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Comment by cactus2093 | Hacker News Reader

cactus2093

> I don’t buy for a second though, that if your home value doubles that your lifestyle doubles.

That's just true by definition of how a price works though, it's not really up to each person to agree or disagree with.

I get that you're not realizing the gains when your house goes up in value. But a property tax is not a capital gains tax, it's a wealth tax on a specific type of wealth (that happens to be very important to society and easy to track). The rules that everyone else is playing by, are that you're taxed based on the value of the property. Whether you realize the gains or not, to give you a break on it at the expense of people who happen to be newer, is not somehow inherently more fair. It's a transfer of wealth that is very regressive on average and goes directly from those with less money to those with more. And it has been a huge driver of the housing and budget problems created in California over the last 40 years.

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But it’s not true by definition. If my property value doubles tomorrow, whether I want it to or not, my salary doesn’t double. So taxing me means I make less money now. I think we can argue about it, but you can’t say that my “lifestyle doubles” it doesn’t.

Your borrowing power doubles.

I think we can argue about whether or not it's fair to you that this happened when you didn't necessarily want the value to double. But you really do have double the wealth, there's no two ways about it.

Another analogy, is imagine you paint for a hobby. If the price of paint doubles it's not going to double the value of your paintings, you don't realize any of thos gains. You could argue that it's unfair, you didn't ask for the price to increase, you should be able to go to the store with the same amount of money as you used to and buy the paints. But that would be silly, it's not how the world works.

In general people understand that it's not owed to them that everything will continue to work the same way it used to. But for some reason when it comes to home ownership, people think they are buying the right to keep everything about their home and neighborhood exactly the same, even the things that are not just affecting them individually but have a big impact on the rest of the community (like who else can live nearby, how much property tax they should pay, etc.)

The problem is that it’s a mismatch between wealth and income. Property taxes are taken from income, and if your income doesn’t increase in line with property taxes that may rise completely out of your control, you essentially may have to sell your house to pay property taxes. That doesn’t seem like a good solution to me.

I was thinking on the way home that maybe you lock property taxes in but then you have to lock your home price as well, but that probably wouldn’t work.

With respect to your last sentence, I think one of the issues is that we actually mix public policy into home prices. You can’t want a free market and also not want a free market. It seems like many home owners have chosen to not have a free market when it comes to home prices. It’s also not helpful because, like medicine, your home is a big deal. Uprooting you’re family is a big deal. Think about how a family feels if they buy a house, all of a sudden their neighborhood is “cool” and then they have to uproot their family because rich people push them out?

Not a lot of good solutions to a big problem here.

> I was thinking on the way home that maybe you lock property taxes in but then you have to lock your home price as well, but that probably wouldn’t work.

I think this might be an interesting improvement on Proposition 13: you can choose to lock in your low assessed value, but then you have to sell at that assessed value or pay taxes on the difference. This would allow homeowners to opt out of the free market for property tax purposes, but without having their cake and eating it too. I believe cities or the state actually have the authority to impose price controls under the same constitutional authority that allows them to impose rent controls; see https://blog.yonathan.org/posts/2018-09-proposition-10-rent-... for details.

There are two solutions to the property tax income mismatch issue. Which often effects old or disabled people. One I think some places do is allow people to freeze property taxes when they retire. The other is just to allow people to take a property tax lean against their property. When it's sold the state gets it's cut.

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