States Target Property Taxes as Home Prices Zoom

[NNN0LHI]

http://ap.tbo.com/ap/breaking/MGBI32YJ19E.html

Soaring property taxes are a top worry in state legislatures across the country, where lawmakers are trying to appease disgruntled homeowners and, in some cases, courts that are demanding change in the system so schools are more equitably funded.

Some states are weighing plans to lower taxes. Others just want to keep them from rising too fast. Still others are aiming to substantially change the tax system and find another way to help pay for schools that closes the quality gap between wealthy and poor communities.

"People are facing being taxed out of their homes," said Ted Harris, a 69-year-old retiree living on the Nevada side of Lake Tahoe, whose taxes climbed from $2,200 in 1990 to $12,000 last year. "Government simply swallows the money and finds lots of reasons to spend that money."

From Texas to Illinois to Pennsylvania, lawmakers are weighing property tax caps, limits, exemptions and other ways to ease the burdens for homeowners - whose tax bills are the down slide of home values increasing. Proposals to change the system have become part of the gubernatorial campaigns in New Jersey and Virginia, the only states with governor's races this year.

[bemildred]

1. This is how we got Prop 13 in California.

The legislature and the Governor at the time absolutely
refused to look at the problem, so the citizens voted for
a bogus solution that at least protected grandma somewhat.

[PurityOfEssence]

3. Then again...

Yes, it galls me to no end to know that some of my neighbors in comparable homes probably pay a tenth of what I pay in property taxes, but it's nice to know that my assessment is locked at my purchase price. Not doing so is a real danger for the middle class: those of us who are prudent enough to have fixed mortgages and try to live within our means help provide much of the tax base both for income taxes and property taxes. To have one's property taxes be subject to faddish assessments is dangerous to society as a whole.

I don't know what a fair fix would be, but my property taxes are pretty damned big. Then again, Los Angeles County provides many good services, and being in the city, the Department of Water and Power is a downright bargain.

As for your statement, you are absolutely correct, except for the interpretation of Grandma: she got VERY protected by that prop.

Sadly, the history of taxation in this country (and probably everywhere) has been a consistent cynical series of attempts to get other people to pay while we skate. That's the spirit behind "sin taxes", and that's the method by which Reagan sold his legendary screwing of the country. Far too many people feel that they shouldn't have to pay much of anything, and everyone else should. When the poor or working class does it, it's understandable, but when the rich do it, it's despicable. John Edwards is spot-on about this: we now have a systematic attempt to shift the tax burden simply onto wage-earners, and let everyone else subsidize the rich.

How to fairly tax property is another matter. Locking it at purchase price isn't that fair on the ensuing buyers and doesn't take into account the many changes a community may have that would necessitate more revenue, but to not lock (or mathmatically restrict increase percentages) is to screw working- and middle-class homeowners. What would you suggest?

[K8-EEE]

6. We Don't Pay Enough Prop Tax In CA

I pay $2400 a year, my friend in RI pays like $6,000. Hey nobody LIKES paying taxes and yes they should be affordable but there are rich people in mansions who pay what I pay and that's ridiculous.

The days before Prop 13, those were the days we had the best public schools, community colleges, there are a thousand "millionaire row" neighborhoods in L.A. and I would guess over half of them pay the same as my working-class neighborhood bungalow. It's seriously out of whack.

[GHOSTDANCER]

9. We pay enough!!!! It's corporations with the tax breaks that don't!!

[K8-EEE]

10. Yeah Corp Properties AND Rich Residential Properties

are both given a free ride.

[AP]

11. PoE, the problem with Prop 13 is the year a person buys a house..

...is the year they probably have the least income of all the years they live in that home up to retirement, provided they don't lose their jobs or aren't the poorest people in society (who have seen no wage growth for the past 20 years). So you're putting a huge burden on new home buyers, buying at the peak of valuations (presuming they always go up) in the year they can least afford it over their lifetime, and then, as they make more money, the burden diminishes, and shifts on to other home buyers.

Furthermore -- and here's the real problem with prop 13 -- corporations rarely sell property -- the triggering event for tax valuation. They either keep the same property for years or transfer control through methods other than an outright sale, like mergers or long leases.

So corporations pay a tiny fraction of the property tax burden, whereas as middle class homebuyers (especially the ones who have to move to follow jobs and don't have the resources to hold onto property and rent it, and meanwhile buy a new home with money that comes from somelplace other than the built-up equity in their previous home).

Read Lisa Duggan's Twilight of Equality. She talks about this. She says that Prop 13 started off as a good idea by progressive groups and then got hijacked by business interests who -- knowing that individuals bought and sold property more frequently than businesses -- turned it into a law that locked corporations into unfair and irrational low proptery taxes.

