Why does TX have such high property taxes relative to other no income tax states? (Brownsville: for sale, real estate)

[LocalPlanner]

Originally Posted by Treasurevalley92

I agree 100% with everything you just said.

At least with income tax they tax you one time...property Taxes hit you year after year just for owning property. No one should be taxed on things they already own...

How stupid would it sound if they Taxed me on my Macbook every single year? I paid my taxes when I bought it.

There is justification for property taxes in the concept of the tax "incidence" falling upon those who receive the services. Many public services are expressly tied to the location and features of specific properties. Think emergency and public safety services, regulatory services (for those who like regulation), etc. It's basically a consumption tax, with the incidence falling on the owners of the property (who can of course pass that cost on to those renting or leasing the property) who are the ones benefiting from such geographically based services. Now, you can argue that such a tax should be shifted primarily to land rather than improvements, and you would have a point.

[Treasurevalley92]

Originally Posted by LocalPlanner

There is justification for property taxes in the concept of the tax "incidence" falling upon those who receive the services. Many public services are expressly tied to the location and features of specific properties. Think emergency and public safety services, regulatory services (for those who like regulation), etc. It's basically a consumption tax, with the incidence falling on the owners of the property (who can of course pass that cost on to those renting or leasing the property) who are the ones benefiting from such geographically based services. Now, you can argue that such a tax should be shifted primarily to land rather than improvements, and you would have a point.

I would settle for that, for sure....but there is no reason a municipality couldn't have Sales Tax cover that.

Or imagine this: there is a per resident Tax that is a public Safty Tax. Covers the Cops and Fire Department. Has nothing to do with improvements to your property.

I mean our water bill pays for the water infrastructure (or should at least) so why is public safety different? Think of it as mandatory insurance....people might be shocked how much money they are wasting on the fire department and cops...Fire Department Specificly...there are way less house fires now than ever and those departments are filled with glut. Most Calls that they drive a massive truck to are EMT calls that don't even need a fire truck.

Roads are already not paid for completely by gas Tax....and it is only getting worse...cars are getting heavier and more fuel-efficient. Electric Cars don't pay their share. We should switch to a Milage and Weight usage-based fee.

Schools should be paid for by State Income Tax. Yes the rich will pay for more of it, but it is to their benifit to have an educated work force for them to hire.

The only Property Taxes you should ever pay is sales Tax. If you own the property you should own the property, not pay anual rent to the government which they can raise without prividing you anything extra.

[albert648]

Originally Posted by Treasurevalley92

Schools should be paid for by State Income Tax.

Absolutely not. Any state income tax would just get added on top of the existing taxes and the net result is almost always just more taxes.

Also if we're charging per head for public safety and other services, why should schools be any different?

If we're talking about going to a strict user pays model, schools should be funded by a per-user tax that you pay when you enroll your child each year that varies as a function of income and assets. They don't even need to reinvent the wheel on this - just get everyone to fill out FAFSA each year to collect the information needed to figure out how much to charge per kid. This shifts the burden of educating their kids on the parents, as it should be. Instead, allow parents to enroll their kids in any public school they want, not just the ones they're districted for. The ones that do a poor job or overcharge for their services either fail or get consolidated into other school districts.

Or better yet, the state could start consolidating the various government services where it makes sense to become more efficient. A township with a population of 400 doesn't need its own fire department, they should share a larger one with 3 adjacent towns.

[dozener]

Originally Posted by albert648

Absolutely not. Any state income tax would just get added on top of the existing taxes and the net result is almost always just more taxes.

Also if we're charging per head for public safety and other services, why should schools be any different?

If we're talking about going to a strict user pays model, schools should be funded by a per-user tax that you pay when you enroll your child each year that varies as a function of income and assets. They don't even need to reinvent the wheel on this - just get everyone to fill out FAFSA each year to collect the information needed to figure out how much to charge per kid. This shifts the burden of educating their kids on the parents, as it should be. Instead, allow parents to enroll their kids in any public school they want, not just the ones they're districted for. The ones that do a poor job or overcharge for their services either fail or get consolidated into other school districts.

Or better yet, the state could start consolidating the various government services where it makes sense to become more efficient. A township with a population of 400 doesn't need its own fire department, they should share a larger one with 3 adjacent towns.

Great post, I agree with all of this. Having property taxes bear the weight for paying for schools always seemed silly to me

[supfromthesite]

Originally Posted by LocalPlanner

There is justification for property taxes in the concept of the tax "incidence" falling upon those who receive the services. Many public services are expressly tied to the location and features of specific properties. Think emergency and public safety services, regulatory services (for those who like regulation), etc. It's basically a consumption tax, with the incidence falling on the owners of the property (who can of course pass that cost on to those renting or leasing the property) who are the ones benefiting from such geographically based services. Now, you can argue that such a tax should be shifted primarily to land rather than improvements, and you would have a point.

