It's not just wealthy people, it's most Californians. Rich people don't want affordable housing built in their backyards. Middle-class people want affordable housing, but not if it's going to mean a big tower built close to them. Poor and minority people want affordable housing, but don't want to lose their neighborhoods to gentrification.I have little doubt that much of the cause of California's housing crisis comes from wealthy landowners not wanting to loosen their chokehold on the limited supply of housing by allowing the promotion of more development.
Yeah, so here's the thing. Taxes have to get paid, one way or another.As much as I love the work of Professor Milton Friedman, he was not exactly an advocate for the interests of those living on fixed incomes who managed to purchase and pay off their homes during their working years....
Meaning what, their property taxes effectively go down every single year? Thus forcing CA to figure out other, more regressive, ways to increase taxes? Pass.The only way I think such a proposal would be just is if the basis amount that folks paid on was capped at their original home purchase price with no further increase.
Meaning what, she should be able to increase her net worth by $960,000 and never pay taxes on it? Sorry, but that doesn't sound fair at all.That way an old widowed grandmother collecting Social Security and a small pension and who managed to buy and pay off a home that she and her husband paid $40,000.00 for it in Los Angeles in the 1970sand that is now worth $1,000,000.00 can remain in her neighborhood and pass it on to her descendants preserving the family wealth.
It's not just wealthy people, it's most Californians. Rich people don't want affordable housing built in their backyards. Middle-class people want affordable housing, but not if it's going to mean a big tower built close to them. Poor and minority people want affordable housing, but don't want to lose their neighborhoods to gentrification.
Everyone hates paying taxes, which is why Prop 13 is a third rail for CA politics.
Yeah, so here's the thing. Taxes have to get paid, one way or another.
Property taxes are not regressive, they're generally flat. As the value of the home rises, so does the tax payment. The only way you'll pay more taxes on your home is if the home increases in value.
Needless to say, the people living on fixed incomes would blow a gasket if the value of their home didn't at least keep up with inflation.
The problem that Prop 13 has created for CA is that tax revenues are too heavily based on things like sales and income taxes, which fall during a recession. As a result, revenues drop at exactly the time when the state needs to spend more. Sales taxes are the most regressive type of tax available.
Income taxes are progressive -- until they aren't. The ultra-wealthy now mostly get paid not with income, but with assets. For example, Zuckerberg makes a big deal of getting a $1 salary, but the real reason he does it is because the appreciation on his Facebook stock is so massive, and isn't taxed until he sells any stock. But instead of selling it, what he can do is borrow against it, and roll over those debts indefinitely. When he passes on, the estate can pay any outstanding debts by selling stock -- whose value resets when Zuckerberg passes on. (ProPublica is running a big series on the ways that the ultra-rich use these types of setups to avoid paying taxes.)
Meaning what, their property taxes effectively go down every single year? Thus forcing CA to figure out other, more regressive, ways to increase taxes? Pass.
Meaning what, she should be able to increase her net worth by $960,000 and never pay taxes on it? Sorry, but that doesn't sound fair at all.
Red States do have lower taxes than blue States. Even your own data proves it.
You clearly haven't been to Texas in awhile. Toll roads everywhere, high state property taxes, both of which are regressive taxes.
True in 1940, and even more true today:
"California is a Garden of Eden,
a paradise to live in or to see,
but believe it or not,
you won't find it so hot
if you ain't got the do-re-mi."
-Woodie Guthrie
But hey, you know what would make living in California more affordable for lower and middle income Californians, Checkerboard Strangler? Raising residential property taxes.
-said no lower or middle income Californian homeowner ever.
Sorry friend but as someone who lived in North Texas for a decade, it's an illusion.
Property taxes are through the roof in Texas, and there's a surcharge or a toll for everything, you can barely leave your driveway at this point.
Even the tiny Klan-loving town I lived in, Mansfield (pop. 65000) converted a two track farm rut (SR 360 south of Camp Wisdom Rd.) and an old U.S. Highway (287) to toll roads.
There's almost nothing down there, but you'll pay the toll because 360 is the only real North-South highway that connects cities like Arlington and Mansfield to DFW Airport and all the industrial centers up in North Dallas. (the WHITE section north of I-30)
I guarantee you that you won't be talking about California property taxes once you get a taste of how Texas gets away with "no state income tax".
It's all bait and switch.
So?You clearly haven't been to Texas in awhile. Toll roads everywhere, high state property taxes, both of which are regressive taxes.
Is it that Texas actually has higher property taxes or that California has more residents not paying them? With prop 13 your taxes are locked and if you bought a home decades ago you are essentially paying on a value that that is decades old. If you look at the property tax rates if you bought a home today I doubt you’d save on property tax over Texas, especially because homes under 300,000 exist in most livable neighborhoods in TexasOne of the big myths that Republicans like to sell us is that red states necessarily have lower taxes than blue states. The reality of the situation is much murkier.
Wait, California Has Lower Middle-Class Taxes Than Texas?
Wait, California Has Lower Middle-Class Taxes Than Texas?www.bloombergquint.com
Texas has no state income taxes, but it has some of the highest property taxes in the nation.
