Should property taxes be swapped out for something else?

Post Reply New Topic

very flawed argument,

i have seen plenty of examples of brilliant people, working their ass off and still without getting what they deserve, usually when a corporation uses their work to further their own profit.
i have also seen people in a position where their future was secure but the work they did really didnt warrant that security.

we like to think there is some system to who succeeds and who dont, (of course there are factors playing in) when in reality plenty of things are subject to "chance"

I was talking about the future not the past.

If you allow the rich and successful, to keep all their wealth across generations without taxation you end up with aristocracy, wealth must circulate in a closed system or you will get stagnation.

Previously you have had an ahem, 'empty continent' to expand into, where a man could walk out claim a piece of land and make something of himself.

Now you are kinda running out of new space and resources to exploit and grow rich off so you have to grow wealthier by exploiting the poor. An expanding system changing to a closed system.

I think I figured out why I couldn't understand where you were going with this. We have a pretty good home ownership percentage over here. The effects of this over here would be much more beneficial to the common man/woman than the 'rich elite'. Estate taxes of course are a separate issue from monthly/yearly property tax.

At least on the outset a person with a $300 or $400 per month mortgage would be paying that plus, say, $250 per month in utilities rather than that plus utilities plus another $200 to $300 per month in property taxes so long as they own the home.

As to the OP's proposal: most assuredly not, but with qualification.

When analysing a tax system you need to assess whether your tax system is created unintended impacts by differential tax treatment. If, for example, the government taxed dividends paid by companies, but did not tax interest paid by bond issuers, then every publicly traded fund would move to debt financing tomorrow, because the investment market would demand it.

If real property were left untaxed, then it would become an even more attractive investment asset than it already is and that would put companies that are in the business of dealing in land (such as owners of apartment buildings and shopping malls) in an advantageous position.

However, there is ample room for approaching taxation of real property with some sound public policy variations. Many jurisdictions separate out utility charges (sewage, water, garbage collection, etc.) and charge them as usage fees, rather than funding these activities out of tax revenues. Most jurisdictions exercise differential tax rates based on land use, and provide abatements for owner-occupied residential property. All of these are means of addressing the potential shortcomings of the property tax system without interfering with the principal that as a significant component of personal and corporate assets, they should not be immune from tax treatment.

So it sounds like you're explaining DC's position a bit better in that it would all be bought up by investors and it would be very difficult for a private citizen to build or purchase a house anymore.


Yeah, we have privatized utilities so technically as long as someone keeps paying their property taxes (and mowing their lawn) they have little more to worry about than their own discomfort. The abatements in the Cleveland, OH area though are 2%. There's a gross rate per mil that property tax is levied on, there's a bill called HB 920 that acts as a smoothing gradient throughout Ohio to make budget forcasting easier and yield better consistancy over value, there's a 10% abatement for all, and then there's that last 2% for the difference between investor and owner occupied.

I guess my own attitude is this; there are ways to make capitalism fairer, perhaps even solve many of its problems, and I get that in order to do something like described above it would mean that property investors would simply be stuck paying a hefty tax (at least in residential) to keep the vast land grab and return to feudal arrangements as DC might have eluded to from happening. Would that mean that you'd have a heck of a time keeping lawmakers from making a big loop hole from resedential into commercial? Probably.

At the same time, just thinking about all of this contagium of moral hazard, big unintended consequences, etc. brings me back to another conversation I'm having with someone right now. Often enough I'll admit that I don't know the unintended consequences of an action and, when I don't know I ask someone who might have their head around it. To claim that I've got a perfect idea because it looks good to me on paper though; I know better, and it seems like a pretty sure given that anything that seems too good to be true generally is.

The challenge with capitalism is that after a while the capital gets amassed by a small group and at that time capitalism tends to turn into either corporatism or oligarchy. We can say "look at Mark Zuckerberg, Bill Gates or Henry Ford" who all came from lower - middle class beginnings and amassed massive wealth, however that is always the exception, not the rule. I should also add that most people are not willing to make the sacrifices needed in order to slowly increase their capital.

If you saved $1000 every year, that would turn into $126.839.76 in 40 years, that means saving $2.70 every day. Most people live a 70 year run of "Keeping up with the Joneses" and thus end up living on credit and having money go out of the window in interest every year. Add to it that I've never heard a well off person say "I'm not really interested in money", but I've heard quite a few broke people saying it.

Ironically though they blaze right past the typically wealthy and become the 'megawealthy' often enough which is the caveat to the shooting stars of that nature. That said though it seems like capitalism has a wide range of ways it can be tweeked, improved, mainly in that one one is arguing that it has to be fully 'pure' capitalism to be capitalism - that's where tax dollars and philanthropy can bridge the gaps. The trick is then figuring out how to shape tax structure to encourage better behvior. I'm still for instance though getting my head around the difference between a person's living assets vs. their 'net worth', most of which is out on lease at any time in the form of enterprises they own and the holdings those enterprises have. I'd love to know, are we already playing a good amount of social anti-amassing policy by taxing the rich heavily for what they don't invest? If not, how does the investment money still end up sitting fallow in a sense and not helping people all that much? Also, if the rich were encouraged to splinter their companies off, how would that effect investing?


