from Hacker News

High property taxes are good

by brockwhittaker on 7/20/22, 4:50 PM with 597 comments

by cbm-vic-20 on 7/20/22, 5:10 PM
Land value taxes are even better. Property taxes provide a disincentive to making the land more productive. A land value tax would incentivize residential landowners to build more units which provides more supply and would lower rents.
by fleddr on 7/20/22, 10:17 PM
I'm struggling to make sense of the cause and effect in the article:
"The high cost of property taxes have long pushed away speculative investors as it has pushed the carrying cost beyond what is profitable to hold as a passive investment long-term."
Alright, so now the speculative buyers are gone and we're dealing with ordinary home buyers that actually occupy their home. These genuine owners are paying high property taxes. Next:
"This has led to is a glut of high quality housing at very low prices. The amount of money one needs to save up for a downpayment in Chicago on a 2BR in the city center is 5x lower than in San Francisco or New York."
How does specifically a high property tax for genuine buyers lead to lower prices? Because of less demand from speculators? If so, why not just get rid of speculative buying (simply make it illegal)? What does it have to do with property tax for ordinary citizens?
And what on earth does Chicago have to do with San Francisco or New York?
by btilly on 7/20/22, 5:20 PM
And, thanks to Proposition 13, California has entirely removed this policy tool from consumer housing.
A tremendous amount of our problems, from high rent to gridlock, can be traced back to this decision.
by js2 on 7/20/22, 5:14 PM
From https://en.wikipedia.org/wiki/Land_value_tax
> Property taxes discourage construction, maintenance, and repair because taxes increase with improvements. LVT is not based on how land is used.
From https://www.strongtowns.org/journal/2019/3/8/if-the-land-tax...
> The problem is that the land tax component of a traditional property tax is too small to deter land speculation. Although property taxes vary from place to place, they are typically between 1% and 2% of the property's total value paid annually. If inflation is low, then for longtime property owners, this amounts to roughly the same cost as if they paid a one-time sales tax on the property of between 10% and 20%. Thus, the property tax applied to building values inflates their price by between 10% and 20%. And the property tax applied to land value allows 80% to 90% of publicly-created land value to accrue as a windfall to landowners. Thus, typical land taxes are too weak to discourage land speculation.
Etc. https://duckduckgo.com/?q=economist+land+use+vs+property+tax...
by sinecure on 7/20/22, 7:03 PM
There is so much incompetence and political game playing regarding property taxes. I work in commercial real estate development. We negotiated a TIF district in a small midwestern town to help redevelop their vacant mall. In theory, if we could redevelop the mall and fill it with new stores, the sales taxes and property taxes from this growth would greatly benefit the city over the long term and help finance this risky project.
First we came into battle with the school district. They would not allow us to build apartments on the mall site because "renters don't contribute to property taxes for the school", even though the citizens of this town need rentals because not everyone can afford a home. It then came to light that the city had been paying the school district out of their operating budget... which is illegal, schools can only be funded by property taxes. But would any politician want to go to war with the school district because they had accidentally been paying them illegally with taxpayer dollars? No way, they'd be voted out for attacking schools. So the school district continues draining the operating budget from the city to this day, while also getting their share of property taxes.
Enter the county assessor. We went back through all the assessment records and discovered that the county assessor had not re-assessed the commercial properties in the area for 8 years... meanwhile jacking taxes up on single family homes annually. Essentially they were giving businesses a freeze on property taxes while shifting the burden onto homeowners. If the county wasn't reassessing commercial real estate, than our TIF development couldn't demonstrate growth as the taxes would not change! So we tried to shake the hornets nest and let the county and city know that their taxpayers were being taken advantage of...
What was the end result? Why had they not been reassessing commercial properties? Incompetence, the assessor was some idiot who was voted in because he had the "D" next to his name and did not know anything about assessing property taxes and argued that he was simply "too understaffed" to assess commercial properties for the last 10 years.
Now imagine a whole country where massive, expensive errors like this can play out without anyone noticing for nearly a decade... it's frightening how broken, corrupt, or incompetent our government is in the United States.
by tptacek on 7/20/22, 6:04 PM
High property taxes are clearly not intrinsically good; they're passed on to renters, and so they decrease affordability. Land value taxes sidestep this (increasing density decreases marginal tax burden on tenants), but they're not going to happen. You have to design policy for the world we actually have, not the one you'd prefer to live in.
