Are property taxes fair?

[leftysergeant]

Incorrect and contradicted by everything you have posted before about "paying your utility bills". Property owners who see the real value of their holdings rise are most certainly benefitting from the economy.

I am retired and partly disabled, and my house is worth more every year because of someone else's ecconomic activity in which I had no part. Now I must pay more in property taxes or move elsewhere, whether i wish to or not. There is no way that I am recieving a benefit from the increased cost of living in the home which I worked so hard to acquire. Wait till I croak and take a cut out of what I would have left to my son.

 

[Ziggurat]

Why do we pay property taxes?

I mean, I don't pay taxes on my car.

I do. Plenty of states levy a property tax on cars. Didn't you know?

 

[ingoa]

I am retired and partly disabled, and my house is worth more every year because of someone else's ecconomic activity in which I had no part. Now I must pay more in property taxes or move elsewhere, whether i wish to or not. There is no way that I am recieving a benefit from the increased cost of living in the home which I worked so hard to acquire. Wait till I croak and take a cut out of what I would have left to my son.

You bought a house which raised in value? Sell it, and quit whining.

 

[leftysergeant]

You bought a house which raised in value? Sell it, and quit whining.

I'm old and partly disabled and would have to move into a piece of crap house because somme yuppie realestate speculator found a way to jack up the prices around the area where I want to live.

Yeah, right. Makes a lot of sense.

 

[Francesca R]

It is unethical to place a serious tax burden on those who can ill afford to pay. It is even less ethical if it interferes with the tax payer's ability to survive. In my view, the simple value of a person's property is not a fair measure of how much that person should pay in taxes.

Red herring. Neither is the simple value of their earned income. The ethical breach you refer to is not axiomatic with wealth tax.

ALL levels of government should be funded primarily by taxes on the net income of persons or businesses.

It is a misconception that "businesses" pay tax; the tax burden falls on shareholders, employees, customers, creditors and other stakeholders. How it impacts them differentially is hard to measure. However, the growth retarding effect of business profits tax is greater than that of most other taxes, so for that reason it is less ethical, because reducing growth is an "externality" that affects everyone else--and mostly it affects the individuals who lose their jobs or whose businesses fail.

Taxing a small business on the value of its physical plant is simply absurd

Agree, not that it happens in any respect (in the US and UK I believe) other than with real estate. Even that ("business rates" in the UK) is a bad tax--essentially a tax on a factor of production.

Once a business has become profitable, then definitely the business should pay a corporate income tax, and it should be a progressive income tax based on how much financial benefit it derives from the infrastructure it utilizes or burdens.

Profit is not all due to "benefit derived from surroundings", so if the latter is supposed to be a euphemism for the former it does not fit. Taxing based on the use of public services would undoubtedly lessen the tax burden on large companies but not small ones. Better to just keep cutting corporate tax IMO.

The value of the land on which the business sits should have no impact on the amount of taxes it owes, unless and until that land is sold, at which time the profit from the sale should be taxed.

It is very hard to value land independent of its use, but the economic case for LVT is actually strong. As with all taxes there are limits to its use. Georgists who want to raise all tax revenue this way would be disappointed at how little it yielded when they found out that everyone sold out to the government and became a tenant instead.

Inheritance taxes are fine, as far as I am concerned, because it performs two functions. For one thing, it taxes someone who is no longer present to suffer from the loss. Secondly, it slows the up-ward redistribution of wealth and power into the hands of those who were simply born into the right family. This is, after all, how kings come into being.

I agree--the rationale for it is that unearned bequests should be taxed higher than earned. This also applies to in-vivo tranfers of wealth (gifts) but enforcement is impractical.

A wealth tax, if assessed more than once, does pose the danger of consuming the tax payers entire substance, over time. Thus, I would say that , ethically, it should be assessed only once, on the death of the tax payer.

I doubt it would do that. Wealth normally generates income which offsets the impact of tax.

a consumption tax seems to me counter-productive and, again, falls most heavilly on those least able to pay it

Disagreed--taxes on spending are highly efficient. They can be made progressive if that is necessary.

When the middle class have money to spend, you can be assured that it will circullate within their communities, sppreading the prosperity around.
Corporations have been given far too many tax breaks here in the USA, and the money has not stayed in our ecconomy. It has created jobs off-shore, sometimes to the detriment of our working people. I personally would rather see the corporate rates increased, but with a tax credit for such investment as infrastructure and physical plant to create jobs here.

I disagree fully with the home bias/protectionism line of thought you hold.

