Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Property tax caps are a horrible idea wherever they exist. Depending on how they're imposed, they distort and screw up the housing markets and prevent states and localities from making rational budgetary decisions. (It's similar to how rent controls and rent stabilization in NYC has screwed up the market for apartments and skewed how landlords make decisions about their property) Tax caps wildly inflate the price of housing beyond what it would otherwise be bcause the taxes are kept artificially low. And we've seen how badly that's turned out in much of the U.S.
California isn't in such horrible financial shape because it spent too much, as the conservatives like to argue, but because it's property markets have been wildly distorted and localities squeezed of revenue. Cutting costs is one tool that they have. But Prop 13 essentially killed the other tool, raising revenue. It's like the Congress trying to balance its budget by starving federal programs and never increasing taxes. It just won't work
Witness the revolts this weekend in Europe against such stupid austerity, which is economically dumb and politically unpalatable.
Luckily, as you say, there is at least a way to raise more bucks for school funding in NYS. Everybody wants lower taxes. And everybody wants great municipal and state services. But there's no free lunch. Ever.
Indiana has a property tax cap at one of the lowest rates in the nation
All personal property taxes are capped at 1%
2% for farms and 3% for business by the Indiana Constitution
Income Tax is 3.4% flat rate and sales tax is 7% standard across the state. Only Indianapolis charges an additional 1% sales tax on Resturants only.
Hence another reason i love Indiana.
Low Balanced taxes with a balanced budget in the state so you dont have to live in fear of state taxes going up
Plus Indiana is going to phase out its Inheritance tax by 2020.
One of the only states in the nation to cut taxes during a recession and maintain a balanced budget.
It's just that it is very difficult to survive with no cap when a person is living on a limited income, owns their own home but can never relax because the teachers have such high salaries and benefits here. We did not have children, so it's not like we got our children educated and now want to move. That's what many people do here.
If property values go up, ( as well as taxes,) but a person wants to just stay in their home for the rest of their life, it really doesn't help them.
Some places have a tax circuit braker to help people whose property taxes far exceed their income.
It would nice to be wealthy enough to just let taxes go up to pay all the unions etc., but not everyone is fortunate that way.
In Michigan, your property taxes can only increase by 5% or by rate of inflation depending on which is the lesser amount per year. It only rises uncapped when the house is sold and is reassessed at market value. Taxes can be reduced only if your taxable value is 50% more than the market value after a reassessment.
Even in this economy, not many places within Michigan have seen that large of a drop except for within Detroit. But that still only applies to certain neighborhoods. So while your taxes won't skyrocket with the economy, they also won't drop with the economy unless your neighborhood deteriorates pretty badly.
Last edited by animatedmartian; 05-08-2012 at 08:43 PM..
Reason: more concise
In Michigan, your property taxes can only increase by 5% or by rate of inflation depending on which is the lesser amount per year. It only rises uncapped when the house is sold and is reassessed at market value. Taxes can be reduced only if your taxable value is 50% more than the market value after a reassessment.
Even in this economy, not many places within Michigan have seen that large of a drop except for within Detroit. But that still only applies to certain neighborhoods. So while your taxes won't skyrocket with the economy, they also won't drop with the economy unless your neighborhood deteriorates pretty badly.
And exactly the reason why i prefer to live in Indiana.
1% cap is easy to understand and implement.
Heck quite a few Michiganders especially ones near the border with Indiana have been buying homes in Indiana because of property taxes.
And exactly the reason why i prefer to live in Indiana.
1% cap is easy to understand and implement.
Heck quite a few Michiganders especially ones near the border with Indiana have been buying homes in Indiana because of property taxes.
Yea, Michigan's is complicated. I'm not even sure if I explained it correctly...
But I understand why they did it that way. A flat tax will lose value with increasing inflation so that at some point it would have to rise anyway to make up for that lost revenue. A weaker dollar will buy less in given time.
With Michigan's increase with inflation, municipalities don't lose any revenue if property values don't rise over a long period of time and have roughly the same buying power as they did 15 years ago.
It also means that homeowners will have taxes that are lower than they would be without a cap, but not so low that the city wouldn't be able to pay for services if they don't gain in property values.
Last edited by animatedmartian; 05-09-2012 at 11:47 AM..
Yea, Michigan's is complicated. I'm not even sure if I explained it correctly...
But I understand why they did it that way. A flat tax will lose value with increasing inflation so that at some point it would have to rise anyway to make up for that lost revenue. A weaker dollar will buy less in given time.
With Michigan's increase with inflation, municipalities don't lose any revenue if property values don't rise over a long period of time and have roughly the same buying power as they did 15 years ago.
It also means that homeowners will have taxes that are lower than they would be without a cap, but not so low that the city wouldn't be able to pay for services if they don't gain in property values.
With how big and bloated Government is today i think we can live with some cuts.
Indiana's property tax cap is 1% of assessed value for homeowners. However, certain charges are not subject to the 1% cap, including any levies approved by voters. These charges can actually make a homeowner's tax higher than the 1%.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
