Florida property tax

[MyGodWearsAHoodie]

So, I've looked into this proposal a little bit more and I'm starting to come around.  Here's what I'm thinking.

In general, this is a tax for the "haves" and doesn't help the "have nots".  I am skeptical of things like this, but in this particular case...

We have a unique problem here because our house values have gone up so fast that it's causing people to stay in their homes when they otherwise wouldn't.  I have an old lady neighbor who I grew up next to.  She bought her house for $39,000 and I believe, she was locked into those taxes.  Her husband is long dead and she should leave the house.  1) for her own benefit, but also 2) to free up that house for a family that needs it to join the neighborhood.  It doesn't make sense for an elderly woman to be living in a big house alone. 

But it doesn't make financial sense for her to leave.  In an ideal situation, she's sell and buy a cheaper place.  But she would then have to pay the taxes on a property that cost 300K, even in downsizing.  That freezes up the market.  No propery tax would eliminate that particular issue.

I do think it will cost house prices to go up and it will have downstream effects in other areas, but it might be worth it.  Housing down here has become a pretty major issue.  All of this stuff is a trade-off, but I'm starting to come on sides with this idea.

I agree with the problem.  Not the solution.  The problem is that if two people own identical houses and one person bought it last year for $300k and one bought it 50 years ago for $30k the one who recently bought a house is paying much more in taxes.  The solution is not to eliminate the tax and shift the burden to a regressive tax scheme like sales tax.  The solution is having periodic property assessments that taxes houses based on their relative value, not based on how recently they were sold. 

And it this "fix" will do very little to solve the housing problem and will as you admit  cause other down stream problems and will likely make houses more expensive not less expensive. And that is the real goal.  Benefit the haves while hurting the have nots while claiming that it helps everyone.   

Eliminating taxes will not solve the housing problem.  The first step is ending restrictive zoning that makes moderately prized moderate density housing possible.  In this country most housing is either low density suburban or high-density cities.  We need more communities zoned for one and two family  homes mixed with retail that have minimal setback requirements. 

[Phishfan]

I'm thinking we still have a misunderstanding or miscommunication of what this is. People are using terms like elimination of property tax, that is not what this is.  Also, our house values are assessed annually. A recently purchased home may be paying more in taxes but that is likely because of property upgrades made to boost the sale, not the purchase date.

Also don't understand Dave's scenario. I think the old lady just likes her house and memories. How is she stuck? Downsizing reduces her tax burden with or without the passage.

[MyGodWearsAHoodie]

I'm thinking we still have a misunderstanding or miscommunication of what this is. People are using terms like elimination of property tax, that is not what this is.  Also, our house values are assessed annually. A recently purchased home may be paying more in taxes but that is likely because of property upgrades made to boost the sale, not the purchase date.

Also don't understand Dave's scenario. I think the old lady just likes her house and memories. How is she stuck? Downsizing reduces her tax burden with or without the passage.

Florida caps the increase in assessed value at the lower of the CPI or 3% UNLESS THE HOUSE IS SOLD

This means if you purchased a house 50 years ago for $39,000 that a house could be assessed for tax purposes is $171k.  And that assumes the CPI has been 3% or more every single year, which it has not been.  However, that same house might be worth $400k because house prices have vastly outpaced the CPI  AND the CPI in some years has been significantly higher than 3%.

Let's say she sells her $400k house that is being tax as if it is a $160k house and buys a smaller house for $200k she would now be paying taxes on a $200k instead of taxes on $160.  But that would be a relatively minor tax implication.  The more significant tax implication for her would be she now needs to pay federal capital gain on $121k of her capital gains.  By not selling and letting her heirs sell the house she avoids the capital gains tax.  Which is why this law change would have almost zero effect on her decision to sell or not.  However, raising her taxes to a fair rate where she is paying taxes based on the house being worth $400k very well might prompt her to sell and move into a smaller house.

 

[pondwater]

So, I've looked into this proposal a little bit more and I'm starting to come around.  Here's what I'm thinking.