(Property taxes are a real problem where I live; we're an upper-middle-class enclave directly adjacent to the roughest part of Chicago, and affordability issues prevent people in Chicago from moving across the border to get our services. In the world we actually live in, annexing the Village I live in would make more public policy sense than raising property taxes, which gives you a sense of how clumsy those taxes are as an intervention.)
by jmyeet on 7/20/22, 10:32 PM
This is one area where (I hate to say it) the red states have tended to do a better job than the blue states.
Take Texas as an example. Up until this last year at least, Texas had relatively low property values but high property taxes. But high property taxes on a $200,000 house aren't the end of the world.
But here's a big one: in Texas, seniors (65+) can defer their property taxes to be settled upon their death. This allows seniors to stay in their house if they really want but incentivizes seniors to downsize to avoid passing on that liability onto their children.
This is exactly what you want.
Compare that to California, for example. "But what about the Seniors?" led to Prop 13, which was a massive tax giveaway to Disney and affluent property holders. Capping property taxes deprives the state of taxes to fund services for no good reason.
Even worse, when your children inherit that house, they inherit the house on a stepped up basis (meaning they pay no capital gains tax and the capital tax base gets reset to the market value so if you sell immediately you won't pay any CG tax) and children and grandchildren can inherit the artifically low property tax rates.
New York has a different set of problems. A big one is that single family homes are subsidized. A $1m SFH will pay less than half the property tax of an equal value condo. And there's all sorts of caps on property taxes on SFHs too.
Additionally a $100m condo only pays about 10-15x the property tax of a $1m condo in NYC.
I'm a big fan of making property speculation less lucrative. High property taxes are a good thing. We need to stop giving away money under the auspices of "but what about the Seniors?"
by freedude on 7/20/22, 7:57 PM
Coming from a state with a higher property tax rate I can qualify this by saying higher is not better. Taxes are always a disincentive. While the author claims it is a disincentive to sitting on a property and is comparing it to the effect on price like the FED's interests rates, these comparisons are myopic. He misses the bigger picture of longevity of private property ownership, the Constitutional protections of a property owner, and the inevitable results of the state seizing the property for back taxes. The long term benefits of the first two are long proven and the cold destruction of a member of a community the result of the last.
Oh yeah, and the higher tax gets passed to the renter/leasee in higher rents and is a further disincentive to usage and investment.
by goatcode on 7/20/22, 7:44 PM
Here's a crazy idea: 0% for primary residence, 50% for income properties (rentals, etc.). Will it kill renting? Heck no, not for property owners who live in one of their own units, at least. It might affect individuals and entities who hoard and exploit people, though.
by hedora on 7/20/22, 5:15 PM
The article overlooks one important factor: Raising property taxes would lower house values, reducing loan sizes, and therefore bank profits. We can't have that money being squandered on social services or infrastructure.
by social_quotient on 7/20/22, 10:51 PM
Maybe instead of messing with the money via the fed and then finding volatility in housing we should just end the fed. Housing becomes a safe haven asset to avoid the other ramifications of fed policy namely inflation and the machinations of policy qe/qt, contractions and tightening. Yes it’s not in a vacuum but… we didn’t get here by accident.
Taxing and taxing higher on property is an assault on our ability or “own” property which is a freedom. Free societies have property ownership. Higher taxes whilst monetary devaluation seems like the system now wants to take away our ability to own things.
https://en.m.wikipedia.org/wiki/End_the_Fed
https://thehill.com/opinion/finance/570895-the-debate-we-sho...
by clintonwoo on 7/20/22, 9:37 PM
I agree with this article, housing shouldn't be an "investment" but rather a place to live and have a good life.
By taxing it, it provides disincentive for people to use it as an income generating or speculative asset.
We shouldn't view housing as a way to "get rich" but housing actually provides much better utility if it's price is stable and not prone to boom bust cycles. Since more people would be able to buy at any given time for their budget if prices stay low.
by kmeisthax on 7/20/22, 5:28 PM
If the homevoter hypothesis is true then the counterargument to this is just the argument itself. Property taxes cool speculation, but I'm me, and I bought into the neighborhood and thus want to see line go up.
