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Old 05-02-2019, 01:00 PM
 
35 posts, read 47,847 times
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The debate on whether or not progressive tax vs flat tax is more fair is irrelevant to this topic, especially when we know, Texas will never have State income taxes.

The Property tax system in Texas, without debate, is a total convoluted mess. They need limits on annual increases at a BARE minimum.
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Old 05-02-2019, 01:36 PM
 
Location: Austin
1,062 posts, read 776,529 times
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Quote:
Originally Posted by Trainwreck20 View Post
Not to agree or disagree, but to look at the opposite side of the coin - why should someone who makes 100k pay more than a person that makes 50k? The assumption always seems to be that because you can pay more you should pay more in taxes. In some ways, that is true, but from other angles it is just as arbitrary as property tax.
That's the idea of a flat tax, you pay a flat percentage of your income. That used to be a standard conservative belief, but it seems now the country has gone so far to the right that conservatives now think a flat tax is too liberal, and they instead favor the same tax amount for everyone. Property tax is the perfect example of this, because the idea is that you simply pay an amount based on your property value, and your income have zero impact.
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Old 05-02-2019, 02:51 PM
 
Location: Dallas, TX and wherever planes fly
1,907 posts, read 2,981,673 times
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Quote:
Originally Posted by earthisle View Post
Property tax is behind people being driven out of their homes. It's a fundamentally unfair system. Income tax scales with your income so it's fairer.
This is true.. whole swaths of south Dallas have been affected by this and then later gentrified this way many of the folks displaced past their prime earning years and then the areas are reassessed and the taxes end up taking them out. East austin as well. There needs to be a balance. Hopefully Austin starts recruiting some employment sections in addition to the IT/TECH and their support as well. Other industries that don't pay as well but still decent so that things are leveled off a bit. Nobody needs another San Francisco or Seattle.
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Old 05-02-2019, 05:57 PM
 
716 posts, read 456,326 times
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well if your nest egg is in a 401k or ira you would different about income taxes

after FRA you can earn as much as you want without the progressive tax on your ss- but saving 7-10% on withdrawals makes a hell of a difference and you cant ever tell when those a holes in DC will change the rates

we dont have a tax here and i for one want to keep it that way - once they start it never ever goes down

and like others said when you reach 65 like i did it basically freezes and that an incentive also to stay and retire here - but we found the best reason - its the people and southern hospitality and for us that is priceless
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Old 05-02-2019, 06:45 PM
 
7,660 posts, read 13,822,680 times
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Quote:
Originally Posted by ManaMist72 View Post
The only negative we can think of when thinking about staying in Austin long-term is the broken property tax system. This is obviously a state-wide issue, and not limited to Austin - but poses a HUGE burden for Austin residents given that median home values have risen with no end in sight. I feel especially bad for retirees on a fixed income, and we have several neighbors who are retirees. I often wonder if they will eventually sell, and relocate to other States.

We have absolutely no idea how high our tax bill will be by the time we pay off our mortgage in 30 years, and that thought alone is terrifying.

Real estate values are rising faster than the inflation rate and economy and property taxes are rising faster than the average family's income, essentially pricing people out of their homes even with the Homestead exemption applied.

It's just a really unfair system, and makes staying here over the next 5-10 years, very questionable for us. I don't want to be priced out of our primary residence, even if we love everything else about Austin.
It isnt broken. Austin has created this problem. Property taxes have nothing to do with the rate or the valuation. Property taxes have to do with how much the government wants to spend.

The city figures out how much they want to spend. The tax district determines the value of the properties and then the city sets the rate they need to generate how much they plan to spend.


Another issue is recapture. Recapture is also not broken. Recapture is determined by the ratio of students to property value. Austin refuses to fix the affordability problem. This means that families cannot afford to live in the city which reduces student enrollment. Austin has lost about 5000 students over the last few years while the area population is booming. The schools are terrible, focused on social justice instead of focusing on making the schools awesome.

The property tax system is not broken. We are a very property rich city with relatively few students of our own so we send a lot of money to poor districts.
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Old 05-02-2019, 06:48 PM
 
7,660 posts, read 13,822,680 times
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Quote:
Originally Posted by ManaMist72 View Post
Those points all make sense. I realize it’s not fair to cherry pick real estate tax issues here, without looking at all the numbers and comparing the big picture in terms of savings here vs other cities/states.

I still do think that the property tax, having no cap to annual increases poses a huge concern though. Some people are saying their bill goes up 10% each year. That certainly doesn’t align with their income increase.

What happens 10 or 20 years from now when the bill continues to go up annually at 10%? What does the bill amount to then when you’re on a fixed income? (I’m genuinely asking because I am surprised they are allowed to increase it at the max, annually).

To be fair, we looked at other States for relocation. Scarsdale, NY was one such city, and the tax situation seemed to be one of the worst we had looked at of all places considered. High State income tax, and also very high real estate taxes. (Lots of retirees were assessed high bills, and had to list their homes because they couldn’t afford the tax property tax hikes).