In general, this is a tax for the "haves" and doesn't help the "have nots".  I am skeptical of things like this, but in this particular case...

We have a unique problem here because our house values have gone up so fast that it's causing people to stay in their homes when they otherwise wouldn't.  I have an old lady neighbor who I grew up next to.  She bought her house for $39,000 and I believe, she was locked into those taxes.  Her husband is long dead and she should leave the house.  1) for her own benefit, but also 2) to free up that house for a family that needs it to join the neighborhood.  It doesn't make sense for an elderly woman to be living in a big house alone. 

But it doesn't make financial sense for her to leave.  In an ideal situation, she's sell and buy a cheaper place.  But she would then have to pay the taxes on a property that cost 300K, even in downsizing.  That freezes up the market.  No propery tax would eliminate that particular issue.

I do think it will cost house prices to go up and it will have downstream effects in other areas, but it might be worth it.  Housing down here has become a pretty major issue.  All of this stuff is a trade-off, but I'm starting to come on sides with this idea.

It's all a scam. Property tax being tied to the value of your home is about as stupid as the amount of a restaraunt tip being tied to the cost of your meal. Restaraunts should bake the cost of paying their employees into the cost of their menu items. Why is a tip on a $50 steak higher than a $10 sandwich if they both take the same amount of effort to bring to the table.

Likewise, if I live in a $250k home and my brother lives in a $750k home 2 mile away, why is he paying more to recieve the same benefits and services as I am? The answer is he shouldn't. Charging different amounts for the exact same police patrol, road maintenance, and fire protection is fundamentally wrong. Either they need to add to the sales tax or send everyone an equal bill for fees. 

[Spider-Dan]

By that logic, why should I pay more sales tax, or income tax, or any other sort of tax based on a percentage?  We should all just pay equal taxes, in flat dollars.

Of course, in practice that would mean:

a) the rich get a massive tax cut, while the poor are now required to hand over their entire income to the government (which would still be insufficient, landing them in jail for failure to pay taxes)
OR
b) our government would be drastically defunded, requiring the disbandment of nearly all government institutions, including police, fire, schools, the courts, and the military

[Sibster]

By that logic, why should I pay more sales tax, or income tax, or any other sort of tax based on a percentage?  We should all just pay equal taxes, in flat dollars.

Of course, in practice that would mean:

a) the rich get a massive tax cut, while the poor are now required to hand over their entire income to the government (which would still be insufficient, landing them in jail for failure to pay taxes)
OR
b) our government would be drastically defunded, requiring the disbandment of nearly all government institutions, including police, fire, schools, the courts, and the military

Because this is based on what you own, not what you make.   You shouldn't be paying taxes over and over again for things you own.   You've already paid taxes once to purchase them.

[Spider-Dan]

You don't build and maintain the roads that lead to your property.
You rely on law enforcement to protect your property; if not from individuals, then definitely from organized crime.
You rely on firefighters to safeguard your property; if not directly, then to keep one careless neighbor's house fire from incinerating your entire neighborhood.

So yeah, ongoing costs require ongoing taxes.  If you don't like the cost-benefit analysis of living in civilization (with the taxes that entails), then opt-out.  No one will attempt to tax you if you are living in the remote wilderness, free to experience Maximum Liberty away from the burdens of society.

[Sibster]

You don't build and maintain the roads that lead to your property.
You rely on law enforcement to protect your property; if not from individuals, then definitely from organized crime.
You rely on firefighters to safeguard your property; if not directly, then to keep one careless neighbor's house fire from incinerating your entire neighborhood.

So yeah, ongoing costs require ongoing taxes.  If you don't like the cost-benefit analysis of living in civilization (with the taxes that entails), then opt-out.  No one will attempt to tax you if you are living in the remote wilderness, free to experience Maximum Liberty away from the burdens of society.

And since those costs are the same, everyone should pay the same amount.  It should not be based on who owns what property or how much it's worth.   

