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I live in a state which does something similar to this -- the sales tax is extremely high, and property taxes are laughably low. I have never cared to investiga

I live in a state which does something similar to this -- the sales tax is extremely high, and property taxes are laughably low. I have never cared to investigate it, but my hunch is it protects those who are already land owners, and therefor the economic elite, and burdens renters and other lower income citizens with a disproportionate tax burden.

MagicWishMonkey 11y ago
It's just another way to shift the tax burden from the rich to the poor.
mikeyouse 11y ago
Find your state in Appendix B (Page 27) here: http://www.itep.org/pdf/whopaysreport.pdf http://www.itep.org/pdf/whopaysreport.pdf To see just how much more difficult they make it for the poor.
DamnYuppie 11y ago
My quibble with your assertion is that if property taxes were higher it would also hit the lower income citizens as well. Those property taxes would just be passed along as an increase in their rent. Also it isn't the low income who are being taxed to death it is those who "middle class" who are subsidizing everything. Effectively only 50% of those who file taxes actually owe any taxes.
- crdoconnor 11y ago
  >My quibble with your assertion is that if property taxes were higher it would also hit the lower income citizens as well. Those property taxes would just be passed along as an increase in their rent. Rent is determined by supply of housing and demand for housing, not taxation. Property owners would eat the cost and the price of properties would probably drop accordingly (higher taxes = a less attractive purchase).
  - smm2000 11y ago
    It's true in SF, NY and few other places in US where cost of housing is determined by ability to pay. In the rest of the country cost of housing is a cost of building a house/rental property with a reasonable margin on top - with almost no correlation with local ability to pay (as long as it's higher than cost of building or maintaining a housing unit). If you increase property taxes, it will increase rental prices.
    - crdoconnor 11y ago
      So you're saying that supply and demand only works in SF, NY and a few other places?
      - smm2000 11y ago
        I am saying that supply and demand are not working in SF/NY and a few other places. Or to be more exact supply is non-elastic - increase in demand does not increase supply. In cities with available land if there is a demand for housing, you just build more housing.
- Frondo 11y ago
  Nope. If the landlords could raise the rates, they already would. This whole "cost X gets passed onto consumers" flies in the face of basic economics: the price is what people are willing to pay, separated from what costs/fees/taxes are applied to the supplier.
  - zaroth 11y ago
    Nope? Who would rent property for less than it costs to carry it? If you want to speculate on real estate there are much better ways than renting to low-income tenants below cost. Speaking of Econ 101, when taxes shift the supply curve, what happens next? Some renters are priced out, others get less house for more money. Under no circumstance does some fat-cat middle man reach into their own pocket to help a brother out.
    - krschultz 11y ago
      If that were true, then how come home prices drop when interest rates rise? Are taxes somehow special?
      - zaroth 11y ago
        Home prices drop because affordability per $ financed decreases. How is that in contradiction with increasing taxes leading to increasing rent cost? Take an extreme example, if taxes were $5000/mo for a 800 sq ft 1BR then rent for a 1BR would be greater than $5000/mo. There might be very few units renting at that price and home prices would approach zero or could even become significantly negative if owners had no other way to escape the tax bill. You see this for some properties in Detroit where the tax bill is more of a liability than the house and land are worth so the plot can be purchased for $1 for any sucker who will take it (or is willing to carry to tax liability in the hopes the asset will eventually appreciate beyond the accumulated taxes)
    - Frondo 11y ago
      Sorry, but you're just saying the same thing: that the basic economic principle of price being determined by what the market will bear doesn't apply to housing. Either people will pay more, in which case landlords will raise their rents until people stop being willing to pay more, or people won't pay more, no matter what the cost to the landlord. Nowhere in this does the landlord show up with a tax document and say "see folks, now you gotta pay MOAR TAX".

MagicWishMonkey 11y ago

It's just another way to shift the tax burden from the rich to the poor.

mikeyouse 11y ago

Find your state in Appendix B (Page 27) here: http://www.itep.org/pdf/whopaysreport.pdf http://www.itep.org/pdf/whopaysreport.pdf To see just how much more difficult they make it for the poor.

DamnYuppie 11y ago

My quibble with your assertion is that if property taxes were higher it would also hit the lower income citizens as well. Those property taxes would just be passed along as an increase in their rent. Also it isn't the low income who are being taxed to death it is those who "middle class" who are subsidizing everything. Effectively only 50% of those who file taxes actually owe any taxes.

crdoconnor 11y ago
>My quibble with your assertion is that if property taxes were higher it would also hit the lower income citizens as well. Those property taxes would just be passed along as an increase in their rent. Rent is determined by supply of housing and demand for housing, not taxation. Property owners would eat the cost and the price of properties would probably drop accordingly (higher taxes = a less attractive purchase).
- smm2000 11y ago
  It's true in SF, NY and few other places in US where cost of housing is determined by ability to pay. In the rest of the country cost of housing is a cost of building a house/rental property with a reasonable margin on top - with almost no correlation with local ability to pay (as long as it's higher than cost of building or maintaining a housing unit). If you increase property taxes, it will increase rental prices.
  - crdoconnor 11y ago
    So you're saying that supply and demand only works in SF, NY and a few other places?
    - smm2000 11y ago
      I am saying that supply and demand are not working in SF/NY and a few other places. Or to be more exact supply is non-elastic - increase in demand does not increase supply. In cities with available land if there is a demand for housing, you just build more housing.
Frondo 11y ago
Nope. If the landlords could raise the rates, they already would. This whole "cost X gets passed onto consumers" flies in the face of basic economics: the price is what people are willing to pay, separated from what costs/fees/taxes are applied to the supplier.
- zaroth 11y ago
  Nope? Who would rent property for less than it costs to carry it? If you want to speculate on real estate there are much better ways than renting to low-income tenants below cost. Speaking of Econ 101, when taxes shift the supply curve, what happens next? Some renters are priced out, others get less house for more money. Under no circumstance does some fat-cat middle man reach into their own pocket to help a brother out.
  - krschultz 11y ago
    If that were true, then how come home prices drop when interest rates rise? Are taxes somehow special?
    - zaroth 11y ago
      Home prices drop because affordability per $ financed decreases. How is that in contradiction with increasing taxes leading to increasing rent cost? Take an extreme example, if taxes were $5000/mo for a 800 sq ft 1BR then rent for a 1BR would be greater than $5000/mo. There might be very few units renting at that price and home prices would approach zero or could even become significantly negative if owners had no other way to escape the tax bill. You see this for some properties in Detroit where the tax bill is more of a liability than the house and land are worth so the plot can be purchased for $1 for any sucker who will take it (or is willing to carry to tax liability in the hopes the asset will eventually appreciate beyond the accumulated taxes)
  - Frondo 11y ago
    Sorry, but you're just saying the same thing: that the basic economic principle of price being determined by what the market will bear doesn't apply to housing. Either people will pay more, in which case landlords will raise their rents until people stop being willing to pay more, or people won't pay more, no matter what the cost to the landlord. Nowhere in this does the landlord show up with a tax document and say "see folks, now you gotta pay MOAR TAX".