Wealth is great as long as it is not constantly migrating to the top of the food chain and then out of the country or used to gain political power to enact laws that help the wealthy at the hurt of ordinary folk.

Income and wealth inequality is not wholly bad or to be elimininated. Nor is it the sole or overriding purpose of taxation. Alleviation of poverty is socially just, but taxation based on jealousy is ill founded.

 

[Tippit]

I am retired and partly disabled, and my house is worth more every year because of someone else's ecconomic activity in which I had no part. Now I must pay more in property taxes or move elsewhere, whether i wish to or not. There is no way that I am recieving a benefit from the increased cost of living in the home which I worked so hard to acquire. Wait till I croak and take a cut out of what I would have left to my son.

Your house is worth more in nominal terms because the Fed is perpetually debasing the currency in which it's priced, a regressive tax. If you decided to capture the "windfall" profits on your home, not only would you pay steep capital gains on what is merely a nominal gain (referred to as the tax on the inflation tax), you would be sorely disappointed to find that the house across town will cost just as much or more to move in. Even if you didn't sell and your millage rate remains the same, if your property is re-assessed at a higher nominal value, you're still subject to this hidden tax.

I know firsthand that property taxes are used to gentrify certain areas. American Beach, FL is one of the last predominately black-owned beachfront locales in the US, and politicians are using property tax policy to gentrify the area. It is located on Amelia Island, just south of Fernandina Beach where I live. I find this process despicable, and it is an example of how property taxes can be administered inappropriately.

 

[Beerina]

And it would be a sorry arguement if that were what he meant.

Paying for public schools is not about educating your own larvae. It is about maintaining the quality of life for all citizens and ensuring the continued freedom and prosperity of the country.

I note in the upper peninsula of Michigan, since jobs are scarce, half the people are retirees living on other income. They regularly defeat any school millage proposals. Some districts have gotten into serious trouble. Ten years ago the state re-did the way local property taxes and schools work, making a much bigger chunk come from the state itself, to get around these problems.

 

[Beerina]

Property taxes are one of the few taxes that are
1. Hard to avoid or evade. You can avoid taxes on many goods by buying overseas.
2. Do not adversely distort markets. For example a high income tax would be an incentive not to earn money.

Tell that to the Japanese, who still haven't recovered from the bright idea to apply property taxes to the real-estate in downtown Tokyo, which lead to their bubble bursting 20 years ago.

 

[fuelair]

Why do we pay property taxes?

I mean, I don't pay taxes on my car. Or my bike. Or my tv.

So why should folks pay taxes for the simple fact that they own land?

Me no get it.

Property tax+ own property, directly receive more services from gov't. Own car? pay gas taxes and sales tax on the car and license fee and Drivers Lic. The taxes come in all shapes and sizes

 

[TragicMonkey]

Wait, you don't have to pay property tax on your car?

You do in Virginia. They send you a bill for a percentage of what they estimate your car is worth now.

 

[Ocelot]

I am ok with most taxes, its just the property tax I don't like.

I mean, if I wish to buy 100 acres in Upstate New York, and just live completely isolated from the rest of society, with no electricity, gas, oil, etc etc...I should be able to do so without having to mail a damn check to the govt. every year.

Ever heard of the free rider problem?

Trouble is that you can't live completely isolated from the rest of society.

You want to buy 100 acres. What do you mean by that. You mean that a registry will recognise you as the owner of that property and enforce your rights to it if you need them to. Oh but you say I'm quite happy for them not to. If people squat on my land I'll take care of it myself. Sure you will even if they're bigger, stronger and better armed than you even if dare I suggest something almost inconceivable, even if they're smarter than you. You might well be happy to take your chances, but even there you benefit because the chances of such a thing happening are reduced by the very existence of the state. What about air pollution, noise pollution, water pollution. Even though you didn't ask to have someone make sure the environment in your 100 acres isn't exploited by others you will benefit from the fact that there's no chemical plant pumping cyanide into your groundwater. Something else you'd probably be happy to take care of by yourself I suppose. Then there's all the benefits you've already taken. Public education, food standards law and order, security. You want your 100 acres isolated from society then go buy an island. You want in in upstate New York for a reason then you pay for those reasons.

 

[geni]

The only fair taxes ever invented were the income, nuisance and import taxes.

Except in the UK property tax in many ways is a nuisance tax. With the size of the housing shortage we have OAPs staying in the old family home is a problem.

 

[geni]

You want in in upstate New York for a reason then you pay for those reasons.

No you don't. There are half a dozen tricks to get the land treated as farmland (trading one horse per year will generaly do it) resulting in a much lower rate of payment.