Yes, local politics is inherently more tailored, but it's also more vulnerable to conflicts of interest. Most local town councils are controlled by an oligopoly of the loudest homeowners who will vote down anything that is perceived to impact their home prices. The people who want affordable housing are not part of the voting quorum because they do not live or own the neighborhood.
In other words, don't say the quiet part out loud!
by Blackstrat on 7/21/22, 1:55 PM
Generally, high taxes on anything are bad. Taxation facilitates a transfer of assets from the productive sector to the non-productive sector, e.g., from the homeowner to the government. The recipient then uses the money to further their plans without regard to the taxpayer. It has always been that way. Using econo-speak doesn't make it any less true. Looking at cities like NYC, eliminating rent control would do more for the housing market than raising property taxes.
by recursivedoubts on 7/20/22, 5:07 PM
High property taxes are good on non-owner occupied homes.
by beefman on 7/20/22, 6:26 PM
Threads about real estate are invariably overrun by clueless 20-somethings who think 'muh zoning' will let them afford property in the [elite metropolitan neighborhood]. Statistically none of you will be able to afford a home here; my advice is to leave while the leaving's good.
Especially if you were lured here by some VC who sold you a metric ton of variance and went to the bank with the drift. But hey, they're on your side with the whole zoning thing.
When you strip away the politics and bogus economics, house pricing is just the adult version of lunch table drama. That drama is actually a microcosm -- everyone in the cafeteria was selected at the real estate level.
You may have been raised to think you could be elite, but only a small minority can be. And if you're downvoting comments because they imply you're not...
It is cruel, but changing it would require far more drastic measures than proposed here.
by hahaxdxd123 on 7/20/22, 5:10 PM
High property tax gets us to closer to a land value tax, so yes.
by mdcds on 7/20/22, 7:30 PM
If speculation is the problem, then making expected return from real estate investments less than expected return from risk-free or low risk investments should fix it.
Something like, if 10 or 20-year US Treasury bond pays more than you'd make being a landlord and you expect little to zero asset appreciation, then there is no incentive getting into real estate.
And it's possible to discourage house flipping by introducing some sort of friction. Like a high tax of some sort that is applied only if you sell sooner than X number of years (let's say 5)
by nayuki on 7/20/22, 7:31 PM
> High property taxes are good
Not necessarily. I've learned that at least in Toronto, the property tax rate is derived from the budget instead of the other way around. Let this article explain: https://torontoist.com/2016/12/how-property-taxes-work-toron...
> With sales and income taxes (which can only be levied provincially and federally) governments establish a tax rate, and then see how much money that brings in.
> Each year municipalities decide how much money they need to bring in, and then set their property tax rates accordingly, to ensure they collect the requisite sum. They start from the total they need to raise, in other words, and work backwards to figure out what tax rate will yield that amount.
Because of this "backward" system of tax calculation, if every single building doubled in value, the tax rate will be halved, and the city will receive the exact same revenue.
So if you raise the property tax rate more than what it should "naturally" be, what will you do with the budget surplus? What will you spend it on?
by BLO716 on 7/20/22, 5:50 PM
The real estate industry is a closed looped system, and because its monopolistic, anti-free market, and dealing with a finite product that simply trades hands its golden age was done after the great expansion of the United States after the Louisiana Purchase and the Mexican Treaties of 1848.
This a foundational industry that pitted the upstate New Yorkers and the agrarian Virginians against Alexander Hamilton at almost every corner of his life in the establishment of free markets disruptions with the Bank of New York and later the Department of Treasury.
Disruption can be seen in vertical markets of big cities and land creation like that of China in the South China Sea with man-made islands and expansion of territorial rights, but outside of that it's golden age is gone and the taxation will only become more intrusive for programs as our populous grows and the need to extract support for the expansion from the adult working class is through taxation.
Hopefully this isn't rambling, but rather insight into how perverse the market has become because of no more land, and way more people.
by veritas20 on 7/20/22, 9:49 PM
it saddens me that we have not put more thought into this topic and we constantly put our education, safety, and services on the economic roller coaster.
no matter how much your home is worth today or in ten years you and other in the community want a standard level of education, safety, and services from your local governments. this should be priced as a service based on the cost to provide it to the members of the community and not based on dynamically changing home values
property taxes should have a baseline cost to cover the essential services (schools, critical infrastructure, safety, etc.) that is the same for everyone (no exemptions) and a variable cost for the non-essential services (parks, beautification projects, etc.) (very limited exemptions) that can be based on the value of your home or land
this way the essential services are always funded and not impacted by economic downturns or property appraisal disputes/challenges and local governments don't have to play the game of increase the millage rate to make up costs for essential services
by always2slow on 7/20/22, 7:30 PM
This article doesn't take into account the negative migration that's been happening from Cook county for the past two decades. Less demand means lower prices.
