Behold the rise of neofeudalism: you can already see it in California, thanks to Prop 13.
Land value tax would fix this.
Land value tax would fix this.
I forget the 1960s case, but the gist of it was it instituted equalization in school budgets out from property taxes in the name of equity.
In other words, high property taxes in 1 town were forced to be transfered to the neighboring town with a lower budget, so much so that the transfer had to be make payments by pupil within a $100 band.
That was instituted blind to school performance of course.
This actually took hold in many states not just California, however CA was the o ly one that forced transfer payments within a $100 band. There are different flavors of this all accross the country
Of course, homeowners are not idiots. They dont want their tax dollars wasted. So soon after this case forced these transfer payments, there was a swell of home owners pushing for prop 13.
Makes sense. Local taxes to local benefit. If my taxes are going elsewhere, why should i pay more?
And so here we are. Almost 50 years later. Prop 13 is here to stay and is the only restraint that communities have against out of control state spending.
Since 1977 (before Prop 13) we've had the California Tax Postponement Program. Low income seniors, the disabled and the blind can defer taxes indefinitely. They have zero pressure from the state to move.
Meanwhile, anyone who didn’t buy a house or property for a business 20+ years ago is priced out of the market, so we have tons of low-quality stores and businesses that are insulated from competition. It’s interesting how many free market advocates will throw their values out the window when it benefits them to do so.
This is the paper https://www.journals.uchicago.edu/doi/abs/10.1086/NTJ4178881...
Nope, prop 13 (and the resulting income taxes) is somewhere between feudalism and class warfare, transferring money from the young who work to old people who pay nothing and spend their days at city hall making sure nothing ever gets better.
Im a renter, not a homeowner.
But I didn't choose to move to SF as a settler when it was a polluted mess of a city with days you couldnt go out, and high crime.
I wanted to move to opportunity.. When incomes are high and the city was better (it is not anymore)
Id like for prices to go down but I dont blame those that benefitted from just being there. Instead I look at the enablers, there is plenty of blame to go around, and the homeowner is last in that list. Prices are not High due to just prop13.
Miami, NY, Boise, Nashville and a bunch of other cities have housing prices that are going for the moon relative to what its been. They have no prop 13
40% of land on 280, between SF and Palo Alto is undeveloped farmland.
Cows dont pay property taxes
Investors who buy up 40% of the market, blacklist tenants, and price fix to set a price floor or remove supply by taking rentals off the market. Those are the main issues.
The state governments need to re-implement taxes such that deductions and write-offs do not apply beyond a certain number of properties that are not owner occupied.
As for prices, Prices are high because the banking sector has not been held to account for their unlawful actions, and politician's can't balance their budget.
They have used that to enrich themselves through various frauds, and kickback schemes. The land on 280 has little to no natural water, that's largely why its undeveloped, and job centers are scarce.
Property taxes don't work because you inevitably price locals out of homes and setting a maximum on the tax simply ensures local government increases to that max every year. Long term residents are left in the lurch.
I have parents who have a home up there and their property tax has increased 2% of the value every year for at least the last 10 years. They are paying almost a full salary ($40,000) to keep the home. That's just in property taxes each year and that is just for a single modest home with both having to continue working just to get by.
CA should amend the law to only apply to owners with a SSN and then thibgs make more sense
They don’t want you living near them.
Renters are not taking dumps in the street.
Homeless people are
Prop 13 is around 45 years old, which is much longer than the median homeowner tenure in California. That suggests that new people are moving into neighborhoods.
50%+ of california decided for this. Have you pondered why? First, are we really talking a massive tax benefit? Prop 13 is about tax increases to be limited ? Is that insane? Or is it maybe housing prices that are insane? Something does not add up.
I dont control the price of my home. Why should I pay ever incessant amounts over something I dont control and is effectively, paper gains?
But, I'll tell you what does control prices. Whose fault it is that there is no property being built in all the farmland along 280 between SF and Palo alto or Menlo Park.. Sure it looks nice, but its 40% of available land. Just farms.
Worse...some of farming is almonds... which take so much (subsidized) water. Again, why?
Why are there no municipalities created in those areas? Why is there no competition in the bay area's overpriced land ? Look into who controls the creation of new municipalities. Thats where a key problem for CA.
https://en.wikipedia.org/wiki/1964_California_Proposition_14...
The supreme court had to overturn the law.
Direct democracy is an objectively horrible way to govern. The US realized this hundreds of years ago and The Federalist Papers explicitly called out the "problem of faction" which is why we have a representative democracy instead of US citizens voting on federal law directly.