The idea that Texas is a low-tax haven is only true for big corporations who reap too many of the benefits.
My fiancé’s parents own their own home, they bought in a very not desirable neighborhood, but back when they bought it was cheap, now they got multiple unsolicited offers every week to buy it sight unseen for many multiples what they bought it for.But hey, you know what would make living in California more affordable for lower and middle income Californians, Checkerboard Strangler? Raising residential property taxes.
-said no lower or middle income Californian homeowner ever.
Really? The klan is active in Mansfield Texas? What do they do? They do monthly pancake feeds? Have a Masonic lodge like meeting hall? I want to see evidence of this.Sorry friend but as someone who lived in North Texas for a decade, it's an illusion.
Property taxes are through the roof in Texas, and there's a surcharge or a toll for everything, you can barely leave your driveway at this point.
Even the tiny Klan-loving town I lived in, Mansfield (pop. 65000) converted a two track farm rut (SR 360 south of Camp Wisdom Rd.) and an old U.S. Highway (287) to toll roads.
There's almost nothing down there, but you'll pay the toll because 360 is the only real North-South highway that connects cities like Arlington and Mansfield to DFW Airport and all the industrial centers up in North Dallas. (the WHITE section north of I-30)
I guarantee you that you won't be talking about California property taxes once you get a taste of how Texas gets away with "no state income tax".
It's all bait and switch.
to an extent yes a low property tax will encourage some people never to sell property if the cost of keeping it is low. That’s not an argument for LVT becauseLow property taxes encourage speculative behavior. If you make the tax negligible for landowners then there is little incentive for them to sell the property to those who will build homes.
your LVT would have to be at a much higher rate then current taxes. If a home sits on a plot worth 300,000 dollars and the improvements are 100,000 dollars, to incentivize the land owner sitting on the empty lot to sell you would need to make the land value tax average the cost of a similar plot with a house, but which one? You’re just shuffling rates and numbers. It’s one of these ideas that seems brilliant on paper but at the end of the day it’s got many practical problems. It’s very telling that when Friedman got involved in Chile the economy went down by a lot and eventually Pinochet replaced miltons judgment with his own and the economy began to stabilize. There is no school solution or white paper proposal that actually works as theorized when it’s implemented.Actually, when the property tax is implemented as a land value tax they are the most progressive of all taxes. In fact, libertarians have advocated for it, including Milton Friedman and founder of the Libertarian Party, David Nolan. LVT discourages speculative behavior that actually drives up the costs of homes/property.
Which of the statements in my post are true or false based exclusively on where I'm located?If I may, Visbek, I want to address your points, but I cannot help but wonder: are you a Californian homeowner?
Uhm... Yeah, the problem is that the current taxes haven't prevented an affordability crisis in California.I was being sarcastic, CS. I will take our current taxation system over a system in which only California’s ultra wealthy and professional managerial class are able to purchase and keep their homes.
So?
Are you incapable of grasping that there is more than one "red" State?
your LVT would have to be at a much higher rate then current taxes.
The argument in favor of LVT is one of these, Milton’s ideology supposes humans are rational and respond to incentives that are “rational” but in reality they’re not. Many people who own an undeveloped parcel of property might sell if they paid a higher LVT, but they might not either. Some people may hold out for higher value, others may have emotional or sentimental connection to the land, someone could be saving it for future use, etc
It's not just wealthy people, it's most Californians. Rich people don't want affordable housing built in their backyards. Middle-class people want affordable housing, but not if it's going to mean a big tower built close to them. Poor and minority people want affordable housing, but don't want to lose their neighborhoods to gentrification.
Everyone hates paying taxes, which is why Prop 13 is a third rail for CA politics.
Yeah, so here's the thing. Taxes have to get paid, one way or another.
Property taxes are not regressive, they're generally flat. As the value of the home rises, so does the tax payment. The only way you'll pay more taxes on your home is if the home increases in value.
Needless to say, the people living on fixed incomes would blow a gasket if the value of their home didn't at least keep up with inflation.
The problem that Prop 13 has created for CA is that tax revenues are too heavily based on things like sales and income taxes, which fall during a recession. As a result, revenues drop at exactly the time when the state needs to spend more. Sales taxes are the most regressive type of tax available.
Income taxes are progressive -- until they aren't. The ultra-wealthy now mostly get paid not with income, but with assets. For example, Zuckerberg makes a big deal of getting a $1 salary, but the real reason he does it is because the appreciation on his Facebook stock is so massive, and isn't taxed until he sells any stock. But instead of selling it, what he can do is borrow against it, and roll over those debts indefinitely. When he passes on, the estate can pay any outstanding debts by selling stock -- whose value resets when Zuckerberg passes on. (ProPublica is running a big series on the ways that the ultra-rich use these types of setups to avoid paying taxes.)
Meaning what, their property taxes effectively go down every single year? Thus forcing CA to figure out other, more regressive, ways to increase taxes? Pass.
