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There was no rent control anywhere in the state before Prop 13.
The higher property taxes kept property values in check - like in Texas nowadays. If 13 was repealed, speculation would decrease and property ownership could become accessible to the non-wealthy again. This is not saying that non-wealthy people would be able to afford Santa Monica, Beverly Hills, Malibu, Carmel, Atherton, the Marina District, St. Francis Wood, Stinson Beach, La Jolla, Newport Beach, etc. if there was no Prop 13 - they wouldn't. But those of us in the 99 percent who didn't inherit property would be able to own in larger numbers. I personally think it's a matter of when, not if. After Old Moonbeam goes, most likely. (Brown's probably the only obstacle to getting rid of 13.)
Nope, the prices kept going up. Price and tax is not an issue as now so much money comes from overseas. Prop 13 saved many people, especially older folk, from losing their homes. Taxes do not keep prices in check and did not before prop 13. If you can't afford it in So Cal, then you do not have enough money so buy elsewhere. So Cal will always be expensive now and taxes will not change that significantly. Higher Taxes in TX are due to NO State Income Tax, so it has to be made up somewhere. Oh, in TN the taxes are lower than in CA, prices are lower and NO State income tax, so your theory is not based on reality. Driving up prices to drive those who could not then afford the home out, so you could buy a lower priced home is ........................ well
Nope, the prices kept going up. Price and tax is not an issue as now so much money comes from overseas. Prop 13 saved many people, especially older folk, from losing their homes. Taxes do not keep prices in check and did not before prop 13. If you can't afford it in So Cal, then you do not have enough money so buy elsewhere. So Cal will always be expensive now and taxes will not change that significantly. Higher Taxes in TX are due to NO State Income Tax, so it has to be made up somewhere. Oh, in TN the taxes are lower than in CA, prices are lower and NO State income tax, so your theory is not based on reality. Driving up prices to drive those who could not then afford the home out, so you could buy a lower priced home is ........................ well
Economic illiteracy in action.
If higher property values are going to result in higher taxes, then speculation is discouraged, and there are incentives pushing prices down. Prop 13 created tax shelters for the wealthy, and has created bubbles.
Taxes definitely keep prices in check, as they lower demand - with less demand comes lower prices.
Note that Texas did not have problems with speculation and was largely unaffected by the housing collapse of 2008 - while the states that were hurt the most were all states with low or no property taxes like CA, NV, and AZ.
High property taxes and low or no income tax is a recipe for stability, because property won't go anywhere.
Certain places will always be expensive, like the places I named (not all of which are in SoCal). Most other places in the state won't be.
If 13 was repealed property values would definitely fall - inventory of homes on the market would increase, driving prices down, and speculators would flee.
California could raise $9 billion a year for education and public services if commercial property taxes were reassessed regularly.
"Since the measure's (Prop 13) passage, commercial properties in California have paid a progressively decreasing share of property taxes, a source of revenue that accounted for most of our state's budget before Proposition 13. Today, many of the wealthiest corporations in the state still pay taxes based on the values of their properties in 1975. Chevron alone saves more than $100 million a year in property taxes while, per square foot, Walt Disney Co. pays eight times less than the average California homeowner."
Sure, it's a great idea. There aren't enough employers abandoning the state yet, we need to make it even more expensive to operate here, so more jobs will go elsewhere.
Sure, it's a great idea. There aren't enough employers abandoning the state yet, we need to make it even more expensive to operate here, so more jobs will go elsewhere.
Economic illiteracy in action.
If higher property values are going to result in higher taxes, then speculation is discouraged, and there are incentives pushing prices down. Prop 13 created tax shelters for the wealthy, and has created bubbles.
Taxes definitely keep prices in check, as they lower demand - with less demand comes lower prices.
Even if higher property taxes in CA moderated or lowered property prices, the overall cost of ownership would not lower and the middle class would still be frozen out. If the property taxes were allowed to rise unfettered, the rich would own a larger percent of the property in the state as they would be the only ones that could afford it.
Quote:
Originally Posted by majoun
Note that Texas did not have problems with speculation and was largely unaffected by the housing collapse of 2008 - while the states that were hurt the most were all states with low or no property taxes like CA, NV, and AZ.
You are basically saying taking money from someone benefits them in all things because you can barely tie government spending on any program to somehow increase home prices and ultimately benefiting home owners. The opposit would be a tax on all non homeowners to promote housing development which would lower housing prices.
Point well taken, that was an interesting perspective. After thinking it over, I would like to point out that it is still a somewhat separate issue from the free market concept I was applying.
As I mentioned earlier, an ideal free market will place an accurate value on everything. This is necessary for the hypothetical, promised big-picture benefits to work well. I have noticed that a lot of individuals use "free market" as a euphemistic shorthand term for what is actually "laissez-faire" capitalism where taking advantage of less well-informed customers is morally justified.
In my opinion from earlier, the benefits exist so there must be some sort of dollar valuations to them. Although we may disagree about whether or not such a system should be in place to begin with, we should acknowledge that there is an observable benefit. Therefore there is some price in place on the benefit (various forms of social stability for the wider population, economic benefits for a limited sub-population), which we should weigh against the cost (taxes spent).
