The 47% Myth

[newonecoming2]

Originally Posted by InformedConsent

BINGO!!!

Words taken out of context lack their original meaning.




See how it works

[simetime]

Originally Posted by workingclasshero

not sure

but why would it matter

the military is a choice..it fits some..some it doesnt

I knew a few 'rich' kids during my time in the military who were in with me

I retired after 24 years in the Army

congrats I did 20 in the Air Force, and as cushy as many of the AF jobs are I did not see or hear of any enlisted rich kids. Like I said before the ones that go in with aspirations of going into politics and get out in less then 8 years

[newonecoming2]

Originally Posted by InformedConsent

BINGO!!!

I read an article interesting stuff. Back in 2004 more than 40% of the sub prime MBS were bought by Freddy and fanny. I smell a long dead rat. You can finance a housing bubble with public money. Is that treason?

[Ultrarunner]

Originally Posted by freemkt

Reality FAIL. There is NO historical evidence anywhere that cost reductions lead to lower rents.

In California, Proposition 13 slashed property taxes an average of 57 percent, but rents did not fall, and angry renters succeeded in passing a number of local rent control ordinances.

In Massachusetts and Michigan, large property tax cuts did not result in lower rents.

Rent reductions, like all price reductions, require a first mover. Small landlords cannot be the first to lower rents, since they are already renting at full occupancy (they need to keep their units fully rented to avoid negative cash flow). Large landlords already have optimized rents and vacancy rates - they maximize profit at a non-zero vacancy rate - and have no reason to lower rents unless vacancy rates rise to undesirable levels. Since nobody has a reason to be the first to reduce rents, nobody does.

First I agree that rent is not based on cost for the most part... it is based on supply and demand.

That said... both my Uncle and my grade school teacher were renters at the time Prop 13 passed and both recieved immediate rent reductions...

My teacher made a big deal about it because the saving were enough for her to buy a plane ticket to Europe.

Fact is Prop 13 could not have passed without the support of a large number of non-home owners and it did.

[Ultrarunner]

Originally Posted by Loveshiscountry

There is no reality fail. Truth fail on your part. Property taxes were not lowered. There was a cap put on the increase.

Proposition 13 made less houses available, which is less competition, therefore rent stayed high. If demand is greater than supply prices go up. This explains why renters in California do not like proposition 13 and home owners do.
Increased on property tax were limited to 2 percent a year but when the house was sold the property tax was on the full value. Less homes changing hands, less turnover means less competition. Prices stay higher with less competition.
Why would a home owner move from a similar priced house to another if the property taxes are going to rise? If the house was sold there is the possibility it would be a rental. Since that house will not be sold there is a zero percent chance it will be a rental.
Instead of buying the same value house and moving closer to work and thereby saving money people have less incentive to do so. The property tax on the same type house is more expensive. Why save 50 a month in gas if your property taxes go up more than that per month?

Points of clarification...

Upon Prop 13 passage in 1978... property tax was rolled back to 1975 levels thus the previous huge increases many experienced were eliminated.

As to less homes changing hands... companion Props addressed this allowing seniors to down size without loosing their prop 13 status...

Third... as a home owner that bought during the housing peak... folks buying now have much lower assessments than I do... this may actually cause me to sell my home and buy another... several I know have done this because it is a win/win... lower purchase price equates with a lower locked in Prop 13 base year.

In some Oakland neighborhoods... homes are selling for the same price as 20 years ago... no Prop 13 advantage there.