Then you would be guessing wrong.
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Except that increasingly so, local governments in California and some other states are becoming “pension plans with a sideline of occasional civic services” and the desire to pay taxes toward that end is gradually evaporating.
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A-yup. Every proposed vote on a new property tax template is going to be preceded by a long series of articles and stories about “here’s how to figure out whether YOU will pay more or less”. And every voter will examine that very carefully.
My guess would be that the super rich, who can afford the taxes and who buy/sell houses with some frequency, would not have a problem with ashcanning Prop 13. It’s the middle and upper middle class who would see themselves in the gunsights and vote nearly unanimously to keep it in place.
I can’t speak for California, since I’m way on over here, but I have no problem with those who serve the public having a pension. We should all have pensions, actually. Pensions are more likely to be shielded from market variances, down turns, and events such as the enron scandal. Teachers, EMS, firemen, and (although lately, not as much - but in theory, at least) police help make the modern world livable and I see no reason not to make sure they are taken care of once they are retired.
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Neither do I, as long as they are run on a sound actuarial basis.
But
With the stroke of a pen, California Gov. Gray Davis signed legislation that gave prison guards, park rangers, Cal State professors and other state employees the kind of retirement security normally reserved for the wealthy.
More than 200,000 civil servants became eligible to retire at 55 — and in many cases collect more than half their highest salary for life. California Highway Patrol officers could retire at 50 and receive as much as 90% of their peak pay for as long as they lived.
Proponents sold the measure in 1999 with the promise that it would impose no new costs on California taxpayers. The state employees’ pension fund, they said, would grow fast enough to pay the bill in full.
They were off — by billions of dollars — and taxpayers will bear the consequences for decades to come.
This year, state employee pensions will cost taxpayers $5.4 billion, according to the Department of Finance. That’s more than the state will spend on environmental protection, fighting wildfires and the emergency
response to the drought combined.
And it’s more than 30 times what the state paid for retirement benefits in 2000, before the effects of the new pension law, SB 400, had kicked in, according to data from the California Public Employees’ Retirement System.
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The reason you don’t bake it in is because CA is notorious for tax creep. Having the reassessment at the time of ownership change is a very bright line. Having the reassessment every 10 years can easily become every 9 years or 5 years. Once you have a periodic reassessment instead of an ownership change reassessment the frequency is negotiable and guaranteed to change.
I love Prop 13. I have a foreclosure that I bought for super cheap in 08’. If it wasn’t for not getting my clock cleaned on property tax, I wouldn’t be here. Being a former resident in Loudoun County, Virginia, where they would keep voting on bond issue after bond issue, that had a direct affect on property taxes. People were getting taxed right out of their homes. Family farms that had been in the same family since before George Washington were going away and being developed into McMansion burbs. I sold out and left.
Prop 13 did get modified. We get to pay Mello-Roos fees on schools, parks and libraries. Since I have no children, even at the low, low, low tax that I pay, still am a net contributor to the common tax pool. Alas, they do make up for the prop 13, in that if buying something that’s not food, it’s still about ten percent added to the bill. There are fees for just about everything, and the fuel costs are artificially high here, thanks to the requirement that all gasoline has to be refined in state. Utilities are high here as well, and they really charge a lot in a flat bill for properties that still have no water meter in place.
Still, on the whole, It’s nice to have the property tax locked into a flat rate, as if it were. It does make up for all the other annoyances of living in California. Believe it or not, there are still affordable places other then LA, San Francisco, or the Bay Area in California. This is almost a separate country then just a state.
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Homeowner, but not in CA. We’re reassessed every year, and it looks like it’s gone up 25% in the <4 years we’ve owned it. Which is fair enough, because if I believe the housing market, our equity has gone up similarly.
I don’t object to property tax at all. I just think it needs to be acknowledged that it is a wealth tax - and that’s okay - I think a wealth tax is a fair idea.
I suspect you’re right. I mentioned upthread somewhere the idea the LibDems floated in the UK of replacing Council Tax (a kind of half-arsed property tax) with a local income tax, and that faced the same sort of objections.
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If I were in charge, I’d run property taxes on the same principle as claiming races at your local horse track. You familiar with the concept?
