Being priced out of one's home is a red herring that the low tax zealots want you to believe to keep prop 13 in place.
Somehow in the 49 other states that don't have Prop 13, people aren't priced out of their homes from taxes.
There are other options. There are home equity lines, reverse mortgages, or even freezing tax payments and adding them as liens on the property at time of transfer.
But even if you're worried about that, you should still support repealing prop 13 on anything that isn't an owner occupied single family home.
There is no reason a rental property should have tax protection, or a commercial property.
>Somehow in the 49 other states that don't have Prop 13, people aren't priced out of their homes from taxes.
Allow me to introduce you to the great state of New Jersey. People here are absolutely priced out because of the property taxes, especially older retired couples and low earners who may have a house but hit hard financial times. A $400k house will probably have property taxes over $10k.
It’s a tax to try and equalize resources for all schools, and is very progressive in sense. Other states let poor areas have poor funding for schools, whereas NJ requires richer areas to send funding to poorer areas to try to give the poor children a chance. I actually think this is an admirable goal of NJ.
NJ also has one of the worst unfunded defined benefit pension problems, which is obviously not so admirable, and will continue to contribute to rising taxes of all kinds and decrease in government services in NJ for the next 30 years.
As a former resident of New Jersey, I'm aware of Abbott districts, and trying to place the blame them for NJ's high property taxes is absurd. It's not a separate tax, it's simply redistributing school funds from existing tax income. As for the amounts of funding the districts get, here's what it says in the wiki article:
Abbott district students received 22% more per pupil (at $20,859) vs. non-Abbott districts (at $17,051) in 2011.
That is a HUGE amount of money being spent regardless of district classification. As for the pension problem, please do not underestimate the ability of the NJ government to kick that can down the road as hard as they can. I firmly believe that they will do anything they can to not solve it until it's too late.
I really think this line of argument is going nowhere; you seem to have fundamental opinions on taxation that others here don't share, and I don't think further discussion is going to be all that productive.
That’s because others seem to have opinions about taxation and no understanding of how taxes work while I am trying to point out that property taxes are Ad Valorem.
High density isn’t the answer either. I don’t know one high density city in the entire world where housing became affordable and available for all as density increased.
Medium density and spreading out is the right solution. The example that comes to mind is the snail shell structure/concentric circle design of Paris, France.
That never comes up..the same tech sector working population want to pass their fortunes to their children through trusts and tax planning. I have seen them bristle when I suggested that their kids should pay taxes on their inheritance. It would be hilarious if it weren’t so hypocritical
Property taxes are paid on the sale price. It is not a punitive tax to fund new entrants.
An example:
Consider a 75 year old senior couple on fixed retirement income living in their fully paid 40 year old home. They paid the 300k mortgage and the house is worth 1 million.They raised their kids who attended public schools for 12 years each.
Property taxes are used for public school education. 45% of California budget is for schools. Property taxes go into a common pot and distributed to different school districts. It averages between 10-15k per student.
Schools have taken over nannying and provide more than basic education. They take on services that are generally the area of social services and social workers.
For example, if there are more non native English speaking families with children in school, the district gets extra funding. But more often than not, the children who know English as second language don’t come from high income areas..that is..their homes don’t contribute a lot of property taxes to the pot. Renters get the best deal because they don’t have to pay property taxes in the best school districts and often these are older properties that enjoy low taxes.
The problem here is that homes are roofs over our heads. It’s not speculative investments. They are not funding sources for the waves of new migrants and their children.
To ask 75 year old retirees to pay more taxes on property they haven’t profited from is heartless. That you need senior citizens to educate this working generation’s children’s education is shameful. It just means that the current generation doesn’t know how to manage their finances. It’s like someone living off their ageing parents pensions even when they are earning fat pay checks because they think their parents don’t need the money.
In my observation..those who ask for prop 13 to be repealed are usually : 1. First time house owners or renters 2. Transplants to California from other states that are usually economically depressed..almost always suffering from CA sticker shock 3. In their first high paying jobs 4. Don’t have parents living in California 5. Don’t have parents who were home owners in California 6. Really bad at financial management.
It boggles my mind when I see 25-30 year old Silicon Valley tech workers crying for prop 13 repeal and want you make seniors on fixed pensions homeless. They are people who are looking into other people’s homes and coveting what they think they are entitled to...
Most of the property taxes are going to fund public schools. If you want affordable housing, turn your ire towards parents who have kids and are not willing to pay for their own kids education...Instead of demanding from seniors who have paid their dues and have built the public schools and roads and infrastructure of California with their taxes when most of us weren’t even born.
