and let them cancel each other. For most people it makes no difference, but we stop kicking little old ladies out of the homes they own just because they can no longer afford the property taxes.

icebraining 12y ago
Would they cancel each other? In value, I mean? Seems like the property tax would cover much more than mortgaged houses.
- AnthonyMouse 12y ago
  The numbers depend on several variables, but they seem to be in the same ballpark. The amount people owe on their mortgages is generally in the neighborhood of the assessed value of their homes. People may make some headway into actually paying off the mortgage, but the tax deduction makes that financially unattractive (better to pay off all other debt before the mortgage because the interest rate is lower and the interest is tax deductible) and housing crisis notwithstanding the assessed value is generally lower than what people pay for houses to begin with. So you're really comparing tax rates against approximately the same base. Then you only need to know the mil rate, the marginal income tax rate and the loan interest rate. Plug in typical numbers and they end up within an order of magnitude of each other one way or the other (e.g. somewhere around 2%). Unless your point is that property tax applies to more than single family homes, but there is no reason we have to eliminate property tax for e.g. commercial property.

mullingitover 12y ago

> If you bought it, it should be yours. I'm deeply uncomfortable with the notion that you must always pay rent to the government on something you ostensibly own, or you get the boot. > There are so many ways this could be addressed. Property taxes could be eliminated and other taxes raised for a revenue neutral solution. I made this same argument in my high school civics class. As I recall, the deal is you're not paying 'rent' on the property but for the services that property receives courtesy of the state/nation (e.g. fire, police, protection from invading armies, etc). Real estate taxes are a pretty progressive tax, I'd hate to see landowners (generally in the upper echelons of income distribution) get a tax break and have that passed down to the lower tiers with something horribly regressive like sales tax (which is the general go-to funding scheme). It'd be a lot better to eliminate all other taxes and make all government revenues come from a flat land value tax.

Scramblejams 12y ago
There are plenty of ways to pay for the services the property owner receives courtesy of the state/nation. It doesn't have to be by a tax that in the case of arrears results in eviction of the property owner, and many taxes can be made as progressive as you like.
- mullingitover 12y ago
  > It doesn't have to be by a tax that in the case of arrears results in eviction of the property owner, and many taxes can be made as progressive as you like. As a renter, I have a hard time feeling sympathy for the downtrodden landowning class. While there may be cases where an unfortunate landowner is forced to liquidate and find a place to live that's in line with their income, there are more cases where a drop in real estate tax simply means the landlord gets a better profit margin.
  - Scramblejams 12y ago
    If there's a big enough reduction in property taxes, the market will adjust, absent other dominating effects, and your landlord's margin will be reduced. Also consider that the vast majority of the landowning class consists of a person or family that owns one SFR, and most-to-all of their wealth is tied up in it. Those are the people that will get hurt if they can't keep up with property taxes, and it includes most of the middle class that isn't renting. I rent too. My landlord is not wealthy. If he can't cover his property taxes, then I'm the one who gets the boot. And lest you think this is mostly a theoretical consideration, there were enough cases where an unfortunate retiree was forced to liquidate that it prompted the California electorate to pass Prop 13, which froze property taxes. If real estate values increase rapidly, for whatever reason, a property tax that rides that slope creates terrible injustices.