Francesca R
Girl
As does the UK in the form of fuel tax and vehicle excise tax (as well as VAT on the sale price). The first two are more appropriately seen as environmental taxes.
Are property taxes fair?
- Thread starter Thunder
- Start date
JJM 777
Illuminator
- Joined
- Jun 25, 2004
- Messages
- 4,060
Now that you mentioned _land_, a limited resource and an undeserved privilege, we shouldn´t only tax it. We should take it away at the change of each generation, no hereditary privileges.
brodski
Tea-Time toad
- Joined
- Mar 19, 2005
- Messages
- 15,516
Kind of, but there is also a question about who, historically, has been making those spending decisions. LAs have had very little control over their revenue in recent years, and not to much control over their expenditure.
michaelsuede
Graduate Poster
- Joined
- Mar 21, 2011
- Messages
- 1,565
Are property taxes fair?
No taxes are fair because ultimately they rely on threats or coercion to be collected.
If something has value to a person, they will pay for it willingly. No threats are necessary to get a person to spend money on something that is in their own self-interest.
The tax system makes the assumption that people don't know what is best for them, therefore violence must be used to take their property and then bureaucrats will spend it in a manner that they think is in that person's best self-interest.
Of course, this is ridiculous. Politicians only spend money on things that are in THEIR self-interest, not the interest of the individual consumer.
No taxes are fair because ultimately they rely on threats or coercion to be collected.
If something has value to a person, they will pay for it willingly. No threats are necessary to get a person to spend money on something that is in their own self-interest.
The tax system makes the assumption that people don't know what is best for them, therefore violence must be used to take their property and then bureaucrats will spend it in a manner that they think is in that person's best self-interest.
Of course, this is ridiculous. Politicians only spend money on things that are in THEIR self-interest, not the interest of the individual consumer.
dudalb
Penultimate Amazing
We have a resident of Libertopia with us.
Francesca R
Girl
Wrong. And first documented as being wrong about sixty years ago. Just read the intro.
That's the same statement again and it is wrong by the same logic.
No such assumption is necessary.
(Note: this does not mean that all tax is in the public interest or anything like that, but your starting premise--that it never can be unless voluntarily donated--is flawed so there is no need to proceed further with your line of thought)
Francesca R
Girl
Even libertarians who know what they actually believe in argue for a minimal state, which has to collect taxes.
brodski
Tea-Time toad
- Joined
- Mar 19, 2005
- Messages
- 15,516
Though we have had honest-to-goodness anarcho-capitalists here before. What was the guy's name, Alex something?
bruto
Penultimate Amazing
In some places I've lived, high property taxes, or more explicitly, high mill rates, have indeed been a disincentive to property improvement. Long ago I lived in Northern St. Lawrence County, NY, where the tax base was low and the mill rate high. I knew several people who were quite explicit about their unwillingness to improve their property in visible ways because the taxes would go up. When I resided my very shabby old house the taxes nearly doubled. I paid more in taxes up there than I did when I moved to Connecticut to a property worth three times as much.
I haven't read all the thread yet, but in response to Thunder's original post, you do pay property taxes on your car in Connecticut. And due to the uniform valuation of cars, you will pay substantially more for the same car in a town with a poor grand list than you will in a town with a rich grand list.
Property taxes are inherently regressive, since they are predicated on market value, which assumes all property is, or should be, for sale. Although there is some abatement in some places for elderly folks, the basic upshot of property taxation is that if you don't maintain a level of income suitable to the presumed economic status of your property, you cannot live there.
Property taxes may well be a better way to collect taxes than some others, but there will always be a segment of the population that is ill served by a tax that requires continued input after the item taxed has been bought. Income tax is paid only once, and sales tax is paid only once. Property tax is paid continually and requires a source of income that is entirely separate from the property itself, and often quite disconnected from the wealth or income that was required to buy it in the first place. Lose your income and you may well lose your house even if it's long been paid for.
+1 for the Little House on the Prairie reference
blutoski
Penultimate Amazing
- Joined
- Jan 10, 2006
- Messages
- 12,454
...Unless they think they can get it for free instead.
In game theory, they're called "the cheaters"
That's a theory that's pretty easily demonstrated false by game theory and any objective observation of current human condition.
Not at all. The first reason for coersion is because historically and empirically, many people leach off the services others pay for, if they can get away with it, until the services are nonviable and fail.
These are known by economists and game theorists as "the cheaters"
Secondly, there is an observed fact about behavior: individual short term economically rational behavior can be self destructive in the long term. There's even a name for it: "Tragedy of the commons."
Thirdly, citizens are not "customers". They are entitled to services like justice even if they have no money to pay for them. Citizens are being asked to pay for justice in proportion to their benefit, which is pretty reasonably assumed to be correlated with their wealth.
"Consumer"? I thought Americans were "citizens". Are you confusing business with justice?
blutoski
Penultimate Amazing
- Joined
- Jan 10, 2006
- Messages
- 12,454
Sadly, from somebody who had not read Laura Ingalls Wilder's books.
The reason the Ingalls had to leave their original homestead in Wisconsin was because they had exhausted the free natural resources on their land and were now starving.
They opted to take advantage of a government program of land redistribution. The US army had forced the Osage to allow Americans to immigrate and homestead on parcels of their land near Independence, Kansas. Since the land was free, they moved there.
So... my two observations about human behavior that I mentioned in the previous post are both demonstrated by these homesteaders:
1) tragedy of the commons - the Ingalls were rational in the short run, hunting and trapping free food until it was exhausted, which was irrational in the long run;
2) cheaters - the land had value to them - why did they not choose to pay the Osage rent? Answer: there was no legal consequence for using the land without paying, so they were not motivated to pay.
blutoski
Penultimate Amazing
- Joined
- Jan 10, 2006
- Messages
- 12,454
One thing that gets overlooked is that property tax is not totally based on land value, but on a formula. It's partly based on relative land value.