The bottom line is that prop 13 might be good for retired people, but those benefits are far outweighed by the huge shift in the tax burden off of corporations and on to regular working people. A better way would be to have revaluations at least of business property at regular intervals, give breaks to retired people, and figure out some way to tie residential property tax rates to the wealth of the homeowner (even if that means deciding that progressive income tax is going to have to go up a little so that residential property taxes go down).

[MADem]

2. A lot of these folks who are now complaining

...were waving their three hundred dollar checks in glee when chimpy made such a big deal out of his so-called tax cuts. It's called robbing Peter to pay Paul...the cash has to come from somewhere, and at the federal level, you can enjoy economies of scale. If you dismantle federal programs and rely on states to find their own way, you end up with massive taxes.

This is happening all over America. Something needs to be done, and soon.

[PurityOfEssence]

5. Social programs will be cut from sea to whining sea

We're in for some deeply ugly and selfish times in this country, and the full effect won't be felt for awhile. The monarchists--those who aren't totally blinded ideologues--know it's coming, but think that they can consolidate power much more before the truth sets in.

Missouri is about to simply get rid of Medicaid, and this is only an early example of the mugging of the weak.

As it happens slowly, too, people forget what life was like when there was a bit of a safety net. They forget what wages and benefits used to be like. They forget what the middle-class expectations used to be. At the same time, those holding their ground or moving up get colder and colder about their own pile, and thirst for ever more in a land of ridiculous expectations.

I have seen the future: it is mean and cheap.

A grating dismissiveness surfaced in the American character with the 1980 election, and it's only gotten worse since then. Selfishness is more than just a virtue now, it's taken as a sign of greatness.

Bad mood. Must go play with kids.

[GHOSTDANCER]

4. 12,000 dollars a year? That's probably more than/was his mortgage payment.

[lastliberalintexas]

7. Income based taxes are the solution

Sadly, very few legislators or public officials will push for them, even Democratic officials. A progressive income based tax interferes with a market economy less than any other form of taxation, accounts for one's ability to pay, is the easiest and cheapest to implement and administer, and even at fairly low rates can be used to raise far more revenue than other forms of taxations at equivalent rates. What's not to like?

Oh yeah, it also asks more of the well off. And how dare we ask the affluent to actually contribute to society?

[pfitz59]

8. WA state has a solution..this is the result.....

http://seattlepi.nwsource.com/visualart/203778_arttax15.html

Inspired by news stories about New York art collectors not paying their taxes, Washington state's Department of Revenue developed its own version of art appreciation.

-snip-

The poster boy of art-related tax avoidance is former Tyco International President Dennis Kozlowski. He was charged with deliberately avoiding paying tax by shipping art purchases out of state and then quietly moving them back to his Fifth Avenue apartment.

-end-

....more rich tax scofflaws!

[chlamor]

12. Property Taxes Questioned As Prices Zoom

Property Taxes Questioned As Prices Zoom


Monday May 23, 2005 3:46 AM

By ROBERT TANNER

AP National Writer

Soaring property taxes are a top worry in state legislatures across the country, where lawmakers are trying to appease disgruntled homeowners and, in some cases, courts that are demanding change in the system so schools are more equitably funded.

Some states are weighing plans to lower taxes. Others just want to keep them from rising too fast. Still others are aiming to substantially change the tax system and find another way to help pay for schools that closes the quality gap between wealthy and poor communities.

``People are facing being taxed out of their homes,'' said Ted Harris, a 69-year-old retiree living on the Nevada side of Lake Tahoe, whose taxes climbed from $2,200 in 1990 to $12,000 last year. ``Government simply swallows the money and finds lots of reasons to spend that money.''

From Texas to Illinois to Pennsylvania, lawmakers are weighing property tax caps, limits, exemptions and other ways to ease the burdens for homeowners - whose tax bills are the down slide of home values increasing. Proposals to change the system have become part of the gubernatorial campaigns in New Jersey and Virginia, the only states with governor's races this year.

http://www.guardian.co.uk/uslatest/story/0,1282,-5024704,00.html

[hector459]

13. What is needed is legislation on "gaming" the housing industry.

The rich are pushing the middle class out of the housing market by buying up homes (even before they are built) just to unload them at a much higher price---speculation by another name. Wealthy capitalists are buying up single family homes and condos as fast as they are put up, holding them and then selling them for 20-50% more than the original price. There should be some kind of regulation to stop this, especially for condos where the speculators are pricing elderly retirees right out of the market. Instead of selling these condos, many are being held until it becomes easier to rent them then to sell them, depriving the
many seniors of affordable, comfortable home ownershiip in their retirement years. My question is, when is a condo not a condo but a rental building. Where my parents live the condos have been bought up and rented to the point that about 60% of the units are rentals.