Also the claim that Chicago even has high property taxes for housing isn't really true. See here: https://www.rosenfeldinjurylawyers.com/news/chicago-property... and here: https://www.lincolninst.edu/sites/default/files/pubfiles/50-...
Currently trapped renting in a high property tax area because the monthly tax bill would be as high as the mortgage payment. This rent trap is starting to feel real permanent because any raise in the property tax just gets passed through to the renter when they raise the rent each year.
by chiefalchemist on 7/20/22, 5:57 PM
> "This has led to is a glut of high quality housing at very low prices."
Yes, but this (obviously) doesn't mean this housing is more affordable. It's not. Sure the razor is less but the blades (i.e., taxes) count as well. Both come out of the same pocket, so to speak.
Housing prices are a function of affordability, and that is the collective sum of all associated payments, not just mortgage.
So while we're on the topic, this is why the "college loan debt means more people can't afford to buy" logic (?) doesn't work. Eliminate that debt and prices will go up. Why? Simple! Because the market can bear higher prices.
Roughly the same can be said for raising the minimum wage. Eventually, housing will eat that up as well. It just takes longer because leases are one-year cycles (and perhaps other local rent-increase limits).
What we need is more supply. The only way to truly lower prices is to increase supply. Anything else is smoke & mirrors.
by abeppu on 7/20/22, 9:57 PM
If you want to tamp down on speculation, can't we be a little more creative and targeted than just high vs low property tax rates?
- Some cities are already getting into vacancy taxes; here the problem seems to be enforcement. No one's going door to door in luxury condo buildings looking for empty ones.
- Can a tax due when a property is sold be based on how long the seller owned the property? If you lived there for 20 years and now you're moving to downsize, you pay a low rate. If you held it for 9 months to renovate and flip it, pay a high rate.
- Can a tax rate due when a property is sold be based on the number of homes the seller has been purchased in the past 5 years? If you've been a resident homeowner, low rate. If you're a development company bought subdivision land and is now able to sell dozens of houses, low rate. If you're a speculator who has bought several homes, and are flipping them, high rate.
by googlryas on 7/20/22, 6:43 PM
But what do Chicagoans get from their high property taxes that New Yorkers don't get with their low property taxes? Services seem about similar in both places to me(though, there is a huge swath I don't have experience with, like services for the poor or school services).
by beefman on 7/20/22, 5:31 PM
This article argues that relatively high property taxes are good. It's a geographically zero-sum situation. Real estate is a rivalrous good and people will pay as much as they can afford to buy it. High property taxes put political pressure on interest rates, which in turn have broad effects on the economy.
Economic mechanisms like this, which don't change anything in the physical world, almost never have any long-term impact, positive or negative, since the economy is a densely-connected network. Findings of large effects depend on stopping accounting somewhere, and you can get positive or negative findings depending on where you stop.
Money juggling is a great distraction from what really matters: physical quantities and actions.
by raymondh on 7/20/22, 11:47 PM
My experience of high property taxes is that it no longer feels like you own a home. You pay rent on it forever. At any time the rent can rise to more than you can afford. I own my home outright but likely won't be able to stay when I retire.
by njarboe on 7/20/22, 5:32 PM
Maybe subsidizing 30 year mortgages with low down payments is not such a great idea for the general populous. Imagine if house payments were similar but you paid off your mortgage in 10-15 years instead of 30. That would be a much better state of affairs.
by tosser0001 on 7/20/22, 5:15 PM
"interest rates are a powerful tool to help control home prices"
Unless you're paying cash, most people think in terms of what their monthly payment will be. So driving down the price may not make any particular house any more affordable.
by kkfx on 7/20/22, 7:33 PM
I totally disagree because high property taxes means people would be pushed toward small and small, bad and worst houses. As a result instead of encouraging remote work and energy saving high taxes encourage crappy popular housing that waste much more energy AND can't be improved.