I am deeply ashamed to be part of Silicon Valley that is disrespectful to the senior citizenry. On one hand, they want homeless people from all the states and undocumented immigrants to get free services and be taken care of..just when you think that such charity is laudable...on the other hand they are demanding to repeal prop 13 which will create more homeless seniors and retirees will end up without a nest egg for their safety net making them more vulnerable and even dependent on the state for services. How is this in any way logical or rational..even setting aside the fact that it’s definitely not ethical or moral.
Senior citizens in the other 49 states are doing just fine.
There are problems with increasing property taxes on elderly folks on fixed incomes, the solution isn't to say "you never own any tax on the appreciated value" the solution is to say "you can pay the tax on the appreciated value when you sell your home" which is an insane liberal tax and spend policy practiced in the hippie haven of the... state of Texas.
Additionally, the lions gain of the benefits of prop 13 don't accumulate to the working class elderly living in appreciated homes, it goes to giant corporations like Walt Disney (yes, Disney Land is protected by prop 13), golf courses, extremely wealthy property investors, and the heirs of people who have owned nice homes and then died who then bequeath both their house AND their insane tax rate on to their children.
maybe because young people in other 49 streets are not trying to make their senior citizenry homeless by increasing their taxes to educate their children for free.
Inheritance should be taxed at assessed value as should rental properties as well as commercial properties. Primary homes should not have prop 13 protections repealed. It’s not an investment to many..it’s their home.
In California, public money is spent on things like gender reassignment surgeries for govt/public sector employees and prison inmates..we have student loan forgiveness schemes if you work for 3-5 years for the county...retirement at 50 for most law enforcement and Fire Dept employees. Billions of dollars in pension funds and unfunded pension liabilities. Mayor Newsom just increased funds homelessness by another one billion. Yes, one billion in services like counseling. Not actual homes for the homeless. We offer services and education for all undocumented immigrants. First two years of community college free.
That’s why so many flock to California. Because life in the golden state is golden. And then they try to change prop 13 to punitively tax the senior citizenry and retirees on fixed income. Because. As someone spat out earlier ..”low taxation zealots” are the bad guys.
And then they try to change prop 13 to punitively tax the senior citizenry and retirees on fixed income.
I'm not going to bother digging into most of the rest of your claims but this is particularly disingenuous. Most of the recent attempts at changing Prop 13 have focused on a split roll that would keep the tax limits on primary residences. Putting grannie out on the street is exactly what the anti-tax zealots (Jarvis and co) used to sell the state on Prop 13 and 8 in the first place. What's being proposed now would raise taxes on things like vacation homes and commercial property.
That’s not what repealing prop 13 means..do you know the wording of prop 13?
Yes. In addition to following the flurry of news articles every time some politician dares to bring up Prop 13, I grew up in the Bay Area, and in fact I studied Prop 13 along with its consequences and potential changes while at university. If you'd like to be pedantic, your words were "And then they try to change prop 13".
Nobody (at least nobody with any sort of visibility) has proposed repealing Prop 13 wholesale.
They used repeal and partial repeal interchangeably.
Prop 13 also pushes undue costs onto new property development. Lower development costs equals fewer luxury condos. Were California to both build more and repeal Prop 13 fully it's unlikely that retired tech bros would be priced out of their houses.
Even so one of the primary roles of a county assessor is to determine where tax breaks are suitable. Allowing the (typically elected) assessor more discretion via a Prop 13 repeal almost certainly guarantees you won't be putting grannies (or retired tech bros) out on the street.
No, property taxes are paid on the assessed value, and assessments don't just happen at sale time. Only CA has this weird freeze-taxes-at-time-of-sale thing.
> It is not a punitive tax to fund new entrants.
No one is claiming it is. Hell, it isn't great even for homeowners who are "protected" by Prop 13, because if they want to move (say a widow/widower whose kids have moved out, living alone in a 3000 sq ft house who wants to downsize), they often can't, because their new property -- even if it's smaller! -- will destroy them with higher property taxes.
All this protects are people who never want to move, and, worse, it protects wealthy families who can pass their property down to their descendants without a market-rate tax.
> because their new property -- even if it's smaller! -- will destroy them with higher property taxes.
Nope. Prop 13 allows transferring assessed value of the old house to the new house if it's in the same county. Even inter-county if the new county allows it. The assessed value is also preserved when the property is inherited by children and grandchildren. The number of carve-outs it has to favor incumbent landowners is pure insanity.[1]
EDIT: These were allowed to die in December, 2018.
