Home values, tax rates and something to think about

[Thump553]

That's not a problem attributable to either party, it's a sad fact of life when taxation is based upon property value and the owner has a limited fixed income.

The free market solution is so sad, too bad-the retiree homeowner didn't properly plan ahead, they must sell their home (to someone who can afford the taxes) and move on to a cheaper place.

The bleeding heart solution is such things as circuit breaker relief such as we have here. Basically this slows down the tax increases for the limited income elderly but all is caught up when they (or their estate) sells. Seemingly more humane, but this puts an increased burden on the rest of the tax payers in the interim-a burden that can be substantial if your community has lots of retirees.

Neither solution is perfect.

 

[BoberFett]

This is obviously untrue.

The amount of wealth one has is (basically) defined by the amount of value that one controls. On a national or global scale something of value must be created for wealth to increase, but it's hilariously false that someone's personal wealth could only increase through the new creation of value. When your mom gave you $20 for your birthday you became wealthier even though you didn't create value to get it. Every time a home price increases $1, the person who owns that home becomes wealthier.

If housing prices went up at exactly the rate of inflation you would be correct that they were not experiencing a net increase in wealth. Home prices over the years have most certainly not done so however.

/facepalm 2.0

When your mom gives you $20, that's simply a transfer of wealth. Nothing was created; It's a zero sum transaction. The wealth was created when she spent an hour bolting parts onto Hondas that earned her that $20.

If your house was the only house in the world that increased in value, then you got wealthier. If the value of all homes go up, the value of your home has the same buying power it did before. You're not wealthier, you just have a larger amount of fiat currency, the value of which is constantly in flux.

 

[Moonbeam]

In California we have prop 13 which limits the rate that your property taxes can go up. But I wonder what would happen if a Californian asked to have his house reappraised. I don't know because I don't interest myself in such things, but I think the appraised value of a California home is a fraction of its market value so it would seem to me that if you wanted a reappraisal they would only laugh.

 

[BoberFett]

The free market solution is so sad, too bad-the retiree homeowner didn't properly plan ahead, they must sell their home (to someone who can afford the taxes) and move on to a cheaper place.

Really? The free market solution includes a central bank with it's accompanying inflationary policy designed to do exactly what this thread is about? Inflationary policy is designed to not let people be "unproductive" with their time and/or money. It's forcing them to participate in the system. A retiree is by definition not participating in the system, which is why inflation is hard on them.

 

[fskimospy]

/facepalm 2.0

When your mom gives you $20, that's simply a transfer of wealth. Nothing was created; It's a zero sum transaction. The wealth was created when she spent an hour bolting parts onto Hondas that earned her that $20.

If your house was the only house in the world that increased in value, then you got wealthier. If the value of all homes go up, the value of your home has the same buying power it did before. You're not wealthier, you just have a larger amount of fiat currency, the value of which is constantly in flux.

/facepalm 3.0 lol. This is wrong on so many levels I don't even know where to start.

Yes, that was a transfer of wealth from your mom to you. She became less wealthy, you became more wealthy. Your original argument was that the increase in someone's home price did not represent an increase of wealth for that person. That is inescapably wrong. Of course it's a wealth transfer, but the argument was never that increasing home prices CREATED wealth, simply that they represented an increase in wealth for the person owning it. (that's what a wealth transfer is)

Second, the value of all homes do not go up equally, what gave you such a ridiculous idea?

Third, even if they did, wealth is not defined solely through home prices. If the average house buys 1 widget worth of other stuff last year and buys 2 widgets worth of stuff this year, everyone who owns a house has become wealthier even if their position vis a vis other home owners has not changed. They could sell their house and rent, they could live in an RV, they could buy a boat, etc, etc, and they could do this with more money left over than they could have the year before.

 

[Wreckem]

You want the services; the local government bodies needs to get the funds to pay for the services.

Add children into the school system, need to cover he cost of materials and teachers.

Upgrade parks; replace recreational equipment; need funds.
Road repairs and that traffic signal for the dangerous intersection; need funds

External costs go up; need to increase budget for those - need funds.

Local governments are usually not allowed to run deficits; so where doe the money come from. Taxes

Keep tax rate the same; lower the property values 10% and where does the government come up with the 12-15% needed to operate the following year.

Local governments cant run deficits, but they can take out millions and million in bonds. Texas has a serious problem at all levels of government. There is a huge structural deficit at the state level and municipal bond debt in Texas is astronomical. In the next 10-15 years there are likely to be serious problems for some municipalities in Texas. Texas is only behind NYC and DC in local debt and Texas has one of the highest total debt per capita out of any state in the country.

 

[Texashiker]

In the next 10-15 years there are likely to be serious problems for some municipalities in Texas.

I see no reason for Texas to be in a financial hole. We should be raking in billions of dollars through the lottery and oil taxes alone.