At maximum I agree about taxing homes depending on their energy consumption (all sources) to encourage modern house development. But definitively not high taxes on properties. I'm Italian and I've seen the effect of them destroying the market AND pushing people toward crappier and crappier homes. It's not just a personal idea.
by jelliclesfarm on 7/20/22, 10:54 PM
I have generally found it to be true that only those who don’t pay property taxes..that is, those who don’t own property by virtue of paying for it and/or have inherited property..are usually the ones who clamour to increase property taxes as a punitive measure.
In other words, the assetless classes support taxing those with earned fixed assets.
When reframed this way, the article reads to me as a high falutin petty and bitter whine.
All taxes are theft. The only justifiable tax is a tax on consumption and perhaps a tax on children because population increases exponentially. That would take care of all the bundle of taxes and simplify the tax code.
by jeffbee on 7/20/22, 5:42 PM
I have nothing against property taxes and I think they are good and should be higher - as the article says, the price of the houses stays the same and the government gets a bigger cut at the expense of land speculators. That's a good thing.
However the arguments feels defective because it uses Chicago as an example. Surely the reason housing is plentiful and affordable in that city is because it has been slowly depopulating for decades and it currently only 75% as populous as it was at its peak.
by jacksnipe on 7/20/22, 10:33 PM
I always thought the low property taxes in NYC were twofold:
1. The absolutely staggering incomes at the top top end in NYC make income taxes a more effective revenue source.
2. In addition to property taxes, if you own an apartment in a building, there are a lot of other monthly costs. As I’m writing to this, it occurs to me that they may be completely equivalent to the maintenance costs on a house, but I suspect that condo and co-op boards are not nearly that efficient.
by datavirtue on 7/20/22, 5:22 PM
Neighborhood a few minutes from me has an insane tax rate. It comes to $1000 a month for a $325k house.
Keeps the riffraff away...and me...but they can afford their roads so...
by monksy on 7/20/22, 7:21 PM
There is a lot of frustration over the blanket example they used for Chicago. Is Chicago cheaper than NYC/SFO? Yes.. does that mean it's affordable for the area? No. We have encountered quite a lot of inflation in the housing market due to people from the HLOCs moving in. It's screwing us over pretty badly.
The prices are like that due to the labor market and that we've been a blue collar city for the longest time.
by EddieDante on 7/20/22, 6:40 PM
What's the deal with Brock Whittaker's website at brooock.com, anyway? It only seems to have one page: <http://brooock.com/a/property-taxes-are-good>. There's no home page, no list of other posts. Kinda disappointing, really, since I was curious to see what else this guy had to say.
by curious_cat_163 on 7/20/22, 8:57 PM
I would want to see statistical backing for this. Kindly share if you know of any reasonable models that have studied this.
—
FWIW: Chicago has high property tax rate and it does seem to correlate to relatively steady median price movements.
But that is just one example…
There are likely other factors at play in Chicago as well: number of units of supply per capita and quality of public transportation come to mind as two that might have some bearing on housing prices.
by firloop on 7/20/22, 6:44 PM
This article doesn't provide any reasons why a property owner should want lower property taxes; why would you want to constrain prices and prevent speculation?
I don't own any property myself and am sympathetic to the idea of raising property tax, but many arguments for LVT/raising property taxes don't paint a convincing argument for why property owners should vote against their self interests.
by binarymax on 7/20/22, 5:50 PM
An effective 2.5% property tax, such as the example given for Chicago, is not high.
Try living in NY, where effective tax is between 3.5% and 5% (mine is 3.8 in the city of Rochester). It’s really hard for people to become homeowners at that rate, especially when the market goes up and an appraiser can show up at any time and re-assess your value and raise your taxes.
by cryptonector on 7/20/22, 10:27 PM
In Texas property tax functions as an income tax by proxy, as the state lacks an income tax but redistributes property tax monies from rich school districts to poor ones. Therefore property taxes are high. Well, high compared to many other states, though not compared to, say, New Jersey. This is not really healthy.
by 999900000999 on 7/20/22, 11:28 PM
Like most things, this is a complicated problem.
The only way to actually make a good cheaper is to produce more of it.
But home owners don't want their homes to stop increasing in value.
If their was a bill in Congress to magically double the housing supply, I guarantee you it wouldn't pass.