Each year, you get to declare your home’s value at any amount you want it to be, and you get to pay taxes on just that value.
However, if anyone comes to you within say 30 days, with a valid cashier’s check for that valuation, you must accept that offer and sell your house.
Utterly simple, utterly fair, and likely to increase tax revenues into the deal.
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I’d prefer that all of us had the ability to retire early and with dignity. These are public servants, and I have little problem with these sorts of compensation packages. I’d guess part of the problem rests with more than just the fact that they get such a deal.
I guess I don’t believe that just the wealthy deserve security? There seems to be a funding/revenue problem, and that’s something all states have been struggling with since the recession.
Thanks for the link, BTW. I’ll read it when I get a moment to wade into it.
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I quite agree that if all voters had a secure retirement plan, they would be more inclined to tax themselves more to ensure a comfortable retirement for public employees.
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If we all could retire early (if we wanted, of course), that would certainly help unemployment at the incoming end of the job market, yeah? Imagine how many jobs would be freed up for new workers just coming into the labor force, if those in their 50s could retire and actually do something that isn’t making wealth for someone else. And in your 50s you tend to still be healthy enough to enjoy life.
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I pay property tax and grew up in CA, though will likely never move back. Prop. 13 was a horrible solution to a real problem and I see it as another Prop. 8 (or Brexit) style failure of the dangers of direct democracy making harmful, poorly informed decisions over policy matters that shouldn’t be decided by simple majorities of the population.
One side to it that I haven’t seen mentioned, but which is a major reason it’s toxic is that it applies equally to corporate properties and private homeowners. It amounts to yet another state tax break to many of the larger businesses in the state, many of whom have property that’s not likely be fairly taxed ever. It’s a corporate tax break with a bit of unfairly apportioned tax relief to some homeowners designed to get homeowners to fight to protect corporate interests.
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What about middle-class, middle-aged people who can’t keep up with the tax burden in their newly trendy neighborhood? They should be forced to move? This is a real world scenario in places like Mountain View without Prop 13. They don’t wan to “cash out” and move. The supposed “pile of money” they are living in is their home, and the gains are on paper only. It’s NOT income.
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Easy. If I sell my business, I don’t NEED a new one. If I sell a diamond, I don’t NEED a new one. If I sell my house, I DO need to find another shelter, and in the case of California, which is the original topic, that shelter, rented or owned, is far more expensive to acquire than what I left.
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There’s a lot of ways this cat is skinned. In NJ there’s no reassessment at sale, but there’s supposed to be citywide revaluations every 10 years, or whenever the ratio of assessed value to true value falls below 85% (Jersey City is 28 years and 30%). Unfortunately there’s no watchdog to make sure it happens, and it takes lawsuits if a city doesn’t.
Does CA not use an “equalization factor” to adjust the actual tax for inflation and appreciation? Technically our taxes are 7%, but in reality they’re 1/3 of that.
I think you’d need a clause that you can reject the offer by raising your value, essentially bidding against buyer till he rescinds. And probably require the offer to be assessment plus 10 or 20% to eliminate small variations. Otherwise I like it. But I’d be in trouble, since I suspect my home would be more valuable as a teardown.
Which is exactly why a Prop 13 would protect you. Your home would not be taxed at its potential value to a developer.
That’s a market distortion, the value is it’s open market value unless you enter a covenant like farmland preservation that means you can’t sell it at market. It was an absurdity that there were surface parking lots all over Manhattan with low taxes because they were commercial property taxed by income not sales comparables. They were assets being warehoused till the price was right. Had they been taxed at true value that would not have been the case. Now every one of them has a tower.
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Then why not tax actual wealth, not some vaguely determined estimate of it? I’ve had opportunities to earn quite a lot more than I do but turned down the offers because I like my job, maybe my income tax should be on the salary I might have earned had I pursued those other opportunities?
Gellfex likes the idea of an annual tax on engagement rings because they represent wealth, but if diamond values have inflated rapidly over the years and a woman’s spouse dies and her limited income as a widow makes her unable to afford the tax, must she really hock the ring to cover the tax? How callous is that?
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If I had a reassement eveytime the assessed value fell below 85% I would have had multiple assessments already and we’ve only been in the house for 6 years. We would be getting taxed out of our house.
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