The city has a fixed budget. It divides that by the value of land and buildings with some other incentive factors built in. For example, I get 75% chopped off immediately on the one unit where I reside, but pay full rate for the ones I rent out - they're an investment that generates income.
The other point is relative land value. The relevance of this is that it means a rise in sellable value does not mean a rise in tax cost. Only a rise faster than the average in the area would change the tax cost. This usually means increased taxes are tied to development like improved infrastructure, or a zoning change, which is a benefit to the owner.
Almo
Masterblazer
Libman, I thought. I don't know how I feel about property tax. I'm about to start paying it directly as we just bought a condo. I think we paid it in the UK, as renters pay the propety tax directly there.
blutoski
Penultimate Amazing
- Joined
- Jan 10, 2006
- Messages
- 12,454
I support some tariffs.
In particular, as a retaliatory measure for when the target exporter is engaged in dumping or subsidies, or other unfair trade strategies.
I agree that tariffs might be unnecessary in a 'fair trade' environment, but in the real world, nations have strategies and 25-year plans to obliterate foreign industries forever.
To fail to retaliate would be a victory of idealism over pragmatism and handing future wealth to the instigator nation.
blutoski
Penultimate Amazing
- Joined
- Jan 10, 2006
- Messages
- 12,454
A condo is a good small-scale model for property tax. Condos always have a monthly maintenance fee, which is usually their monthly expenses divided by square footage.
For one thing, there's always that guy who says he wants to opt out because he is quite content with a leaky roof. He knows full well that everybody else is going to pay to get the roof fixed. His claim is that all this benefit of a fixed roof is a terrible oppression on him. This is the 'cheater' category.
Another thing to be aware of is that as the market value of the units rise, the monthly maintenance fee doesn't rise, because the building's costs haven't changed. A city works the same way. If all the houses in a city go up exactly 25%, taxes do not change. An obvious example of this is Detroit, where real estate prices have been in freefall, but the city still needs to collect revenues for operations, so there's no drop in taxes.
It's more complicated, because sometimes our strata has assigned special assessments to specific units if they're the only ones affected. For example, the North wall had rotted out, so only the 9 units that 'shared' the North wall were asked to contribute to the repairs. In a city context, my street was taxed specially for 5 years because we asked the city to pave the road (originally a dirt road).
Last edited:
bruto
Penultimate Amazing
It's true that as long as an entire town rises evenly, increased property values will not add tax, and in some cases, as a town grows its grand list taxes can go down. this is what happens often in what here in Vermont are called "Gold Towns." Second homes and ski condos add so much to the grand list, and their value is so high, that permanent residents benefit. It can work the other way, though, and often does. A rise in the relative value of a neighborhood can drive the old residents out, and when population of a small town grows beyond a certain point, there can be a sudden rise in infrastructure costs that hits everyone. A town that never needed a police force, for example, may suddenly need one. Traffic lights, school additions, administrators, special ed teachers, it can add up fast. The possible benefit in infrastructure is only a benefit if you can afford to stay and use it. It probably all averages out for the general population, but there will probably be at least a small portion of the population that's utterly screwed.
want to absolutely terrify a property tax official
suggest they look at the mortgage records to value commercial property
every county courthouse has records of the loan value of high rise office buildings
or shopping malls car dealerships ect
NONE ARE valued for TAX AT A RATE NEAR their loans
by far most major commercial property is under valued by a huge %
as the price/value is set by sales alone never loans value
strange when unlike homes the higher value property is seldom sold
but nearly all have huge mortgage amounts publicly recorded but never use to value
this class of TAX CHEATS
think of how much the avg home owner could and should save
IF THE BIG GUYS PAID THEIR FAIR SHARE
suggest they look at the mortgage records to value commercial property
every county courthouse has records of the loan value of high rise office buildings
or shopping malls car dealerships ect
NONE ARE valued for TAX AT A RATE NEAR their loans
by far most major commercial property is under valued by a huge %
as the price/value is set by sales alone never loans value
strange when unlike homes the higher value property is seldom sold
but nearly all have huge mortgage amounts publicly recorded but never use to value
this class of TAX CHEATS
think of how much the avg home owner could and should save
IF THE BIG GUYS PAID THEIR FAIR SHARE
blutoski
Penultimate Amazing
- Joined
- Jan 10, 2006
- Messages
- 12,454
Yes, there will always be exceptions, and while I can't speak for every municipality, in North Vancouver, the city is totally aware of the old lady who moved into row housing, and woke up one morning in a re-gentrified highrise neighbourhood. Specifically, Lower Lonsdale used to be fixedincomeville, but now it's yuppieville.
So firstly, people who actually live in their dwelling get a big chunk knocked off the top. Secondly, if they're a senior over 65 or disabled, they get more reduced.
I pay $900/yr property tax for a condo I rent out and don't occupy. The immediate neighbour (who is a friend - has a slightly nicer unit, but same square footage) pays $45/yr. Yes, if she lived in a really shabby place a few blocks over she'd pay $42/yr, but I wouldn't call that 'getting screwed' since it still covers her police, fire, roads, and garbage.
I learned that through Family Services, she received a provincial grant to pay for this as she can demonstrate hardship. They also paid for her share of annual duct cleaning.
ETA: sorry, I was rambling and didn't clarify my point, which was that there are ways to nudge property tax into a more progressive structure and avoid our most vulnerable members of society falling through the cracks
Last edited: