Florida weighs ditching property taxes and sticking Canadians with the bill
cbc.ca
cbc.ca
I’m sure the members of say the Palm Island Home Owners Association don’t want their tax dollars going outside of Palm Island.
I take it you haven’t been to Florida much during election season, Stop Socialism is a common billboard.
In Iowa, the strategy has just been to gut all state and local services as much as possible, and then run what's left at a deficit while blaming the other side.
And they'll get even further down the line of "red states scream bloody murder about socialism while being supported by the socialism of blue states".
Where else is there a real upside?
If it gets real bad the people near the border will shop in neighboring states like anywhere else.
But that rules out most of the well-known coastal destinations where there are no neighboring states.
Realistically a local government should be able to levy a sales tax of some kind on the real estate itself, but perpetual obligations on personal property are not right because it's just too confiscatory in effect, if not intention.
For someone who is retired or incapable of working, property taxes can far exceed the cost of food and utilities, and income tax deductions do them no good.
Of course, there's no guarantee that anyone will own their own property, but making it an option for retirement planning makes a self-sustaining retirement much more likely, especially so for those who have to retire unexpectedly, due to illness or injury.
How much incentive does it take?
All this talk of taxing me just for living?! It's ridiculous. We should tax those whippersnappers taking all the jobs. They have the energy to pay taxes. Those days are behind me.
The GP may be referring to something like the difference between the taxes that are collected federally and paying of various services ('balance of payments'):
> In FY 2024, the federal government collected around $5.07 trillion from states and their residents through taxes on individuals and businesses and redistributed about $4.87 trillion back to states and residents through programs like Social Security, Medicaid, Medicare, food stamps, and education grants.
* https://usafacts.org/articles/which-states-contribute-the-mo...
Currently Florida 'paid in' more than it 'took out'.
If People in Florida residents have higher income that doesn't doesn't mean that if it doesn't pay federal taxes, its budget wont collapse. They monies collected by federal income tax does not belong to state of Florida.
This article seems to focus on Canadians as a politically convenient example of those residents who might pay more but the design of the mechanism as described applies to non-homestead properties in general, no just Canadian-owned ones.
Election cycles are the worse. I see the same back and forth fights dealing with budget cuts and cutting services. Sigh! Mainstream Press, no matter the country behave the same during election cycles :(
"We prefer to tax our residents".
No, blue states generally prefer:
- better educational outcomes (8 of the top 10 states are blue)
- healthcare access (10 of 10)
- lower crime (7 of 10)
- better rehab outcomes and resulting lower incarceration (10 of 10)
- wellbeing/QOL/happiness (7 of 10)
- average income (9 of 10)
Look, I'm sure tax is theft or something, or people need to get back to debating what the right type of barbed wire is to put on a fence to keep out the roving migrant caravans that show up in the news three months before every election and who all turn around in the days following. But yeah, interesting that that's what you take out of it.
In my view, preference rarely equals outcome.
>> >>This is such a weird phrasing. "We prefer to tax our residents".
No, blue states generally prefer:
- better educational outcomes (8 of the top 10 states are blue)
---> After working in K-12 and Post Secondary Ed, I can tell you that I've not seen better education outcomes. In my view that does not exist. Degrees offered rarely equate to jobs, unless you know somebody that can give you a leg up. Jobs have been steadily declining for decades. In post-secondary, giving out degrees, to fulfill a quota is the norm, from what I have seen. Basically, getting a college degrees allows you to get a job in an education setting, which again puts you back into the same system that gave you the unmarketable degree in the first place. Its a never ending, self-defeating cycle of financial obsolescence. This will probably become more serious as AI begins to take hold of traditional human roles.
- healthcare access (10 of 10)
---> I see no instance where healthcare access has actually cured a single person. All I have noticed is the management of conditions and the requirement that you must have insurance to comply with a law that benefited the legacy of a party, president and the pockets of certain medical companies and officers. Most people that have lived for more than 50 years will have some idea of what I mean. The system is designed to ignore cures in favor of medical treatments i.e., manage the condition, fill you full of pills, put the needle in take out the money. Young people will naturally not have an idea. They are just full of idealism.
- lower crime (7 of 10)
---> You should check out the slums e.g., skid row, in my blue state, which I will not mention. They are crime-ridden. Even people who have jobs and see the homeless want them gone from their neighborhoods for fear that they will assault them. State officials prefer to remove or transplant them rather than solve the issue. If the issue is solved, there won't be any issues to debate in the general elections.
- better rehab outcomes and resulting lower incarceration (10 of 10)
---> Why not design a cure for this, rather than sending them to rehab? Design hangover injection to fix the them issue. Nobody wants to do it for the same reasons as mentioned above. It's just not profitable to cure someone.
- wellbeing/QOL/happiness (7 of 10)
---> Blue state have the highest poverty rates, cause there are no jobs. In the real world money = happiness because you don't have to worry where the next meal comes from, where the rent money is coming from, and of course paying for the medical bills for conditions that need to be managed and not cured.
- average income (9 of 10)
---> Again, raising the average minimum wage, when the cost of living is high due to unemployment and other reasons, equates to no change at all.
>>> Look, I'm sure tax is theft or something, or people need to get back to debating what the right type of barbed wire is to put on a fence to keep out the roving migrant caravans that show up in the news three months before every election and who all turn around in the days following. But yeah, interesting that that's what you take out of it.