Plus passing a property tax hike won't get you re elected.
by FpUser on 7/21/22, 12:59 AM
What a piece of BS. High ever rising property taxes are good at pushing older people out of their houses. It is fucking immoral. If the author is so concerned about speculative investors (yes they are huge problem) then this problem must be addressed separately. Not difficult to do at all.
by dmfdmf on 7/20/22, 5:48 PM
Property taxes are unconstitutional and immoral. They are an implicit nationalization of all property because there is no way to own property unencumbered. Implicitly the govt owns all the land and charges you rent. The level, high or low, is irrelevant to the principle.
by pmontra on 7/20/22, 8:03 PM
The house where one lives: no taxes. Other houses, tax them a lot especially if they are not rented.
by DevKoala on 7/20/22, 11:21 PM
> This has led to is a glut of high quality housing at very low prices. The amount of money one needs to save up for a downpayment in Chicago on a 2BR in the city center is 5x lower than in San Francisco or New York.
That is because it is Chicago and not SF. Not because of taxes.
by ketchupdebugger on 7/20/22, 8:01 PM
property taxes are used to pay for services that the local government provides. when property taxes are high, it means that either the local government is proving more services, the local government is in debt and needs to raise taxes to finance its debt, or the cost of those basic services has risen. At the end of the day your local government needs to spend almost every penny it gets. If they have extra money, they are going to spend it on stupid things like tanks for the police.
High property taxes will make housing cheaper, but it wouldn't make housing affordable. Sure that house might only costs 100k but with a 2k per month property tax, no one can afford it.
by cafard on 7/22/22, 2:16 PM
They are a fine way to build up a solid conservative voting bloc among the elderly. They have property that has appreciated, but their income is well down (usually) from their peak earning years.
by ahallock on 7/20/22, 6:56 PM
Not if you're retired on fixed income. My parents' property taxes kept going up year after year in upstate NY -- one of the deciding factors when they moved. It's a shame because my dad put so much into that property.
by nrmitchi on 7/20/22, 5:30 PM
I'm not disgreeing that there can be valid benefits of higher property taxes.
The problem with it though is that it is a very regressive tax, especially in states that get the majority of their income from property tax as compared to income taxes (I'm looking at you Texas).
> They can be adjusted annually based off the needs of a local market
Or, in the case of Texas, a very large portion of property taxes in urban centers ends up as recapture and goes into a state-controlled slush fund. These portions (school taxes) are not actually adjusted at all.
> the money collected from property taxes doesn't evaporate from a local area
See above statement again. This may be true for city-level property taxes though.
> Retirees and low income individuals are often able to make cases to reduce their tax burden
I would disagree with this. There are exceptions written into the law that provide exemptions for some of these groups (which are often abused and disincentivise "good" use), but overall lower-end properties have many more comparables to set value based off of, and tends to be much closer to "market". These residents also don't tend to have the funds to many these arguments, and commission-based tax-appealers don't stand to make much money taking on these cases (the absolute dollar value is relatively low). Further, high-value properties without many comparables are the easiest ones to argue for lower tax burden on.
Finally, when property values actually do decrease (due to central bank action on interest rates, etc) it can be difficult to get the assessed value lowered without an actual sale.
Tldr, the current implementation of property taxes in many locations is extremely regressive.
by exabrial on 7/20/22, 10:58 PM
Ok what if you're a poor person and you want to buy a home in a rich neighborhood? Ope, guess you can't! Government is going to fine you for wanting something better for yourself.
by krnlpnc on 7/21/22, 12:29 AM
It seems like the higher taxes should be applied to non primary residences, along with perhaps some kind of penalty built in for holding the property for only a short period of time.
by karaterobot on 7/20/22, 7:39 PM
> And perhaps, the best attribute: the money collected from property taxes doesn't evaporate from a local area like it does when borrowers pay higher interest rates. It goes back into the local neighborhood, leading to better local infrastructure and higher quality schools.
This much is demonstrably false, at least where I live. I don't even pay property taxes to the city, I pay them to the county. There's no tie between those funds and my neighborhood. Then, a lot of the taxes are passed from the county up to the state as well, where it's further spread out.
by vanilla_nut on 7/20/22, 5:07 PM
In my region of northern New Hampshire, there are a lot of retired folks with houses rising from $200k-ish values to closer to $500k-ish values in the last 5-10 years.
As such, there's a lot of discussion around lowering property taxes to help these retirees.
