Attitudes of the uber-rich

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Originally Posted by MagnificentUnicorn

How does it reduce housing supply if people stay in their homes? If they sold their home they’d need new housing.

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I would say the opposite is more true. If people are forced out of their home there is a good chance it will be purchased by someone else for use as a second home or short term rental. Those directly and immediately reduce the housing supply.

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Originally Posted by J. Barron DeJong

I think there should be much less restrictive zoning so that cities can be more dense and walkable with efficient public transport so that people who want to live in a city can.

That’s a lot of people.

I also think ski towns should allow some more density so employees of the businesses in town can afford to live near by.

If you want more open spaces, then you need to allow housing density. Not forced housing density, but allowed.

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Agree with all of this. But I'd go a step further than "allowed" and heavily encourage denser housing with financial incentives and improved transit nearby. Seems like Socal is still plagued by endless new suburbs being built that are completely car centric. Build up, not out.

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Originally Posted by MagnificentUnicorn

The answer isn’t eliminating Prop 13, it’s actively trying to change zoning to allow high density housing.

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That's a great point. Prop 13 was absolutely necessary IMO. The answer isn't getting rid of it. The answer is merely getting not letting the NIMBY'ers from putting up so much red tape that developers can't or don't bother, and just push out to the burbs where it's much quicker/easier to deal with and turn a profit. San Francisco of course being one of the easiest examples to pick on.

https://www.youtube.com/watch?v=ExgxwKnH8y4

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Originally Posted by old goat

You say there are better ways. I'm listening.

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I’d suggest reading the section ‘Alternative Relief Measures’ from the report I linked to earlier (pages 31-36):

https://www.lincolninst.edu/app/uplo...its-full_0.pdf

Starts:

“It is clear that some taxpayers benefit from assessment limits, but many others may receive no protection, and often they are among those most in need of property tax relief. What alternatives exist to assist needy homeowners facing rising property tax bills?


Rather than impose assessment caps and tax rate limits, some states restrict the growth in property tax revenues through levy limits or the growth in individual property tax bills through tax caps. However, these approaches are expensive because, like assessment limits, they tend to reduce taxes without regard to need. Moreover, limitations on total revenue may not be an appropriate response to rap- idly rising individual tax bills if local spend- ing is not the problem. Targeted options for residential tax relief include homestead exemptions, classified tax rates, circuit breakers, and tax deferral programs. Finally, truth in taxation programs are designed to increase transparency and accountability by reporting to taxpayers on changes in the tax base, tax rate, and tax collections.”

Which homeowners in CA receive no protection under Prop 13?

The second paragraph reads like a proposed complication of the tax code. Some of the proposed options are already available, deferral already is an option for low income seniors and the disabled.

What is it about Prop 13 that YOU think is unfair?


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Originally Posted by MagnificentUnicorn

Which homeowners in CA receive no protection under Prop 13?

The second paragraph reads like a proposed complication of the tax code. Some of the proposed options are already available, deferral already is an option for low income seniors and the disabled.

What is it about Prop 13 that YOU think is unfair?


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I feel like I’ve already gone over what I think is unfair: taxing people in otherwise similar economic situation differently - sometimes extremely differently.

It’s kind of a core requirement for good tax policy.

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Originally Posted by J. Barron DeJong

I feel like I’ve already gone over what I think is unfair: taxing people in otherwise similar economic situation differently - sometimes extremely differently.

It’s kind of a core requirement for good tax policy.

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I would hardly call your example of two couples a "similar economic situation"

One bought a place presumably decades ago at a very low price. And the other could afford to buy at current market prices, and would have known and factored in property taxes in their purchase decision.

Could the first couple have a huge bank account? Sure, that's possible. But plenty of long time home owners do not have a ton of savings and would not be able to afford taxes at a market value assessment.

I would say those are two very different economic situations.

Yeah, an elderly retired couple on a fixed income is the same as a younger couple with good incomes and lots of potential for more income growth are the same financially. Is that really your argument? Are you petty and bitter or stupid?


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Originally Posted by evdog

I would hardly call your example of two couples a "similar economic situation"

One bought a place presumably decades ago at a very low price. And the other could afford to buy at current market prices, and would have known and factored in property taxes in their purchase decision.

Could the first couple have a huge bank account? Sure, that's possible. But plenty of long time home owners do not have a ton of savings and would not be able to afford taxes at a market value assessment.

I would say those are two very different economic situations.

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Look, if you’re seriously interested, I’d suggest reading ‘Chapter 4: Equity and Efficiency’ (pages 22-30) of the report I linked:

https://www.lincolninst.edu/app/uplo...its-full_0.pdf

You could also read this short article on different property tax limitation policies:

https://taxfoundation.org/research/a...egimes-primer/

The first of the three policies discussed is assessed rate caps, and there’s a summary at the end.

didn't come here for homework assignments...


fact.