[Spider-Dan]

And since those costs are the same, everyone should pay the same amount.  It should not be based on who owns what property or how much it's worth.

I'm glad that you have conceded that ongoing taxation is necessary to provide continuing funding.

As for your proposal that everyone should pay the same taxes in actual dollars, allow me to refer you to my previous comment:

Of course, in practice that would mean:

a) the rich get a massive tax cut, while the poor are now required to hand over their entire income to the government (which would still be insufficient, landing them in jail for failure to pay taxes)
OR
b) our government would be drastically defunded, requiring the disbandment of nearly all government institutions, including police, fire, schools, the courts, and the military

[Sibster]

I'm glad that you have conceded that ongoing taxation is necessary to provide continuing funding.

As for your proposal that everyone should pay the same taxes in actual dollars, allow me to refer you to my previous comment:

I'll go with option C.   Come up with some other way to pay the taxes.   Perhaps raise taxes on certain items like tobacco or alcohol.   Or raise the taxes on state lottery winnings.  Raise the tolls on toll roads.   There are all kinds of ways

[Spider-Dan]

If we are not talking about cutting funding (which is a separate argument from reallocating revenue generation), any change to the tax code necessarily means one of two things:

1) everyone still pays the same net amount in taxes, or
2) some people will pay more taxes, and some people will pay less

If it's the former, such discussion is pointless; a "change" where everyone still pays the same amount of taxes is a waste of everyone's time.
So if it's the latter - some people will pay more, some people will pay less - then please explain: under your proposal, who will be paying more and who will be paying less?

[Sibster]

If we are not talking about cutting funding (which is a separate argument from reallocating revenue generation), any change to the tax code necessarily means one of two things:

1) everyone still pays the same net amount in taxes, or
2) some people will pay more taxes, and some people will pay less

If it's the former, such discussion is pointless; a "change" where everyone still pays the same amount of taxes is a waste of everyone's time.
So if it's the latter - some people will pay more, some people will pay less - then please explain: under your proposal, who will be paying more and who will be paying less?

Depends on who's purchasing said goods/services.   If you're going to raise taxes on say, cigarettes and alcohol, those who buy will pay the taxes.   Obviously those are sold to rich and poor alike.   Same for toll roads as rich and poor drive on them.   It all depends on who buys more.

[MyGodWearsAHoodie]

Depends on who's purchasing said goods/services.   If you're going to raise taxes on say, cigarettes and alcohol, those who buy will pay the taxes.   Obviously those are sold to rich and poor alike.   Same for toll roads as rich and poor drive on them.   It all depends on who buys more.

I support raising taxes on cigarettes and alcohol because it can drive healthier behavior.  But you are not going to replace property taxes with that, not enough revenue.  Also it is no secret that the poor spend a larger percent of their income on such items because they have less income.

As for Republican's favorite hidden tax --- fees.  Those absolutely disproportionately cost the poor more.  A $3.50 dollar toll means that that a minimum wage employee  is going to be spending the first half hour of their working day paying for that portion of their commute.  While someone who makes $70 an hour will pay for it in a mere six minutes.  It can cost a McDonald's employee several shifts of pay to register their car in Flordia but less than an hour for an atty.   

[Sibster]

I support raising taxes on cigarettes and alcohol because it can drive healthier behavior.  But you are not going to replace property taxes with that, not enough revenue.  Also it is no secret that the poor spend a larger percent of their income on such items because they have less income.

As for Republican's favorite hidden tax --- fees.  Those absolutely disproportionately cost the poor more.  A $3.50 dollar toll means that that a minimum wage employee  is going to be spending the first half hour of their working day paying for that portion of their commute.  While someone who makes $70 an hour will pay for it in a mere six minutes.  It can cost a McDonald's employee several shifts of pay to register their car in Flordia but less than an hour for an atty.   

And whose fault is it that they are poor?   Not anyone's but themselves.   They need to realize that and cut back to the point where they can manage.