What's really harsh about that though; savings accounts are well below the inflation rate so really that money would be losing value and there's a good chance that you'd have less than $40,000 once you factored it back.

At the same time though yes - NT's are social creatures, for the them the tradeoff of having to work and not saving for the sake of bucking the next person for status apparently is worth the tradeoff. Kind of goes to show how subjective valuation of things is as I get the impression that even left broke at 70 many of them would either do it again, go back in error thinking they could do it differently only to be made fun of, have low status, suffer from that in ways that very few non-NT's could, and wish they could go back to do it the way they did it the first time.

Too damned honest to invent and innovate?

ruveyn

I'd be willing to give up any future social security benefits I'm owed, in exchange for complete lifelong immunity from property taxes.

Unless the USA switches to a non-capitalist economy, I propose progressive wealth taxes, as in France, Switzerland and Norway. Put anyone in forced labor camps who is accused of avoiding the tax in any way and, if they flee without paying their taxes, confiscate all of their property that remains.

However, I think that the best model would be to simply, after we abolish private property in favor of a system of agreements of use of capital with regards to citizens and groups of citizens along with a universal state monopoly on property, we simply have a system where everyone must have a job and everyone is guaranteed a job appropriate to their skills and capabilities by the state; furthermore, the state would be the main agent of distribution, thus eliminating the need for money. Rewards for hard work and creativity alongside punishments for laziness and parasitism coupled with a strong social safety net for all dutiful citizens would prevent a Brezhnevesque catastrophe for this new, planned economy, not to mention make the USA completely self-sufficient (we would still trade for extraordinary goods and have foreign relations, of course) with a very strong and stable economy.

That's easy. Just rent. Or, just transfer your social security check to your local government. Hopefully, that will be more than your property tax.

If that's the case I'm voting for the MCP from Tron as permanent benevolent dictator. I couldn't trust a group of humans to hack this responsibility.

Lol, if she's anywhere under 30 she might go to the social security office at 67 or 68 just to meet Bigfoot from Howard Stern saying "Wut check?".

To start at the beginning with taxes, currently the capital gains tax in the US is around 15% which is significantly less than income tax, which does create a problem since a poor or middle class person will get their money from income whereas a rich person gets it from capital gains. Combined with the loopholes in the taxcode and the ability of the rich to hire people to exploit said loopholes the poor and middle class are "screwed" (figuratively speaking) before they even cash their paycheck.

The anti-amassing programs are not working so they need to be revised along with the tax code. Investment money can drive demand by hiring people who then spend their salaries on products, the challenge comes when these jobs are created in China. When a job is outsourced its a double problem, because not only does the state lose out on the taxes from that person, it loses out on the taxes paid by the company and furthermore, there is disability , food stamps and so on. More social disparity means more crime and so the spiral goes. It's a complex issue and I'm not well versed enough in some areas of U.S law and taxes to write extensively on it.

The effects of companies splitting up could be massive or it could be uneventful. The biggest challenge could potentially be that they'd lose out on the benefits of being a huge company, such as cheaper financing, cheaper staff. There could be high volatility in the market and in stocks in general, there could be some liquidity issues as many investors are unlikely to spread their assets equally among the different smaller companies. It would be a slight problem for casual investors since "safe" dividend stocks and blue chips may disappear.
Not to mention I'd have to add at least 6 more rooms to my memory palace to keep the information about all that companies in.










What's really harsh about that though; savings accounts are well below the inflation rate so really that money would be losing value and there's a good chance that you'd have less than $40,000 once you factored it back.

At the same time though yes - NT's are social creatures, for the them the tradeoff of having to work and not saving for the sake of bucking the next person for status apparently is worth the tradeoff. Kind of goes to show how subjective valuation of things is as I get the impression that even left broke at 70 many of them would either do it again, go back in error thinking they could do it differently only to be made fun of, have low status, suffer from that in ways that very few non-NT's could, and wish they could go back to do it the way they did it the first time.[/quote]

Sorry, I have a tendency of assuming other people follow my train of thought or have the same pre existing knowledge base as I do.

You have it pretty close.

Basically if you have zero property taxes it is laughably simple for bankers to bankrupt a whole nation of people and then repossesses all the property in a country (because people can't pay the debts they secured against their property), turning once proud owners into enslaved tenants.

If you are thinking capitalism is wonderful and such a thing could never happen in America you really need to read up on your nation's history.

Specifically the bit about late nineteenth century monetary policy and tenant farmers.

If you think it is a one off event, why do you think some bloke called Thomas Jefferson (stinking commie) said this:



If you are not a fan of reading up on ancient history, you could always just open your eyes and look out the window, it's not as if the banks aren't flagrantly doing this exact same thing right now.