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Originally Posted by m2711c

didn't come here for homework assignments...


fact.

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Me neither, which is why I’m not going to write a paper when it’s already been done.

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Originally Posted by MontuckyFried

That's a great point. Prop 13 was absolutely necessary IMO. The answer isn't getting rid of it. The answer is merely getting not letting the NIMBY'ers from putting up so much red tape that developers can't or don't bother, and just push out to the burbs where it's much quicker/easier to deal with and turn a profit. San Francisco of course being one of the easiest examples to pick on.

https://www.youtube.com/watch?v=ExgxwKnH8y4

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Exactly. I live in sf and Prop 13 has zero to do with development barriers here. As mentioned earlier, I live on a street w a pretty broad range of property tax rates for fairly similar properties. Without P13, i would definitely have been priced out by now and have had to move from the place I’ve lived in for 25 years. The new neighbors are young and can easily afford the rates. The people that have been here as long as I have would not be able to. We bought when the neighborhood was not very desirable and now that it is we would have to leave because some bigly paid tech bro thinks our tax rates should be the same? Gtfo

Prop 13 isn’t a ‘barrier’ to new construction the same way zoning regulations are. It just disincentivizes it, similar to how a sales tax isn’t a barrier to purchasing goods and services, it just disincentivizes it to some extent.

And again, my point is that there are better, more fair ways to keep people in their homes than Prop 13, not that everyone who faces unaffordable property tax bills due to rising home values should have to move.

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Originally Posted by J. Barron DeJong

Prop 13 isn’t a ‘barrier’ to new construction the same way zoning regulations are. It just disincentivizes it, similar to how a sales tax isn’t a barrier to purchasing goods and services, it just disincentivizes it to some extent.

And again, my point is that there are better, more fair ways to keep people in their homes than Prop 13, not that everyone who faces unaffordable property tax bills due to rising home values should have to move.

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I thought your point was that Prop 13 was unfair because similar homes are taxed unequally. That’s how this discussion started.

Under the proposals in your linked papers, that would still happen but it would be more complicated. Some folks close to income thresholds and age limits would be left with intolerable tax burdens. Is that fair to you?

How do you feel about capital gains exemptions on a primary residence, fair or unfair?

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Originally Posted by MagnificentUnicorn

I thought your point was that Prop 13 was unfair because similar homes are taxed unequally. That’s how this discussion started.

Under the proposals in your linked papers, that would still happen but it would be more complicated. Some folks close to income thresholds and age limits would be left with intolerable tax burdens. Is that fair to you?


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Similar homes <and similar economic situations> should be treated similarly.

Close to income thresholds and age limits leading to intolerable tax burdens? That does seem like an insurmountable problem that has never been addressed in any tax code, ever. /s

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Originally Posted by J. Barron DeJong

Similar homes <and similar economic situations> should be treated similarly.

Close to income thresholds and age limits leading to intolerable tax burdens? That does seem like an insurmountable problem that has never been addressed in any tax code, ever. /s

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How would you define similar? There would have to be parameters. That would lead to property tax disparities like I addressed in my last post.

It’s actually addressed by Prop 13 even if indirectly so.

Would you be in favor of a flat income tax rate for individuals with no exemptions? Maybe a pro rated exemption for people at or below the poverty level.


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Originally Posted by J. Barron DeJong

Nope. Live in a relatively new neighborhood, so no big effects from Prop 13 here yet.

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Woah, woah woah. Hang on. I bought my house in Truckee the same year (2016) for $560k. It's currently worth $1.2+ million. So prop 13 has absolutely helped. If property taxes were to double to match the value like they do in some states I'd be forced to sell most likely - or it might be tight anyway.

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Originally Posted by MagnificentUnicorn

How would you define similar? There would have to be parameters. That would lead to property tax disparities like I addressed in my last post.

It’s actually addressed by Prop 13 even if indirectly so.

Would you be in favor of a flat income tax rate for individuals with no exemptions? Maybe a pro rated exemption for people at or below the poverty level.


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I’d let the tax policy experts figure it out.

But how do you define similar? Probably in a similar way we do for income tax purposes.

From what I’ve read I’d be inclined to rely more heavily on tax deferment - because that still allows similar houses to be taxed at similar rates, and because even if you couldn’t afford to live in your neighborhood at current prices, you still get to benefit from living in a desirable neighborhood so it’s fair to pay for that benefit. You could also still have a sliding scale ‘circuit breaker’ on top of that.

And no fucking way am I supporting a ‘flat tax’ income tax.

Tax deferment is the same tax rate it’s just paid upon the sale of the home.


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Originally Posted by TahoeJ

Woah, woah woah. Hang on. I bought my house in Truckee the same year (2016) for $560k. It's currently worth $1.2+ million. So prop 13 has absolutely helped. If property taxes were to double to match the value like they do in some states I'd be forced to sell most likely - or it might be tight anyway.