The Texas state government brings in lots of money. Take a look at the lottery. When the voters approved the lottery, the money was "supposed" to go towards the school system. During the last budget, the government said we were out of money for schools. Excuse me? How can Texas be out of money for schools when we pay a school tax, and then have the lottery?

I wonder if the Texas government is trying to break the state so the voters will approve a state income tax? I do not care how broke Texas is, I will NEVER vote for a state income tax. We can stop providing benefits to illegal immigrants before we get a state income tax.

 

[Thump553]

Really? The free market solution includes a central bank with it's accompanying inflationary policy designed to do exactly what this thread is about? Inflationary policy is designed to not let people be "unproductive" with their time and/or money. It's forcing them to participate in the system. A retiree is by definition not participating in the system, which is why inflation is hard on them.

I was referring to the present day real world and the free market solution, not some libertarian shiny metal utopia.

 

[jstern01]

I see no reason for Texas to be in a financial hole. We should be raking in billions of dollars through the lottery and oil taxes alone.

The Texas state government brings in lots of money. Take a look at the lottery. When the voters approved the lottery, the money was "supposed" to go towards the school system. During the last budget, the government said we were out of money for schools. Excuse me? How can Texas be out of money for schools when we pay a school tax, and then have the lottery?

I wonder if the Texas government is trying to break the state so the voters will approve a state income tax? I do not care how broke Texas is, I will NEVER vote for a state income tax. We can stop providing benefits to illegal immigrants before we get a state income tax.

You got bend over by that Lottery for school lie as well. In Florida the Legislators just took the exact amount the Lottery generate from the general budget and hand that over to the corporations in tax cuts and our schools are still rank around 49th in pupil funding in the nation.

We also have a state law call "Save Our Homes" which basically limits how much property taxes can go up to the rate of inflation. Now this is a sweet deal if like I build my home before the housing boom. While I was paying a lower tax rate then a similar value home that was brought in say 2001.

 

[Anarchist420]

Arbitrary Tax rates based upon Arbitrary valuation was precisely why tariffs were stupid also.

 

[BurnItDwn]

Sounds like he picked the wrong state to retire in.

In Illinois senior citizens can essentially apply for a frozen property tax rate ... sure, that means all the rest of us have to foot the bill ... But, it would be nice for the eventuality of retirement ...

 

[Texashiker]

Sounds like he picked the wrong state to retire in.

In Illinois senior citizens can essentially apply for a frozen property tax rate ... sure, that means all the rest of us have to foot the bill ... But, it would be nice for the eventuality of retirement ...

Nobody said the guy in the OP was elderly.

I would estimate the guys age at around 55 years old.

There are jobs out there where you can retire after 20, 25, 30, 35 years of service. From what I understood, the guy had worked for the telephone company for close to 30 years, and then retired.

 

[Fern]

-snip-
Maybe we look at home values backwards? Instead of wanting home prices to go up, maybe we should want home prices to go down?

Probably won't matter.

The county will just raise the tax rate. You're gonna pay anyway.

Fern

 

[piasabird]

I dont see taxes going down based on home prices going down. The assessors can change the modifier that determines the value to tax on without even anyone voting on it. At the same time some towns have laws which state you can not tare down older houses, only renovate them. Then you wonder why people move out of your town!

From my figure it looks like the value of my house has decreased by about 15%.

 

[Wreckem]

I see no reason for Texas to be in a financial hole. We should be raking in billions of dollars through the lottery and oil taxes alone.

The Texas state government brings in lots of money. Take a look at the lottery. When the voters approved the lottery, the money was "supposed" to go towards the school system. During the last budget, the government said we were out of money for schools. Excuse me? How can Texas be out of money for schools when we pay a school tax, and then have the lottery?

I wonder if the Texas government is trying to break the state so the voters will approve a state income tax? I do not care how broke Texas is, I will NEVER vote for a state income tax. We can stop providing benefits to illegal immigrants before we get a state income tax.

The lottery contributes very little to education. It has contriubed like $14billion to education during its entire existence. IE: Roughly $1billion a year. . Texas didnt even have enough money for baseline education funding because they in years past capped the main source of school funding and passed another tax that was supposed to make up for the shortfall. That other tax didnt even come close and they haven't bothered fixing that either.

Texas has a structural deficit problem(revenue can not keep up with baseline spending) and has for a while. The only reason it was only felt now is because local bond debt has been allowed to triple under Slick Rick's reign. Plus Obama's stimulus package helped Texas quite a bit during the 2009-2010 budget cycle.

Oh and Texas will more or less have a $3.5billion bill due to the Feds come 2013 due to not budgeting for medicaid payments for this budget cycle.

So yes, Texas is fucking broke.

Also the illegal alien argument is a red herring. Texas doesn't spend all that much on illegal aliens(well less than 1% of the budget). And do to fees, sales taxes, and property taxes being the revenue methods used by Texas, illegal aliens actually contribute quite a bit of money to said expenditures. You can do away with every last illegal alien in Texas, and Texas would still have roughly the same amount of structural deficit.