4d ago

Owing your home today is nearly impossible, but even if you did the ever increasing property taxes will bury you

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How big is his house? How much is it worth now?
How much did he pay for the land it sits on? Or did he inherit that?
Who does he think maintains road networks and all the other infrastructure he relies on?
- How big is his house? How much is it worth now?
  Property taxes are based on the assessed value of the land. So if you bought vacant land in the 1970s, improved it with a home, and then lived in it for the next 50 years, you'd see a piece of land that sold for several thousand dollars accrue to hundreds of thousands of dollars. If this guy is living in Texas, he's likely paying 1-2% of the assessed value of the home, which could easily be north of $2-4k/year. That's on land that was practically being given away half a century earlier.
  Who does he think maintains road networks and all the other infrastructure he relies on?
  The tax rate is fully disconnected from the cost of construction/maintenance. So if my house accrues from $50k to $200k over the course of ten years, I don't see 4x as much construction/maintenance of my local infrastructure. I just see my tax bill go up 4x while my potholes continue to go unfilled, my lines unburied, and my flood control underdeveloped.
  And that's setting aside the habit of municipal governments to invest in "improvements" (sports stadiums, convention centers, police surveillance that's focused around corporate properties, twelve lane highways that induce demand rather than improve traffick flow) that benefit private industry over public welfare. City and state officials serving larger and larger constituencies routinely become disconnected from lay voters and increasingly complicit in graft and other kickbacks, as elections revolve more around partisan affiliation than any actual domestic management agenda.
  There is a very real and meaningful disconnect between what politicians do at the municipal/state level and what residents actually demand at the retail level. If this guy was perched in a penthouse overlooking Cowboy's stadium, you could reasonably tell him to fuck off. But I guarantee he's not.
- allowed to take surplus tax,
  He's likely towing the Libertarian party line. We'd be fine without these taxes and all that government waste.
  When you start asking about public services, they start, slowly, carefully re-inventing taxes while downplaying corporate greed while putting themselves in a decision-making role where they get to decide what is right for everyone else.
  I'm sure he can hardly afford to live in his ancestral home. That SS he paid into all those years doesn't hit the same as a paycheck and might stop altogether soon. If you don't squirrel away your own retirement, you have to make concessions.
- While these are fair questions, I think it's a reasonable stance to take that you shouldn't literally get taxed out of your home if you come into poverty, which unfortunately can include Social Security recipients. I know we all need to pay taxes and contribute to society to the extent that we're reasonably able to, but I'm not so sure this is the best way to make it happen. For property beyond your primary residence, sure, but for your only home, I don't super like it.
  
  If your home is now worth millions, you're now rich and can afford the taxes. If you have no income, sell the house. If you want to live in it, do a reverse mortgage. If you want to pass on your house to your heirs, creating generational wealth while not paying your share of taxes now, fuck you, pay up.
  
  Assuming the house is worth millions is a faulty premise. Housing prices have exploded in the last 5-10 years, and that can mean that a home bought decades ago is worth many times its original value, causing a huge increase in property taxes, but still being in line with other regular homes. People who bought decades ago might have had the home appreciate to 10x the value of initial purchase, just to end up still in line with median home prices. Selling their house won't fix the tax rate, it'll just add some leftover mortgage value after they pay taxes on the profit from selling their massively value-inflated home. So now, instead of just paying property taxes, they pay comparable property taxes and the remainder of a new mortgage.
  I can agree on inheritance taxes, but I don't think it's super fair to heavily tax the owner a primary home of a reasonable value when they're not selling the home, giving it away, allocating it through inheritance, or otherwise transferring it. Maybe if it's a mansion, but a simple, normal home, maybe on some farm land? I don't see a problem with a family having the security of knowing that come hell or high water, they have a home they won't lose to anything but a natural disaster. We all need to contribute to society as it contributes to us, but I don't think that should come at the expense of security in basic essentials like housing.
  
  Like I said, do a reverse mortgage. You shouldn't get to lock in minuscule tax rates forever.
  
  And I just don't agree with that. I don't think we should have to pay property taxes at all on a reasonably priced primary residence, as set by local and national standards. Housing should be considered more of a right. We all need to contribute to taxes, yes, no dispute there, but I don't see this as a fair way to do so. Now, if it's an extra property or a particularly lavish home, yeah, tax the piss out of them. But taxing someone into homelessness should never happen because one of the state's core goals at least should be seeing that everyone's basic needs are met, and that includes housing.
  
  I agree it's reasonable for housing to be a right, but I disagree that home ownership should be a right.
  