Meaning what, she should be able to increase her net worth by $960,000 and never pay taxes on it? Sorry, but that doesn't sound fair at all.
Meaning what, their property taxes effectively go down every single year? Thus forcing CA to figure out other, more regressive, ways to increase taxes? Pass.
Meaning what, she should be able to increase her net worth by $960,000 and never pay taxes on it? Sorry, but that doesn't sound fair at all.
Which of the statements in my post are true or false based exclusively on where I'm located?
Uhm... Yeah, the problem is that the current taxes haven't prevented an affordability crisis in California.
And again: Because property taxes are low in CA, the state taxes citizens in other ways, which are either more regressive (sales tax) or are easy for the ultra-wealthy to avoid (income tax). That's why property taxes are one of the least regressive options available to states.
Did you already forget 2008?These might all be good points, if California were facing a massive continuing budget crisis. But we are not.
Funny how those "multiple streams" didn't work at all in 2008.Due to multiple revenue streams, including the state income tax, gas tax, sales tax and, most importantly, the capital gains tax, we are running at a healthy surplus.
No, they're not. They're just more accurately tracking your wealth.Second, property taxes which are free-floating and track home prices are extraordinarily regressive when property values increase rapidly in relation to one's income.
Property taxes are one of the most stable sources of tax revenue. Home values rarely drop; the 2008 recession was a huge exception. They didn't drop during the 1991 or 2001 recessions. In fact, prior to 2008, the biggest drop in property tax revenue in CA was... the implementation of Prop 13.Finally, I would also point out that home values drop as well, and can lead to massive drops in revenue, as was seen in 2008 through 2010. So there is no ultimately stable source of revenue.
Well, if you want to set up a progressive property tax, go for it. Good luck with that.Oh I am well aware of these methods of tax avoidance. But it does not follow that because the ultra wealthy of silicon valley borrow against their stock ownership in order to avoid paying income or capital gains taxes that we should raise property taxes across the board.
Yes, there is.More regressive? There is nothing more regressive than raising taxes on a person's dwelling....
Actually, that's a bit of a myth.But they have no control over the value of their property. We are bleeding lower and middle-income residents because the cost of living in this state is already too high.
No, actually, it is to REBALANCE the tax structure. Increase property taxes AND reduce other types of taxes such as sales taxes. CA could also afford to make its income tax more progressive.And your solution to this would be raise property taxes, putting an even greater burden on those who have managed to attain home ownership?
...except that those entities will have to pay more taxes on those properties.This is a good argument made on behalf of Blackrock, real estate investment trusts, and other private equity firms who will come in to purchase these expensive homes from the families who can no longer afford them due to raised property taxes.
Dude.It is not an argument on behalf of lower and middle income homeowners or those who wish to become homeowners (or simply to remain homeowners) in a state with such rapidly increasing home prices.
She paid the people who loaned her the money. That doesn't mean she paid her fair share of taxes. You want to give her a free ride.She paid off her home. She paid her dues....
Then why are you saying that "Californians are leaving in droves?"That is the American Dream made all the more possible by Proposition 13.
Funny you should mention that.It is no more unfair than a Roth IRA...
What the what? HERO loans aren't an extra tax, they're just paid with the property tax bill. Even your own article suggests that the state is cracking down on unscrupulous contractors, and that lots of people just didn't understand what they were signing.And having dealt with people who were victimized by predatory HERO loan brokers, I can safely tell you that rapidly increased property taxes on poor and middle-income homeowners makes home ownership impossible.
...and most are even less aware that the big 'liberal' states are helping to fund their low tax high services states. Who owns who?People seem to be unaware that states have to fund their expenditures somehow.
Yeah CA was bad in 2008, when the rest of the world was booming...Did you already forget 2008?
Funny how those "multiple streams" didn't work at all in 2008.
The only reason CA is doing well right now is because the stock market went off the rails.
No, they're not. They're just more accurately tracking your wealth.
Property taxes are one of the most stable sources of tax revenue. Home values rarely drop; the 2008 recession was a huge exception. They didn't drop during the 1991 or 2001 recessions. In fact, prior to 2008, the biggest drop in property tax revenue in CA was... the implementation of Prop 13.
The 2007–2008 Financial Crisis in Review
Learn more about the causes, the events, and the aftermath of the 2007–2008 financial crisis and the Great Recession that followed it.www.investopedia.com
Well, if you want to set up a progressive property tax, go for it. Good luck with that.
Uh... You missed the point.Yeah CA was bad in 2008, when the rest of the world was booming...
I disagree. The tailspin came from the same thing that caused it elsewhere. A frozen credit market reacting to massive built in market fraud.Uh... You missed the point.
The State of California's budget was sent into a tailspin by the 2008 recession, which forced Jerry Brown -- who was considered one of the most liberal politicians in the US -- to slash state budgets to the bone.
One reason why CA's budget was hit so badly was because... wait for it... CA has low property taxes. Normally, property taxes are among the most stable sources of revenues for states. Instead, CA relies heavily on the types of taxes that drop significantly during a recession, notably sales and income taxes.
See the relevance now?
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