I understand your example was meant to be absurd from our everyday viewpoint. But:
1. If I think about it a bit and overcome my initial resistance to the idea
2. Apply ideal free market reasoning to it
I would say that if such an arrangement were actually made available and IF subscribers have a demand for it, it could actually work once the right price is found. It's just a matter of people accepting this product's existence. The strongest argument against the concept is in a failure of execution [ie. human error and human selected pricing], not necessarily that an ideal free market couldn't have a place for it if the price-performance works out.
Not saying we should do this of course, but conceptually I think it supports the idea that taxes paying for higher education does produce measurable benefit and a price is justified. It's just a question of what that price should be.
To tie this back to the thread, a lot of the beneficiaries of higher education are corporate employers. Having them pay their share of property taxes should be justifiable but then what would be the appropriate rate that fairly compensates the CA colleges and university system without overpricing/overtaxing commercial properties?
Economic illiteracy in action.
If higher property values are going to result in higher taxes, then speculation is discouraged, and there are incentives pushing prices down. Prop 13 created tax shelters for the wealthy, and has created bubbles.
Taxes definitely keep prices in check, as they lower demand - with less demand comes lower prices.
Note that Texas did not have problems with speculation and was largely unaffected by the housing collapse of 2008 - while the states that were hurt the most were all states with low or no property taxes like CA, NV, and AZ.
High property taxes and low or no income tax is a recipe for stability, because property won't go anywhere.
Certain places will always be expensive, like the places I named (not all of which are in SoCal). Most other places in the state won't be.
If 13 was repealed property values would definitely fall - inventory of homes on the market would increase, driving prices down, and speculators would flee.
The property tax in Nevada is higher than California and they have no income tax, so if your theory is correct, then why is Nevada one of the worst states in terms of recovery? Property tax doesn't influence speculation, the anticipated net appreciation does. So if housing prices are expected to rise 10% and property tax is 5% speculators will still be interested in investing.
Point well taken, that was an interesting perspective. After thinking it over, I would like to point out that it is still a somewhat separate issue from the free market concept I was applying.
As I mentioned earlier, an ideal free market will place an accurate value on everything. This is necessary for the hypothetical, promised big-picture benefits to work well. I have noticed that a lot of individuals use "free market" as a euphemistic shorthand term for what is actually "laissez-faire" capitalism where taking advantage of less well-informed customers is morally justified.
In my opinion from earlier, the benefits exist so there must be some sort of dollar valuations to them. Although we may disagree about whether or not such a system should be in place to begin with, we should acknowledge that there is an observable benefit. Therefore there is some price in place on the benefit (various forms of social stability for the wider population, economic benefits for a limited sub-population), which we should weigh against the cost (taxes spent).
I understand your example was meant to be absurd from our everyday viewpoint. But:
1. If I think about it a bit and overcome my initial resistance to the idea
2. Apply ideal free market reasoning to it
I would say that if such an arrangement were actually made available and IF subscribers have a demand for it, it could actually work once the right price is found. It's just a matter of people accepting this product's existence. The strongest argument against the concept is in a failure of execution [ie. human error and human selected pricing], not necessarily that an ideal free market couldn't have a place for it if the price-performance works out.
Not saying we should do this of course, but conceptually I think it supports the idea that taxes paying for higher education does produce measurable benefit and a price is justified. It's just a question of what that price should be.
To tie this back to the thread, a lot of the beneficiaries of higher education are corporate employers. Having them pay their share of property taxes should be justifiable but then what would be the appropriate rate that fairly compensates the CA colleges and university system without overpricing/overtaxing commercial properties?
I still don't see how you can tie taking money from one person to give to another as a free market ideal.
In a free market system, the government would t be involved in higher education to begin with. In a free market the entire point of higher education is either 1. Increase of knowledge and 2. Increase of marketable skills. Sometimes 1 and 2 overlap, but not always. Number 1 has no benefit to society, number two has a very distant connection to society. Employers benefit from having a knowledgable working class but the working class is equally benefited by having skills which increases earnings.
In a free market the government will provide zero towards education or loans, loans would be given by private banks based on the persons likelihood to pay the loan back, person goes to a private school and learns a marketable skill (not just an increase in knowledge), applied for a job which pays more than one without a marketable skill and the loan is paid back, the school gets the money for its service. The employers makes money from having an educated employee and everyone wins.
The current system that treats knowledge the same as marketable skill is what causes problems.
Personally I think property taxes should be eliminated altogether because it taxes unrealized paper gains in real estate. In the last few years, like most California homeowners, the appraised value of my home has gone up and so have my property taxes. Although the paper value of my home has gone up, there has been no commensurate increase in either my income or savings. This means that these higher property taxes take a bigger bite out of a relatively fixed budget. Don't tax unrealized gains in illiquid assets! Stocks are not taxed on paper gains, only when sold. This is much more logical.
I would support abolishing property taxes and replacing them with a local income tax or VAT. Something that is based on my actual income or spending, not taxing paper wealth that I can't spend.
... a lot of the beneficiaries of higher education are corporate employers. Having them pay their share of property taxes should be justifiable but then what would be the appropriate rate that fairly compensates the CA colleges and university system without overpricing/overtaxing commercial properties?
Probably anything over the tax rate they're paying now, which is apparently set at 1975 prices.
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