> Only CA has this weird freeze-taxes-at-time-of-sale thing.
Not even California has that, strictly speaking. California just sharply limits the rate of value assessment increase without qualifying events (mostly transfer outside of close family and new construction).
What’s wrong with never wanting to move? Out of homes people paid off after 30 years of mortgage? Why should we promote the notion that tax paying citizens should become transients due to tax burden?
So tax the descendents. Property rights are one of the reasons why this country was founded..primary homes need to be protected from predatory taxes and redistribution of wealth.
If those who had lived in their house for 30 years sold their property, they will have made more in capital gains from that sale alone than the average American has made in their entire life. I'm not exactly awash in sympathy here.
So you are saying people who invested earlier should be penalized because they were..I don’t know..alive before you and had a life and build a home that happened to appreciate in value even though it’s a perceived value with no real liquid gains.
Maybe they don’t want to profit out of capital gains. Maybe some people love their home of 30 years and would like to spend the reminder of their lives debt free after planning their retirement.
Seniors and retirees are such low impact on society. They have savings. They pay for services they don’t use. Their pensions and ssi is based on pre inflation valuations. They don’t use schools. Probably drive less and consume less and have a smaller carbon footprint. Most importantly they have already paid for themselves and probably paid their dues to society and several batches of public school kids.
To be envious of them and trying predatory taxation techniques on them is a breach and violation of social contract.
On the flip side, there is a finite supply of housing. A retired senior citizen living in a house prevents a young professional from living in that house. Given that the former is going to provide far less benefit to society than the latter, there is an opportunity cost that needs to be accounted for somehow. A property tax is not a bad way to account for the opportunity cost.
> Seniors and retirees are such low impact on society.
IIRC, medical care accounts for more government spending than all other discretionary spending combined. And most of medical care is going to be caring for seniors.
I never said there's anything wrong with never wanting to move. I just said that Prop 13 mainly protects incumbents who never want to move, and creates a really bad situation for everyone else.
Normally property taxes are paid based on assessed value. Assessed value is a function of market value that is determined recent neighborhood/comparable sales. The problem with Prop 13 is that it doesn't allow for the taxes to capture increased market value.
Why should taxes capture market value? That’s surrender to the state to keep taxing us.
To ask for higher taxation is asking for the state to take care of individual expenses through redistribution of wealth. Other states don’t offer as many services as California which is practically a nanny state.
The young people are expecting the state to do the grabbing so they can be taken care by the state. This is mostly due to public schools brainwashing kids with extreme progressive liberalism.
All these seniors that paid their dues paid how much in UC fees/"tuition"? And now they want to tell this generation to pay when they didn't? Isn't that called pulling up the ladder behind them?
No. The seniors paid for subsequent generations of public schools. Even when their children were all grown up and no longer in the school system.
It’s time for those kids who were educated with public funds and tax money to pay back. Not ask for more money from retired seniors.
So fix the university system. Don’t ask retired people to shoulder the burden of grown ass employed and able bodied younger generation and their children.
Most people have rental properties as investment properties.
Example: a 1 million dollar home rents for about 3500-4000/month in my Bay Area city. 10% goes to management company. And insurance is another expense, it’s not a lot.
Assessed value of a million dollar at current rates would be around $12k without parcel taxes or special special taxes added which can be another 3-6k extra.
It leaves about 2000-2500 as income. Assuming the home is completely paid off. If there is a mortgage or if it’s refinanced, there won’t be much of an income.
Rental income is considered income and subject to income tax.
Rents will RISE making housing even more affordable if people 13 is repealed. Any form of taxation is only designed so the house..aka the govt...wins. The house always wins.
Lobbies with housing interests are simply making home owners the villains...while the problem is lack of public transport, infrastructure and proper city planning and commercial zoning.
It’s easy to make seniors(who have no PR companies or lobbies) the villains or hard working people who have one or two rental properties as income nest eggs because they don’t have pension funds or stock options.
The Silicon Valley tech workers act like they are sharing and passing around a single brain cell amidst themselves when it comes to housing issues in the Bay Area. It’s mind boggling how easy it is to manipulate people into a mob when a nameless faceless villain who can’t be identified is painted to be the victimizer.
Somehow in the 49 other states that don't have Prop 13, people aren't priced out of their homes from taxes.
There are other options. There are home equity lines, reverse mortgages, or even freezing tax payments and adding them as liens on the property at time of transfer.
But even if you're worried about that, you should still support repealing prop 13 on anything that isn't an owner occupied single family home.
There is no reason a rental property should have tax protection, or a commercial property.