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Comment by epistasis | Hacker News Reader

Great link. As a liberal California resident, there's a lot about the governance of Texas that I like a lot. From their permitting regime for renewables, to their high property taxes, there's a lot that California should adopt that would make our state function better.

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Would high property taxes really be a good thing for a state that has the highest income tax in the country?

Texas has no income tax which is why they have high property taxes.

Texas has always been ruled by the extractive industries, so property taxes essentially make taxation a non-issue for the people who own those industries, as their property is owned by corporations that have a variety of hocus hocus to offset tax liability. Property, sales and excise taxes are regressive and penalize poor folks. They are great for rich people.

In a place like New York, Massachusetts, or California, you have alot of intellectual property driving the economy, so you need to tax income. New York's discretionary budget is essentially derived from income taxes on a few thousand people. New York/Mass vs. California shows why each thing is important -- NY and Mass are leaders for K-12, California is ranked like 35-40 among states.

Local control of property taxes mean that the former can fund education effectively, which they do outside of the hood. California schools are stuck with trying to extract dollars from the state legislature, as the boomers effectively pay no property tax.

I don't think California or Massachusetts needs to tax income, certainly not at the level they currently do. Look at Washington, with its lack of income tax yet very strong intellectual economy, not only in software but also a growing biotech scene.

CA, NY, and MA all have terrible problems with housing and land use in general, largely caused by poor allocation of land due to extremely poor taxation.

Land in Manhattan, Cambridge, the Bay Area, and Los Angeles is some of the most productive land in the world, but the extraction happens because of the network effects of bundling people together.

By taxing the land rents, poor uses could be replaced by far better ones, increasing the land value and economic output even further.

Property tax isn't quite as good as a land value tax, but it's at least getting towards taxing the right thing.

Most people radically overestimate California income taxes because they fundamentally fail to understand how progressive taxation works. No one talks about Oklahoma having a high income tax, but everyone making under $50k per year would pay more income tax in Oklahoma than California. Quite amazing how that's not "high tax" and perfectly okay. Meanwhile, practically no one in these comments would be exposed to a California 12.3% income tax because it only applies to income above roughly $1.5M/year if married. My income taxes were lower in California than in Iowa at comparable times in my life, yet no one ever used Iowa as an example of high income taxes.

> Most people radically overestimate California income taxes because they fundamentally fail to understand how progressive taxation works.

Most people radically overestimate California income taxes because of propaganda by the narrow group of people paying top marginal rates directed at the broad group of people who pay closer to the median rate, because the former group wants the latter group to act against its own interests.

The biggest "high tax" component of California's system is that capital gains gets taxed as if it were regular income.

This was another California Republican idea, namely Reagan's, and I think he implemented it nationally when he was president too.

This means that in boom cycles with lots of IPOs and acquisitions, the California state coffers are bulging with money, but in a broad economic downturn there are a few news cycles of "California has a $XYZ billion state budget deficit" before the new budget is set since that deficit is how the new budget is set (no news articles on the balancing, though). There's a big appetite for anti-California news and I have little patience for the assholes who gobble up that misinformation...

With an appropriate property tax regime you could cut income taxes.

And as we all know, when a government can cut income tax, they do.

The nice thing about income taxes is that when your income increases, which increases the amount of tax you owe, your ability to afford that tax also goes up due to that income increase.

With property taxes you don't have that coupling between changes in income and changes in the tax. That can make a property tax way more painful.

If your income tax goes up a lot, you have a ton more wealth. Which means that a small downsizing to match the same tax level leaves you with a bunch of cash.

That's exactly what should happen in a productive economy: big cash payments to give up underutilized land to somebody who can make better use of it.

People talk about taxing granny out of her house, but they conveniently forget to mention that granny is keeping half a dozen people homeless by hoarding an underutilized property.

> People talk about taxing granny out of her house, but they conveniently forget to mention that granny is keeping half a dozen people homeless by hoarding an underutilized property

Where are you getting that from?

In most cases when granny sells her house and moves due to high taxes the buyer will be a single family that will live in the house. In the vast majority of cases that family will have less than half a dozen people, and in the vast majority of cases they will not have been homeless before.

> People talk about taxing granny out of her house, but they conveniently forget to mention that granny is keeping half a dozen people homeless by hoarding an underutilized property.

That’s a distasteful and predatory way to speak of someone who rightfully bought her property, possibly a widow, and just wants to live in peace versus having someone (business or gov) try to break the rules to take her property.

It is far more distasteful and predatory to hide behind widows with a fundamentally unfair system. Whoever wants to take away the opportunity of others, let them pay. It's not hard.

It's far more distasteful to ignore the needs of everyone to give a very minor convenience to somebody with a lot of wealth.

Winston Churchill on this sort of old and wrong political argument about widows:

https://savingcommunities.org/docs/churchill.winston/budgetr...

Except the lowest income classes don’t own property and pay no property taxes directly. Considering renters also pay less in Texas than Cali, it seems a pretty un-regressive regime.

This why I find our political tribalism so frustrating, even moreso now that I see (primarily young) people trying to use "centrist" as a dirty word.

Texas has actually done a lot better at producing supposedly "liberal outcomes" by acknowledging the reality of economic incentives. We've built a ton of renewables. We've also built a ton of housing that have shown the stark contrast to the idiotic housing policies of California. I'll also give a shout-out to the "Sunset Commission" of the TX legislature, which reviews government/regulatory bodies every 12 years to ensure they're still fulfilling their original mission.