 

[Francesca R]

Except in the UK property tax in many ways is a nuisance tax. With the size of the housing shortage we have OAPs staying in the old family home is a problem.

It invites people to "consider their housing needs". I suppose. But far from rising with the rise in property prices, no government has dared re-assess values since the council tax was first introduced 20 years ago. The rise in council tax since then is due to the spending of councils, not house prices.

 

[brodski]

The rise in council tax since then is due to the spending of councils, not house prices.

Given the nature of the local government settlements for the past couple of decades it's not really sensible to look at council tax as local taxation. The level of revenue raised by council tax has very little effect on a council's ability to spend.

 

[Beerina]

Ever heard of the free rider problem?

Trouble is that you can't live completely isolated from the rest of society.

You want to buy 100 acres. What do you mean by that. You mean that a registry will recognise you as the owner of that property and enforce your rights to it if you need them to. Oh but you say I'm quite happy for them not to. If people squat on my land I'll take care of it myself. Sure you will even if they're bigger, stronger and better armed than you even if dare I suggest something almost inconceivable, even if they're smarter than you. You might well be happy to take your chances, but even there you benefit because the chances of such a thing happening are reduced by the very existence of the state. What about air pollution, noise pollution, water pollution. Even though you didn't ask to have someone make sure the environment in your 100 acres isn't exploited by others you will benefit from the fact that there's no chemical plant pumping cyanide into your groundwater. Something else you'd probably be happy to take care of by yourself I suppose. Then there's all the benefits you've already taken. Public education, food standards law and order, security. You want your 100 acres isolated from society then go buy an island. You want in in upstate New York for a reason then you pay for those reasons.

Fair enough, but you're still requiring people to buy into all this stuff (and that's independent of what kind of tax pays for it.)


It's a wonder Charles Ingalls didn't just pack up his family and go live in a big city, with all those wonderful, government-provided benefits.


What an idiot he was! How awful it was for humanity to have people like him, the ignorant, harmful losers holding back the progress of the advanced ones who know it's best to live in the big city.

 

[geni]

Fair enough, but you're still requiring people to buy into all this stuff (and that's independent of what kind of tax pays for it.)


It's a wonder Charles Ingalls didn't just pack up his family and go live in a big city, with all those wonderful, government-provided benefits.

Even by the standards of his day Ingalls was somewhat unusual.

What an idiot he was! How awful it was for humanity to have people like him, the ignorant, harmful losers holding back the progress of the advanced ones who know it's best to live in the big city.

Oh you slipped up there. Until you brought up progress you had a really nice anecdote with lots of emotional appear. Thing is that progress is for the most part driven by city enviroments. Even the 19th Model Farms came from those who spent significant amounts of time in city enviroments. The Green Revolution was again very much taking the science and progress of cities and taking to more rural areas.

 

[daenku32]

I think property taxes are good because it forces the rich to share the land. That way even the poor can buy a plot.

 

[Pup]

Thing is that progress is for the most part driven by city enviroments. Even the 19th Model Farms came from those who spent significant amounts of time in city enviroments. The Green Revolution was again very much taking the science and progress of cities and taking to more rural areas.

I'd also argue that in general, except for the first wave of pioneers who enjoyed a primitive isolated life, the second wave of permanent settlers on most of the U.S. frontier wanted the services that communities could provide--better roads, better bridges, better law enforcement, better markets, better communication. Otherwise there wouldn't have been the push to build roads, canals and railroads to connect the interior of the country.

For every market hunter who grumbled that the game was leaving and he needed to move further west, there was a farmer right behind him hoping the railroad would come nearby and raise the price of his crops on his newly-cleared land.

Nineteenth-century American expansion I can speak of with some confidence, but here's an idea that I'm just tossing out without any evidence, to see if it makes any sense:

I wonder if the convention of a property tax goes way back to the old English society where the land-owners were (in theory at least) the wealthy members of the community, and the land-renters were the poor peasants that the owners had some moral obligation to be charitable toward. So there was an underlying assumption that if you owned land, you were making a profit from it and were willing and able to invest something to improve the community as a whole, while the poor tenants shouldn't be expected to do more than just support themselves, laboring for the land owners.

Today that makes less sense, since houses aren't used for making money the way farmland was, so someone with a bigger house isn't necessarily making more profit because of it, unlike someone with a bigger farm.

 

[Francesca R]

The level of revenue raised by council tax has very little effect on a council's ability to spend.

But the propensity to spend still drives the increase in council tax (apart of course from it all being a conspiracy on the part of the Westminster gubmint to starve councils run by opposition parties while drenching their own ones in torrents of cash)