This point always makes me laugh because anyone who lives in affluent TX neighborhoods knows your property tax is _enormous_ and usually makes up for a majority of state income tax you save. They still need to pay for roads and schools, right?
Have you seen Austin prices recently, it's getting pretty hectic in "core" Austin.
> promotes a general attitude of anti-NIMBYism
This isn't entirely true. In the recent election there was a public transit bill in Austin which would raise prop taxes by 4% I think. Even though it passed there was a hefty amount of opposition to supporting it, and generally anything that deals with raising prop taxes.
Also in my local neighborhood (north central austin) there is plenty of nimbyism regarding planned multifamily construction.
Until you retire and no longer can pay the tax and are kicked out of your home.
Logically, it makes more sense to tax people who are actually making money (income and capital gains) since that means they actually have money. Taxing people on a fundamental need (shelter) could potentially increase homelessness, especially if you hit a rough time economically like with the pandemic.
"Income taxes disincentivize people from earning more"
I don't see how flat or even marginal income taxes disincentivize people from making more money.
For example, if I'm retired and making 5% annually on $5M dollars, that's more income than many working class people. Why should I get a break on property tax? If it's income tax, then it applies to everyone equally and you don't need special exceptions for people who lost their income since it would automatically remove the need to pay the tax (no income to withhold from).
Once again young people get the shaft in CA though.
It's not an unusual situation in urban CA for an elderly person to have bought a house currently worth many millions back in the day for <$100k. Downsizing for them means still spending many hundreds of thousands of dollars, far beyond the tax basis of their current home. I think the current system encourages (or at least doesn't disincentivize) older folks with expensive homes to sell and downsize, meaning the tax basis for that same home will increase a whole bunch for the new buyer (since tax basis is recast as the purchase price when sold), ultimately driving more tax revenue.
Which means you had to recieve that money at some point and it would have been taxed.
I'm sure rich people can avoid or find a way to deduct property taxes anyways. For example, setting up an anonymous Wyoming LLC or some form of trust.
It sounds like the system you are describing for the elderly is specific to CA.
- allow eligible homeowners to transfer their tax assessments anywhere within the state and allow tax assessments to be transferred to a more expensive home with an upward adjustment;
- increase the number of times that persons over 55 years old or with severe disabilities can transfer their tax assessments from one to three;
- require that inherited homes that are not used as principal residences, such as second homes or rentals, be reassessed at market value when transferred; and
- allocate additional revenue or net savings resulting from the ballot measure to wildfire agencies and counties.
It depends on how far someone is willing to downsize. Many 1500sqft single homes in that region are paying about $8k-9k per year in property tax. I guess you could cut that in half if you live in a row home of about 900 sqft. That can be a big lifestyle change depending on one's hobbies (gardening, keeping a classic car, beekeeping, etc may require more space). Not to mention $4k-5k could still be around or over 10% of a retired persons income, or even working families too (Philadelphia has the highest rate of extreme poverty of any city in the US measured as families of 4 making <$12k per year).
https://comptroller.texas.gov/taxes/property-tax/exemptions/...
When you hit higher tax brackets it gets more difficult to negotiate a raise with your employer, because to get X more money for yourself you need your employer to spend 1.4X more on your salary. Flat tax rates have no such effect.
For example, you are making $99k and paying 4% (pretty close to many state income taxes) on that with the next bracket at $100k with a 6% rate. You get a raise to $110k which means you are making an additional $10360 after tax and only paying an additional $200 in tax (4% vs 6% on that $10k). I don't see why you need a 40% increase.
I guess you could also make the argument that you must relocate to cheaper areas, leaving behind your friends and family.
The real question is any if that is "right". Should we force people out of a home that they own or make them move out of the region they lived in, in some case for 30-50 years?
the high property tax is only for the income earners who pay no income tax.
A progressive tax system will always be far more equitable.
You're confusing "you can grow outward with single-family-homes near indefinitely" with "we want more apartment buildings near our precious houses!" You still get a lot of the same problems, you've just changed the complexion of the traffic problems...
I guess if you Prop 13'd your way into a low assessment, then the math doesn't quite work that way, but for someone who bought a Bay Area house recently, then moved to Texas, the net difference is still a tax reduction.
Austin property taxes are 1.8%. SF property taxes are 0.65%.
For it to breakeven, just on property tax, Austin property taxes on a house 1/3 the cost of an SF house would have to be 3*0.65 or 1.95%.
So people in Austin effectively pay less or the same on property tax than people in San Francisco.
I might add, house prices in Austin/Dallas/Houston are often less than 1/3rd the price of houses in the Bay Area for comparable quality. In Austin, median housing price is $365K, and the average sq footage of a house in Austin is about 70% larger than one in SF.
Double how bad it is for the Bay Area then relative to Austin.
Property taxes in Austin (not to mention how cheap Houston, Dallas are) are not even as expensive as the Bay Area. That's not even considering income taxes or no capital gains.
That would make property taxes in Austin need to be 3 * 1.2 or 3.6, which is double what they actually are.
So people in SF pay basically double property tax of people in Austin for their houses, excluding the fact that houses in Austin are much larger.
https://www.austinchamber.com/economic-development/taxes-inc...
But using your link, at Travis county (2.2267), once again, it'd need to 3.6% to be equivalent levels of absolute tax paid as SF.
It's effectively 2.2267/3.6 (62%). It doesn't matter really how you slice this, because it's not subtle. People in Austin pay way less property tax than people in SF on equivalent housing, even before other taxes (only in SF) are taken into account.
The base CA property tax rate is 1%, so it can never be lower than that. It's nearly always higher since localities can add assorted fees to it (so of course they do).
You might have a long-time owner paying 0.65% due to prop13 slowing the year-to-year increase, but as a new purchaser your CA property tax will always be >1%.
Prop 13 means lot of people are paying much less than 1%
And we do, with far less taxes. $57.38 billion in revenue for TX at 29M population, $100 billion in revenue for CA at 39.5 million population.
It's $1979 per person in TX, and $2531 in CA. Or about 75%.
Property tax bill on a $2.7m house in SF is ~$32,400/yr, and the property tax bill on a $1.5m house in Austin would be around ~$33,000/yr.
Sorry for the long link..
https://www.zillow.com/homes/for_sale/?searchQueryState=%7B%...