At the same time, we have idiotic laws that force women to leave the state to get healthcare that will save their lives. Our educational financing system is a disaster.

Point being I don't consider myself a "centrist", I just want to choose policies that actually work, regardless of tribalism.

I have to admire Texas politicians for opposing "green energy", going so far as to blame their 2021 power crisis on The Green New Deal, while also simultaneously investing heavily in and reaping the benefits from "green energy". The unapologetic hypocrisy has to be respected.

The difference is that private industry is buying what's effective while politicians mouth off. This is one of the reasons we should let the "free market" control things where we can, since they are compelled to make sensible decisions for efficiency reasons, unlike the government.

They are compelled to make decisions for efficiency reasons as much as the government is. Companies make boneheaded decisions based on ideology all the time.

Additionally every time I hear someone claim that companies running everything will be more efficient, when I dive into their beliefs I find out that they expect organizations they call “governments” are required to do many tasks that would not be required of organizations they call “corporations” and that is where all the “efficiency” comes from.

If this was supposedly so much more of an “efficiently system then why has Texas experienced years of outage causing problems in their electrical grid?

We live in a world where half of elected officials want to stop the rollout of renewables for ideological reasons and regularly push nuclear power as an alternative, despite making zero economic sense.

I'm not saying the government can't be efficient, but taxes represent a cash flow that is close to completely unbound to the results of their spending, so it's much easier for them to be used poorly depending on who's in charge.

Cool, you can loose a shareholder vote too and have a company go off and do something you think is dumb and therefore “inefficient”.

Part of the point I’m trying to drive to is that many of the problems people have with governments are actually problems with organizations operating at scale

Both government and corporations have inefficiency? News flash: water is wet

Tell that to the OP

I'm very very happy that green energy has gotten so effective, but what if it hadn't? Then private industry would be off polluting as much as possible. Monetary efficiency is often not aligned with resource and pollution efficiency.

(And obviously that can be largely fixed with a carbon tax, but good luck getting that to happen.)

Free market is up there with communism on number of kills leaderboard.

I am beyond overjoyed that a city somewhere (Austin) did the stupid simple thing and simply added a bunch of housing when prices went up. You can clearly see the graphs, where after 2020, prices shoot up, then housing starts shoot up, then prices drop back down to 2020 levels.

I would say I am progressive politically but the ostensibly progressive mindset that led to denying that housing supply could help with the cost of housing has been crazy harmful. Even with the newfound acknowledgement that housing production is necessary, it's going to be harder and more expensive to catch up - peakier demand for trades labor and materials also drives up prices!!

This is a really simplistic view. It’s not just policy. In Texas, the vast majority of land is privately owned (only 2% is public land), so zoning is the only thing preventing buildout. Most of the geography is flat, there are huge expanses of empty fields all around Austin, and the weather is buildable nearly year round. There is also a tremendous amount of cheap labor due to the proximity to Mexico and the lack of minimum wages / border policy enforcement / etc. there are so many factors that make Texas cheap to build in that aren’t true universally in America.

Another key point, look up net migration in Austin. During the pandemic and remote work, everyone and their brother wanted to move to Austin, it was super trendy and a lot of tech was moving there. Look it up now. In Q4 2023 not only did grow to slow but it reversed to net outflow. Thats a massive difference in demand for housing and a massive difference in supply of housing. [1]

Yes, more homes got built, but there were many other factors at play than something simple like “let them build houses”.

1. https://www.redfin.com/news/housing-migration-trends-q3-2023...

> empty fields all around Austin

True but also doesn't explain the Austin housing market. Austin added more new apartments just east of downtown in 5 years than San Francisco built in the entire 1990s. The differences between pro-housing and deeply anti-housing local attitudes do not come down to geography.

Local attitudes matter less when there's less restrictive zoning and regulations, for better and worse.

Thank you for the nuance! I suspected that it was much easier to actually get the housing built but wasn't clear on the migration flows.

Either way it seems like housing prices started to decline spring 2022, about 1 year after the massive spike in building permits started in earnest.

There are a lot of impediments to doing the same thing in say, the Northeast, where I am. Labor is insanely expensive. This land has been occupied by city for hundreds of years, and greenfield does not exist nearby, nor is there the appetite to Ctrl C Ctrl V build massive subdivisions, especially out of reach of transit here.

Austin proves a relationship between supply and housing prices, but it will always be incumbent upon cities and states to pave the way for massive construction of housing in times of need. I think that long term, that means working to develop the labor pool and participation in the trades, streamlining permitting and inspection (I just finished a gut reno and this was a fucking nightmare), and yes, changing zoning so the mass housing projects actually can get built.

I think we need some new terminology or concepts. Personally I'd like a happiness or customer satisfaction focussed policy, not in a deep philosophical way but like asking on a scale of 1 to 5 how do you rate Texas's energy policy, how do you rate California's and similar. Then try to do the best one. It has the advantage that it's sensible to optimise the numbers and try to get 4.5+ on everything whereas with right-left politics there's nothing very sensible to optimize.

Actually maybe I should build something - like a ratings site.

Young people are correct. Centrism doesn’t lead to policies that work at this point because the right wing is unwilling to come to the center. (Yes, it’s the right wing, not both sides. The left has compromised itself into having no political impact whatsoever.)

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