---> You seem to be quoting stuff that gets played over and over on television. I don't watch television, but actually live on a blue state where voters tend to rise from their graves along with their dead pets and vote in general elections.
Hopefully, all that "ghost-voting" will be lessened by recent voter database court decisions, at least in the US.
But, “My tongue runs too freely and knows not when to hold its peace.” :(
I always find it interesting to think about second-order consequences of actions like this. Here’s some I can think of:
1. Canadians sell their winter homes and leave the state in droves. They’re already upset about Trump’s political rhetoric.
2. Home prices plummet as stock floods the market. This is good for people who want to buy their first home. Many of these homes are in locations attractive to retirees.
3. Rental costs start increasing steadily to cover the increased taxes. This pushes people to buy homes, stabilizing home prices, but at a lower rate than before.
4. Small businesses catering to retirees and vacationers struggle as their customer base evaporates. Small businesses catering to new homeowners flourish.
5. Local government across the state are underfunded. The 5% yearly increase isn’t enough to cover the loss of income for many years to come. This either results in loss of services and blight or other taxes going up significantly. I’m guessing local sales taxes, but I don’t know what funding options exist. Schools are hit particularly hard.
—
With housing shortages across the coasts, taxing secondary residences, AirBnb, etc. actually does seem like a good idea. Vancouver BC did it to combat Chinese investment homes that were standing empty, and I believe it worked out well for them.
I’m not sure how this will work out for Florida. I’m not confident it was well thought-out, but that may just my bias that Trumpers are fueled more by rage and greed than sense. It will be interesting to see how this plays out. I hope things work out for people in Florida.
>younger people getting into the housing market faster.
Most places have this but Florida also has much more retirees on fixed incomes.
There's another bunch of buyers who can barely afford to get in to begin with, so another target group to be jetissoned after everything they have to give has been extracted. If other expenses are rising due to inflation that's enough of a threat, but taxes will naturally need to rise faster than inflation and that's what puts young first-time buyers over the edge along with the seniors.
Unfortunately that's a lot who are in a more precarious position relative to rising costs of any kind.
The very, very worst of which are non-discretionary costs.
And taxes of any kind are the biggest threat in that category.
The primary purpose of property tax is to have a claim to the property by the taxing authority, first & foremost.
Not like there's any question.
If the "owner" can't pay the tax during any of the perpetually-occurring critical periods, the property is lost relatively quickly.
OTOH with regular & proper payment of the tax, it will eventually cost more in taxes than the purchase price to begin with. Inflation will accelerate this process dramatically and if the property happens to have appreciated, the total expenditure per year can easily be more than any average small business can afford. And that's for a property which was originally purchased on a single income. Compare that to the security and sustainability of having it bought and paid for outright instead.
Property taxes are one of the major factors that put single incomes out of the running.
Obviously there's a difference in the equations you would use if you were limited to theoretical approaches, compared to witnessing first-hand how neighborhoods can rise right out of the Everglades, become populated, then everybody get taxed out of there in more-or-less one generation. Repeatedly. So fast it would make their head spin in California.
By the time 1978 rolled around I was watching Proposition 13 with interest because Floridians were so much more desperate already. That's the type of future Calif voted to prevent. In pre-air-conditioning Florida we were just a canary being non-industrial small-town retirement communities, California was always affluent and crowded so they had critical mass to do something about it.
Without Proposition 13, this is what you get, or something like this.
The least destructive tax is only on commerce, all others prove detrimental if not devastating, depending on rate.
Not just bad for "the" market, worse for a "free market", and chips away at the fundamental wealth a community could better rely on otherwise.
The Federal Reserve has also found they improve the affordability of buying homes, which leads to younger people getting into the housing market faster.
https://x.com/cremieuxrecueil/status/1955007478078255107
https://www.minneapolisfed.org/article/2024/how-higher-prope...
A land value tax is even better, because it doesn't financially discourage improving your property, and it strongly increases the incentive to sell or develop underutilized land.
Imagine the first guy arriving on the island claiming the whole land to be his, and any successive arrivers have to rent space from him in perpetuity, at rates he can decide. Not great, but not immediately obvious what a minimally-invasive improvement would look like. Now add a tax that forces the first guy to pay for every acre of land he claims. This incentivizes him to give up some of the space he's not actually using. Even in the most "rational agents in a frictionless vacuum" type of free-market macroeconomic model this is going to lead to a more efficient outcome, even more so in a more Keynesian-style model.
That reminds me of this comic, though it's more about how the first-guy can evolve some self-serving philosophies about it.
Nevertheless, Canadians own something like 500k properties of 7M-10M properties in Florida. The $12B of tax deficit carried by those properties alone would raise their taxes to $24k a year per year for $300k property; Good luck collecting. In 4 years they would lose $100k of property price to taxes so its a no brainer that they would sell and get out and they would never look back. Canadian Snowbirds will obviously choose places like Mexico to just rent; why buy.
They are going to transfer the ownership to Americans and then what? Then the deficit would even rise faster to $13B .
Florida must be spending billions on them and nobody is paying for their usage.
It might not be the full amount, but clearly someone’s paying something.
How many billion is FL paying for footpaths ?