In my opinion? Fuck 'em. Property taxes are a brilliant method of perfectly progressive taxation: you can always choose to live in a cheaper home. If your home is so expensive that you can't afford the property tax, downgrade. Those of us who can't afford property will shed no tears.
by eternityforest on 7/20/22, 6:01 PM
Why are these taxes not progressive? Homeowners shouldn't pay a ton of tax just to stop speculation and airbnb.
by intrasight on 7/20/22, 6:48 PM
Where I live, the government only re-appraises every ten years. So it's a pretty crappy market signal.
by epa on 7/20/22, 11:28 PM
Chicago also has a colder winter than SF and NYC, i didnt see the author price that in their conclusion
by eddof13 on 7/22/22, 5:31 AM
Sales/income tax I can agree with. Property/estate inheritance taxes I do not.
by m0llusk on 7/20/22, 6:06 PM
These remarks about interest rates having an impact on real estate prices are not universally accepted.
by TimPC on 7/20/22, 6:57 PM
The analysis doesn’t go far enough. If you want to stop speculation you should tax land not property.
by pessimizer on 7/20/22, 7:55 PM
Funding local public schools through property taxes is terrible, and makes sure that kids from wealthier neighborhoods get better public schools. Kids are a special case; we even expect people without kids to pay for kids. Public education should be uniform and high-quality, not dependent on local political dynamics and neighborhood wealth (and wealth disparities.)
by RichardHeart on 7/20/22, 11:28 PM
LOL @ credit is too cheap, so increase taxes instead of stop overprinting.
by mech987 on 7/20/22, 5:28 PM
Weird to see Chicago used as an example of good governance.
by ByersReason on 7/21/22, 2:25 AM
Property values for tax calculation purposes are not reassessed round here so you pay on whatever the assessed value was when your bought the property. Sounds nice, but what actually happens is that baby boomers, who bought their houses ages ago, pay essentially no tax on houses. Meanwhile, more recent residents get to foot the bill with sky high property taxes. I know people with previously purchased houses of the order or 5 (yes 5) houses that they are renting out for outrageous rents - all with very low property taxes on them. Please make the normal tax rate lower and actually tax everyone.
by killjoywashere on 7/20/22, 8:26 PM
Brock, would you please date your articles?
by silver-arrow on 7/21/22, 1:18 AM
No, property taxes are completely immoral.
by smallmouth on 7/21/22, 3:44 AM
No. High property taxes are NOT good.
by anm89 on 7/20/22, 6:29 PM
No need for discussion I guess. Someone from the internet has the correct conclusion...
Hard to take stuff like this seriously.
by djfobbz on 7/20/22, 7:59 PM
Said no one EVER!
by dubswithus on 7/20/22, 11:13 PM
All homeowners are real estate speculators.
Wouldn't you also consider anyone buying a "starter home" a speculator? Their goal is to continuously flip their house.
by boredumb on 7/20/22, 5:25 PM
High taxes are bad
by kumarski on 7/20/22, 5:30 PM
If you analyze how tax dollars are spent, you'd disagree.
50% of US GDP is about to become US gov't expenditure.
by edmcnulty101 on 7/20/22, 6:17 PM
I think someones FIRST house should be property tax free up to a certain amount that is reasonably indexed to some home value inflation metric.
Any houses or value after that should be taxed.
I think that the government constantly threatening to take your basic shelter that that you PAYED FOR already and put you out on the street... even though.. I repeat.. you PAYED FOR THE PROPERTY ALREADY..is outright fascism.
by sudden_dystopia on 7/20/22, 5:59 PM
High property taxes are only “good” in this stupid system that we have to reduce speculation. But what would really be good is if we could stop using housing as investments that drive the prices of homes higher via inflationary mechanisms so that the prices of homes remain more stable over longer periods of time. Which is exactly how a lot of other countries housing markets work. In a better system, property taxes should be relegated to the dustbin because it turns property ownership into property leasing which is antithetical to the idea of private property.
by justinzollars on 7/20/22, 5:25 PM
This community is deranged. All forms of taxation are messed up, the funds end up in grifters pockets, funding wars, or in black holes.
The last place I want my money is in a politicians pocket. But this community overwhelmingly supports this concept.
If a slave is taxed at 100% and an indentured servant is taxed at 20% - what does that make you?