From what I recall when we looked into Colorado was - the State income tax was low, and real estate taxes seemed quite reasonable to us. But I never dug into the details because we ruled it out as a prospective move.

Also, Washington State is an income tax free state, and doesn’t seem to have outrageous property taxes either.

Again, I am only going off major factors here, and haven’t factored in every aspect of our cost of living for those areas since we decided against them, but appreciate the feedback and shedding light on other areas of consideration in terms of the overall financial outlook.
People are stupid. We keep passing massive bond packages and voting in people that refuse to enable density. The school board is wasting time on changing the names of schools and feel good policies instead of hard nosed programs to improve poor performance.
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Old 05-02-2019, 06:52 PM
 
35 posts, read 47,847 times
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Quote:
Originally Posted by ikoolu View Post
well if your nest egg is in a 401k or ira you would different about income taxes

after FRA you can earn as much as you want without the progressive tax on your ss- but saving 7-10% on withdrawals makes a hell of a difference and you cant ever tell when those a holes in DC will change the rates

we dont have a tax here and i for one want to keep it that way - once they start it never ever goes down

and like others said when you reach 65 like i did it basically freezes and that an incentive also to stay and retire here - but we found the best reason - its the people and southern hospitality and for us that is priceless
While you are right about the savings on withdrawals, your real estate taxes froze in the nick of time it seems.

Real estate values continue to climb. For people with 20+ years of work ahead of them, the thought of what their property tax bill will be in the distant future is daunting to say the least. I shudder to think of what our kids will be paying when they inherit our property in the very distant future.

Austin is a wonderful city, but this is a big concern for us, as I always tend to think very long-term with finances. It's too bad, because we really do love everything else about Austin (minus the allergies).
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Old 05-02-2019, 06:57 PM
 
35 posts, read 47,847 times
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Quote:
Originally Posted by Austin97 View Post
It isnt broken. Austin has created this problem. Property taxes have nothing to do with the rate or the valuation. Property taxes have to do with how much the government wants to spend.

The city figures out how much they want to spend. The tax district determines the value of the properties and then the city sets the rate they need to generate how much they plan to spend.


Another issue is recapture. Recapture is also not broken. Recapture is determined by the ratio of students to property value. Austin refuses to fix the affordability problem. This means that families cannot afford to live in the city which reduces student enrollment. Austin has lost about 5000 students over the last few years while the area population is booming. The schools are terrible, focused on social justice instead of focusing on making the schools awesome.

The property tax system is not broken. We are a very property rich city with relatively few students of our own so we send a lot of money to poor districts.
This is very insightful info! I never knew that Austin lost over 5K students either.
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Old 05-02-2019, 07:11 PM
 
7,660 posts, read 13,822,680 times
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Quote:
Originally Posted by earthisle View Post
Property tax is behind people being driven out of their homes. It's a fundamentally unfair system. Income tax scales with your income so it's fairer.
There is no such thing as fair in life. Property tax is not inherently more or less fair. It might have results that you dont like though.

Ultimately the increase is due to city overspending not due to the increase in property value.

I favor property tax because it is paid all at once at the end of the year. Everyone can feel the property tax they are paying. At some point it will lead to fiscal conservatism.

Property tax also taxes unrealized gains in property value. Why should someone be able to have an asset worth 1Million and live in it for their entire life, potentially paying very little in tax if they have little income. Then when they die, they can pass it on to their heirs with no tax ever paid.

Property tax also increases turnover of property which is sad for the people forced out, but good for the people that move in to take their place. In california the low property taxes has dramatically reduced the turnover of housing.

Property tax also reduces property value bubbles.
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Old 05-02-2019, 08:56 PM
 
4,711 posts, read 6,584,397 times
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I was in Austin for 5 years. When my husband died, I had to decide if I wanted to stay in Austin or return to California. I decided to return. Here is why.
1. A very personal reason - old friends, connection and history. In short, my community was not in Austin.
2. I hated the heat. Although Texas has fantastic native wildflowers and other landscape plants, gardening is miserable because of heat and mosquitoes. I love cool weather.
3. Traffic is terrible, and made worse by the incessant festivals down town. (Of course, lots of places have bad traffic.)
4. I was uncomfortable with the gun culture. I know many people don't feel this way, but I hated the open carry, and the emphasis on hunting, including little animals like squirrels and doves.
5. There was very little public land. The county I now live in is 72% public land (County, State and National parks and open space preserves.) And along with that goes public trails, places to camp, hike, etc. In addition, anywhere you go, you can see nature and wild vistas.
6. I missed being close to the ocean. Not Austin's fault, just my preference.

I never talk down Austin, because I knew some really great people there, (including family members) and there were certainly nice things about it. I still visit once a year. But I just wanted to go home. I did not move AWAY from Austin, I moved TO my home County in California. Almost as soon as I got there, I was offered three part time jobs by people who knew me. All the friends, the social group of our past life was still there. I have since made many new friends. There are bad things about living here, too. But they are the things I had lived with for decades before, and I'm used to them. I think it mostly comes down to where you are comfortable and what you are used to. We all have out place. Austin just wasn't mine.
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