  Okay, but how do you intend to accomplish that without costing the government more tax money? The most cost effective first step seems to me to be to just not tax a reasonable primary residence. Providing housing the inhabitants don't own costs someone money in building and maintaining that property, and since we're agreeing that housing should be a right, the only way I can see to guarantee that would be through government funding. And we probably should do that for some people, at least those most in need, but what's the sense in forcing people in poverty out of their home of decades just because they can't afford the property taxes, especially when that means pushing them into housing the government is actively paying for? Why is it that we can agree that everyone deserves housing, but we can't agree that they should be able to own that housing? There are other ways to raise that tax money, and the obvious choice is to increase taxes on those with a gross excess, not those who have managed to achieve stability after decades of work.
  
  It is mathematically impossible for someone in poverty to be unable to afford property taxes, because if their property valuation is so high that taxes are a burden, they're not poor. They can sell and pay rent in a more modest place. And yes, if the housing market happens to be whackadoodle and despite the sale proceeds they still can't afford rent for some reason, then they'd be eligible for subsidies.
  the obvious choice is to increase taxes on those with a gross excess
  Including people whose homes, through no hard work of their own, have ballooned to incredible value.
  A person who becomes a millionaire through property value increase is even less deserving of tax breaks than a business owner who makes a million dollars. At least the business owner probably put some work into earning the money.
  
  It is mathematically impossible for someone in poverty to be unable to afford property taxes, because if their property valuation is so high that taxes are a burden, they're not poor.
  For someone on Social Security, that home may be the only asset of any real worth they have. Social Security pays out an average of less than $2,000 a month. We can squabble over the technical definition of poverty, but look at the reality of it. A 70+ year old person on Social Security doesn't have good odds of getting hired anywhere that's gonna pay him worth a shit. They can't afford modern rent prices on that sort of check. Their only real shot at staying housed without a bunch of other retired and poverty stricken roommates is to have already paid off a home. Their financial situation is very likely to never significantly improve again for the rest of their lives.
  Now, I'll admit some states have very low property taxes that won't impact things too heavily, but that's not universally true. Look at New Jersey. They have a property tax rate of 1.86%. For that to constitute half of the average Social Security check, as mentioned in OP, that'd only require a home with a value of $640k, which sounds like a whole lot until you realize the median NJ home price is $540k. That could be a fairly run of the mill house that used to be rural and got caught in urban sprawl, spiking the value. That could be a modest home on a very little bit, not a lot, of farmable land. That could be a home in a rundown part of town that got gentrified over the last decades. That could be a few critical companies moving into the area and spiking home demand. That could just be our housing market doing what it's done for the last half a decade and just belligerently raising prices to ludicrous levels.
  I don't think that sounds like he's living it up. I think that on a $2,000/month budget, even if his home value excludes him from the technical definition of poverty, he's still gonna fucking feel like he's in poverty, especially if you fuck with his housing.
  And yes, if the housing market happens to be whackadoodle and despite the sale proceeds they still can't afford rent for some reason, then they'd be eligible for subsidies.
  Why not just leave them there in that case? What's the sense in forcing them out of their home just to push them into a new home that has almost the exact same problem? Now you're paying for subsidies and paying to manage the subsidy program instead of just... Not taxing them. It's counterproductive.
  Including people whose homes, through no hard work of their own, have ballooned to incredible value.
  Sure, but you seem to be drastically overestimating what it takes to get there. ALL home prices in America have ballooned to what should be considered incredible value, especially looking at modern build quality.
  A person who becomes a millionaire through property value increase is even less deserving of tax breaks than a business owner who makes a million dollars.
  And this is why I specifically said to cut the tax for reasonable homes. Dude in a McMansion can downsize. Dude in a slightly over average value home, though, can stay put and forego some taxes as far as I'm concerned. Set a threshold, but tie it to local property values. An average home should be fine. I might be willing to agree to double, but I'd have to think and research more. But beyond the value of a reasonable home, sure, levy taxes on the excess. Something like full property taxes on any value over some threshold.
  At least the business owner probably put some work into earning the money.
  Eh, I think business owners get too much credit. The vast majority of value created by all but the smallest companies is created by the workers. Most business owners depend on exploiting their workers. CEOs sure as HELL aren't working hundreds to thousands of times harder than their lowest paid employees. Someone that's self-employed, sure, busting their ass and earning it, but business owners on the whole, no.
  
  Their only real shot at staying housed without a bunch of other retired and poverty stricken roommates is to have already paid off a home. Their financial situation is very likely to never significantly improve again for the rest of their lives.
  I dunno why you think old people who didn't save enough for retirement should automatically get to live a good life by making the housing market worse for younger people. When you're poor, life sucks, that's how it is.
  What’s the sense in forcing them out of their home
  To free up housing stock and keep liquidity and supply in the housing market. To undo the crystallization we see in the market with old people clutching to their houses with all their might. To reduce the overwhelming cost of purchasing ones first home.
  Sometimes, when you can't afford something, you need to sell it and get a cheaper version. When that thing is a house, sometimes you need to move away. I see no reason why old people should be exempt from this.

330 comments