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I’m saying because my immediate neighbors have also all been in their houses for a relatively short period of time, the discrepancies in our little neighborhood haven’t built up yet.

Along with the policies like tax deferment or circuit breakers which would keep from being forced out due to rapidly increasing assessments, you also need to realize that Prop 13 shifts the tax burden from long time homeowners to shorter term owners - the tax breaks that long term owners benefit from require higher rates overall to generate the needed revenue. (‘Redistributing the Tax Burden’, page 22: https://www.lincolninst.edu/app/uplo...its-full_0.pdf )

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Originally Posted by MagnificentUnicorn

Tax deferment is the same tax rate it’s just paid upon the sale of the home.


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Yes. I think that’s good.

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Originally Posted by J. Barron DeJong

Yes. I think that’s good.

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It’s only if you’re over 55 and have a very low income for CA. This doesn’t encourage people to buy either. Basically you give all your equity to the state because of increased assessments. It’s basically like a reverse mortgage. How is that good or fair?

Most people would never be able to buy and live anywhere they want. That was part of your argument about housing availability.

How old are you and how much money do you make, roughly? Sounds like you want yours but don’t give a damn about people that work hard, buy a house and want to live out their life there. That’s a lot of people.



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Originally Posted by MagnificentUnicorn

It’s only if you’re over 55 and have a very low income for CA. This doesn’t encourage people to buy either. Basically you give all your equity to the state because of increased assessments. It’s basically like a reverse mortgage. How is that good or fair?

Most people would never be able to buy and live anywhere they want. That was part of your argument about housing availability.

How old are you and how much money do you make, roughly?

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I’m suggesting eliminating the assessment cap from Prop 13 and greatly expanding the availability of deferment, as well as a sliding scale ‘circuit breaker’ limit on amounts due annually.

Property tax rate in CA is 1% of assessed value, plus some local taxes. How long are you living in your house where ‘all your equity’ is going to taxes? And remember, rates have to be higher under prop 13 to generate the same revenue.

I’m in my mid 40’s, and our combined household income puts us in the top 10%-15% of CA households (not individuals).

https://dqydj.com/income-by-state/

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Originally Posted by MagnificentUnicorn

Sounds like you want yours but don’t give a damn about people that work hard, buy a house and want to live out their life there. That’s a lot of people.

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I don’t see how that follows from anything I’ve said, or anything I’ve linked to.

Making my rate assessed the same as my neighbors would do exactly that. I’d have to move. The end. Again, the people paying higher rates can afford it and that’s what they are now capped at and will soon enough be paying less than their future neighbors. How is unfair to lock in a tax rate? Should mortgages reset as well? How is it fair my neighbor has a lower interest rate than I do? And again this has nothing to do w any impact on new development. That argument is retarted.

How is it fair that I’m paying tax on the same purchase years later? How is that fair?

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Originally Posted by mcski

Making my rate assessed the same as my neighbors would do exactly that. I’d have to move. The end. Again, the people paying higher rates can afford it and that’s what they are now capped at and will soon enough be paying less than their future neighbors. How is unfair to lock in a tax rate? Should mortgages reset as well? How is it fair my neighbor has a lower interest rate than I do? And again this has nothing to do w any impact on new development. That argument is retarted.

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I feel like I’m banging my head against a wall.

Defered payments, and ‘circuit breakers’ would ensure no one is forced to sell.

It just means that people who’ve lucked into being able to buy and hold an appreciating asset for a long term aren’t being subsidized by those who aren’t so fortunate.

Like, you’re going to sell now, because if you sell your house in 20 years and it’s worth much, much more than what you paid, some of that gain will have to be used to pay back deferred taxes?

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Originally Posted by mcski

How is it fair that I’m paying tax on the same purchase years later? How is that fair?

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Seriously? Arguing against property taxes in their entirety is a whole different ball game, but a quick Google search should give you lots to read on the subject.

You could also read about ‘land value tax’, though it might make your head explode.

You’re thinking short term. Lots of people spend way more than 20 years in a house. Say you buy a house 50 years ago and want to live there for the rest of your life. In many cases your yearly assessed for property taxes would be more than the purchase price of your home. Even with a modest fixed household income of say $80k you won’t be able to pay your property tax and likely won’t qualify for deferment. That’s fair in your world.

In my old neighborhood in the Bay Area my neighbor paid 18k for his house in 1960. I paid 255k for my house in 2001. I didn’t think it was unfair, I thought good for him, I’ll be in the same boat someday. He was living on a pension from being a mail carrier, he wouldn’t be living in that house without Prop 13, I sold in 2003 for 480k. It over a million now.

CA has income, sales and property tax. The first two provide plenty of revenue combined with property tax. Lots of people want to live there, Prop 13 isn’t stopping them.


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