Children, immigrants, future transplants and prisoners can't vote. Should we be okay to grind them into dirt if it'll enrich voting demographics?
Meanwhile, we had at least 1 close brush with failure (civil war). And counting.
You need to take care of factions and you need big, heated arguments at the local level. So they dont end up scaled up at the federal level.
Otherwise those scaled up "solutions" ends up massive problems, such as the sudden reversal of abortion, foreign interventions, and housing/ credit meltdowns due to federal subsidies of mortgage insurance.
Prop 13 rewards long time landowning families. Who's that? White people. Even if the law wasn't explicitly racist originally it's impact has been. And only impact matters in the law.
Here's a link to a good paper on it
https://twitter.com/jarosenthal/status/1328136286159261698
If the current court weren't a joke I think this would be worth pursuing.
Focusing on the beneficiaries misses the whole issue. No one voting for the law at the time was looking To benefit "whit people". The court case Serrano v priest, which eventually led to prop13 getting momentum... That Serrano case simply enforced a law that , as usual, with good intentions, created unintended winners and losers. Its just this time the incentives ended up going the wrong way towards prop13.
People that passed the law, 2/3 of Californians, simply wanted to control how their money was spent. They wanted to do away with the Serrano vs priest decision.
Serrano vs Priest decision broke the link between housing taxes and local government. That court case was directly related to a law passed by the same proponents of aboliahing prop13 now.
In other words, it is the same people that created the perverse incentives of prop13 who now want to get rid of it
Why should they be trusted?
Prop 13 is arguably illegal under federal law. Of course with the current court I wouldn't want to press it. After all Clarence Thomas loves Prop 13 so much that he refused to sign the majority opinion in Nordlinger v Hahn because it didn't go far enough in empowering landowners.
> No one voting for the law at the time was looking To benefit "whit people".
Again, the Fair Housing Act cares about "disparate impact". Intention is irrelevant.
(Though given that the 70s was the era of school bussing battles it's a bit of a stretch to say that people weren't thinking about race wrt Serrano and school funding)
More generally, land value tax returns land to its rightful owner, the people in the community. No one created land so it doesn’t make sense to allow people to profit off it.
if that was the case, why does somebody currently own it, and who did this current owner buy it from (ala, go up the purchase chain back to the first buyer).
Eventually going up the chain brings us to the government, which again, had no right to give that land away when it belongs to the people. Whether they did it because of corruption or ineptitude is irrelevant.
So, let's take the scenario you gave: it depends very much where the mansion and the trailer are. Generally, people build mansions on high-value land and trailers are on low-value land, so the mansion will be taxed more than the trailer (a half acre in LA has a much higher value than a half-acre in rural Nevada where I live). If they are on the exact same lot, though, then yes they would pay the same tax. The idea is that taxing this way incentivizes the best use of land. Imagine that you have identical plots in New York, one is a big apartment complex, and the other a parking lot. With a property tax, you take a huge tax penalty for building, and so the housing complex pays a lot of taxes and the parking lot almost nothing. With a land value tax, however, the parking lot and the housing complex pay the same amount in tax, so it incentivizes the owner of the lot to build a more profitable housing complex there as well, and they take no tax penalty.
Prop 13 in CA is a law that freezes property tax assessments at sale, so you have people who are paying taxes on a home currently worth $2 million as if it were only worth the $150k they bought it for in 1980. This means it is always better just to rent the house out than sell it, since you have a huge tax benefit, making housing almost impossible to buy. Worse, you can pass the frozen assessment on in your will. So it is almost literally creating a quasi-landed gentry class.
This is absolutely not true. What prop 13 does is that it limits the yearly base property tax increase to 2%. It's not frozen, it still goes up every year, but only 2%. Note that this means it still goes up 2% even in years when the market is down. It's basically a damping fuction to absorb the wild fluctuations in market value.
The banks decide what your house is worth and the gov then tax you based on that. Seems like a way to force people into a never ending grind and kicking out seniors. No thanks.
That doesn't seem fair since your 10 acres is using way more of nearly every government service property taxes fund and requires more of nearly every government infrastructure that property taxes pay for.
The edge would still be worth more to build on because of the lower base-dominant tax.
But it does make the edge less accessible to lower incomes due to the base tax.
It should probably be a max value or max sqft on a given entity than try to indirectly force that with tax values. There's a reason we have anti-trust laws.
I mean, you sell your house with a lot of lot for a lot to some Facebook manager and move to Florida, but the whole scheme seems sinister to me.
Somehow "not getting my neighborhood ruined" is labeled NIMBY:ism nowadays?