City income tax. Sales tax. Or, you could take the property tax rate that goes to schools (it is already divided up anyways thanks to Robinhood!) and make that money that goes to schools come from a state income tax. It would at least lower the property taxes a bit.

[supfromthesite]

Originally Posted by albert648

Absolutely not. Any state income tax would just get added on top of the existing taxes and the net result is almost always just more taxes.

All the state has to do is put a cap on the property tax percentage and walla! They can make an amendment that says no school funding MUST come from a state income tax (or sales tax). There is plenty of ways around this.

I understand your skeptical view on taxes and the government, and I resonate with it completely. I think this is a tired argument though. There are plenty of ways to get around it, if a true fiscal conservative is writing the bill.

[supfromthesite]

allow parents to enroll their kids in any public school they want

This is a good idea at the surface, but I think it will just result in rich people sending their kids to private schools (even more than they do now).

[albert648]

Originally Posted by supfromthesite

This is a good idea at the surface, but I think it will just result in rich people sending their kids to private schools (even more than they do now).

No system is perfect but I don't know if that's such a bad thing. It would force public schools to become more efficient and focus on providing a better education instead of building fancy stadiums or go under and get merged into another district. Inefficient schools with bloated administrations that can't competently perform its primary function - provide an education to students and set them up for success in adulthood - should be allowed to fail and students and the resources funding their educations redistributed among the better performing schools, public, private or otherwise.

Besides, from 6th grade onwards, students should not need to be in school every day between distance learning and self-study options unless there's some special need (learning disabilities) that require more attention.

[deadwood]

Originally Posted by dozener

Only NH has higher property taxes out of that group with the majority being considerably lower. What is TX doing different policy wise that is causing property taxes to be so heavy compared to places like WA, TN and FL?

The corporate tax payer is using the Courts to resolve their issues with appraisal district valuations, and are winning big.

An actual case, a property is purchased for $75 million, the corporate buyer receives the appraisal district valuation of $74 million and protests valuation to ARB. In Texas, ad valorem taxes based upon property valuations greater than the fair market value are prohibited. While the taxpayer is required to follow the the administrative process in order to file suit in State Court, virtually no person without an intimate relationship with the property tax code is going to know the pleadings to obtain the desired relief from the Court. The final judgment of the Court was in favor of the corporate taxpayer setting the valuation of the property at $37.5 million.

But it just goes to show that a long habit of not thinking thing wrong gives it the superficial appearance of being right. While my neighbors are paying $3-4k property tax all I can say is that I am going to have to think about whether my $55 property tax is fair, but it clearly isn't equitable.

[Westerner92]

Here’s what I said about it just yesterday in another post: I'm not a fan of taxing owner-occupied property and would advocate for a progressive property tax for property investors. Property tax money can be easily gerrymandered and pits municipalities against each other. It encourages the splintering and siloing of government functions, which decreases efficiency. It makes municipalities think of urban development in short-term transactions instead of long-term habitability, which skews real estate markets in favor of investors over owner-occupiers, which makes for a lower quality city. It's essentially a wealth tax that inhibits the main form of middle class equity building.

To add to that, I live in one of the lower property tax rate jurisdictions in the nation. Even owning an above-median-priced home and paying income tax on an income almost twice what I made in Texas, my combined tax burden is lower than if I were to have bought a similar home in Texas, and the services are better overall I’d say. The state government distributes the money effectively (though it could definitely do better), though I don’t know if Texas could swing that.

Originally Posted by StealthRabbit

Texas has many, many dinky counties (smaller population than a small town) = LOTS of duplicate infrastructure and costs.
ISD (Independent School Districts) are even more plentiful than counties = LOTS of duplicate infrastructure and costs.

This is a big point that I think gets lost on a lot of people, and I’ve been on my soapbox about it lately. Most parts of the country have so many small/overlapping/inefficient/redundant local entities.

Originally Posted by LocalPlanner

There is justification for property taxes in the concept of the tax "incidence" falling upon those who receive the services. Many public services are expressly tied to the location and features of specific properties. Think emergency and public safety services, regulatory services (for those who like regulation), etc. It's basically a consumption tax, with the incidence falling on the owners of the property (who can of course pass that cost on to those renting or leasing the property) who are the ones benefiting from such geographically based services. Now, you can argue that such a tax should be shifted primarily to land rather than improvements, and you would have a point.

I appreciate how you call it out as a consumption tax, and the concept of incidence is an important factor considering a more equitable alternative. My line of work involves a lot of cost estimating for infrastructure, and physical dimensions are almost always the primary factor in infrastructure costs. Perhaps a one-time $/square foot of lot size to be paid at point of sale?