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This is true. Income tax is a progressive tax (meaning you make more, you pay more) and property tax is regressive. It's regressive because sometimes your home value doesn't correlate with how much you can pay for taxes, especially if your home is paid off or you bought it a long time ago (think an old retired couple living in a paid-off house that they now have to pay 15K a year on).
I don't know what you mean by "don't correlate". Taxes are a linear multiple of assessed value, so correlation within a given locale is close to 1.0 with the error being attributable to inaccuracies in the assessment process.
It is also voluntary. That retired couple do not have to pay 15k a year in property taxes -- they have the option of moving to somewhere where the property taxes are lower, or moving to a smaller house. The smaller the taxing jurisdiction, the less coercive the tax.
The young doctor who just starts pulling in good money in his late 20s, and has years of student loans to pay off isn't rich by any stretch of the imagination (especially since the government is grabbing a good chunk of his earnings and using it to pay government workers, many of whom enjoy better living conditions at the same age).
"It's regressive because sometimes your home value doesn't correlate with how much you can pay for taxes"
You could own a home that is now worth 600K, let's say, so you owe 15K a year property tax on it hypothetically. You could own it outright. However, you may be on a fixed income for whatever reason (retirement, disability, etc) and not be able to pay 15K a year. Therefore the value of your home, which is now 600K, does not correlate with your ability to pay the property tax on it. This is what makes it a regressive tax in some cases. It can hit lower-earners more than higher-earners. Sales taxes are also regressive.
I'm not saying the assessment process is wrong. I'm also not against property taxes if the alternative is giving more money to the state gov't.
However, cases above stink when they happen. I don't think that a senior should have to move out of their family home just because they can't afford the property taxes anymore. That's a shame and it also hurts the towns because relatively speaking, seniors don't cost towns a lot in terms of school costs.
However, cases above stink when they happen. I don't think that a senior should have to move out of their family home just because they can't afford the property taxes anymore. That's a shame and it also hurts the towns because relatively speaking, seniors don't cost towns a lot in terms of school costs.
One could deal with the above by having tax breaks for seniors.
However, I don't see anything wrong in principle with the above. Property taxes are a good way to prevent assets accumulating in the hands of non-producers. Avoiding consumption taxes of any kind (by consuming less) doesn't hurt the overall economy (whereas avoiding taxes on production like income tax does) As for the seniors in question -- assuming that their children are going to inherit the house, why don't their kids bail them out (instead of me) ? Or, if their kids are not going to inherit it and they have 100% equity, why not reverse-mortgage it ?
I don't think someone who is priced out of today's housing market should have to pay for the amenities of those who are living the good life.
One could deal with the above by having tax breaks for seniors.
However, I don't see anything wrong in principle with the above. Property taxes are a good way to prevent assets accumulating in the hands of non-producers. Avoiding consumption taxes of any kind (by consuming less) doesn't hurt the overall economy (whereas avoiding taxes on production like income tax does) As for the seniors in question -- assuming that their children are going to inherit the house, why don't their kids bail them out (instead of me) ? Or, if their kids are not going to inherit it and they have 100% equity, why not reverse-mortgage it ?
I don't think someone who is priced out of today's housing market should have to pay for the amenities of those who are living the good life.
I think we do have property tax breaks for seniors, or at least that freeze, but your income has to be quite low, but it's good for the people it helps. Reverse-mortgaging is an option, as is your kids helping you out, who will ultimately inherit the property.
It is not good that so many of our seniors have to move though, and often out of state. Seniors cost a town less than a house full of kids. Every time a senior leaves because of property taxes, it is a net loss to the town because the costs of a family with children moving in can be much higher than the taxes they will pay. I am for giving extensive property tax relief to people on fixed incomes.
I see your point too. Personally, I'm on the same side as you, but maybe for different reasons. I like local control and again, the thought of giving more money to the state is terrifying, because we all know where it would go.
One could deal with the above by having tax breaks for seniors.
However, I don't see anything wrong in principle with the above. Property taxes are a good way to prevent assets accumulating in the hands of non-producers. Avoiding consumption taxes of any kind (by consuming less) doesn't hurt the overall economy (whereas avoiding taxes on production like income tax does) As for the seniors in question -- assuming that their children are going to inherit the house, why don't their kids bail them out (instead of me) ? Or, if their kids are not going to inherit it and they have 100% equity, why not reverse-mortgage it ?
I don't think someone who is priced out of today's housing market should have to pay for the amenities of those who are living the good life.
Huh? "Prevent assets from accumulating in the hands of non-producers"?? So once you retire, you should be stripped of your assets? That's absurd. So I should buy a house, pay taxes for 40 years (both income and property), and then be forced out of the neighborhood I contributed to because the state can't operate without charging me $8,000/year for my 60 y/o bungalow?
I guess the seniors should all be pushed out into retirement homes so they can be amassed in one place, making room for more "producers"......
.......].That retired couple do not have to pay 15k a year in property taxes -- they have the option of moving to somewhere where the property taxes are lower, or moving to a smaller house. ...
.
And because of the state government those are the options you give them concerning their home that they paid for, raised a family in, celebrated holidays with friends and neighbors?
Move or hand your retirement money it over to the politicians for them to redistribute in their own interests?
Why don't we just outlaw the private ownership of real estate and let govt dictate peoples "living needs"?
. Property taxes are a good way to prevent assets accumulating in the hands of non-producers. .
Welfare recipients, or non-producers as you call them, aren't likely to accumulate assets.
People like me (i.e. producers) do accumulate assets by investing, sacrificing and living under or within our means.
I do consider what I've manged to accumulate as mine and my family's to do as we see fit with and don't need your or the people you choose to elect to decide that "you have too much, give it to me".
Huh? "Prevent assets from accumulating in the hands of non-producers"?? So once you retire, you should be stripped of your assets? That's absurd. So I should buy a house, pay taxes for 40 years (both income and property), and then be forced out of the neighborhood I contributed to because the state can't operate without charging me $8,000/year for my 60 y/o bungalow?
I guess the seniors should all be pushed out into retirement homes so they can be amassed in one place, making room for more "producers"......
The taxes cost what the taxes cost. If a senior would like to stay in their home in NJ instead of moving on to a low cost of living place, they should save enough to pay their taxes until they die. Its not stripping anyone of their assets and I do not believe we should be catering to seniors by lowering their taxes in any way. If you can't afford the taxes, its time to sell and move on.
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