CA Proposition 47 Unintended Consequences

[zinfamous]

We've had this conversation before. He's fine telling 80 year olds Dean and Mildred, who bought their house in the middle of no where in 1960 for $15,000, who are long retired on fixed income, that they must pay $10,000 a year in property tax now because suburban sprawl and "luck" have had their area be developed into high end country estates. His solution to this is they can take a negative mortgage out on their house to pay the taxes, and then, rather than be able to will the house they paid for decades on to their kids/grandkids/whoever, it disappears.

Or said another way, as long as Gov can get their fingers into someones pie so the Gov can blow more money, jelly. You all need to realize when you're being Nick'd LOL

well, isn't that why homes are the worst investment imaginable, anyway? Isn't this the kind of the thing we should support under pure capitalism, letting the market decide value?

Your argument here is essentially supporting people for making "dumb" decisions in the past and continuing to make "dumb" decisions in the present long after the market has clearly dictated their "dumb" decision.

This is a weird line of argument coming from the conservative rah-rah-ultra capitalists in here. Essentially supporting welfare/government regulation to halt market forces doing exactly what you would normally want them to do.

I guess you guys really were in favor of the auto bailout. :hmm:

A couple of things that so-called "smart, educated" people are supposed to understand before dumping a pile of cash into something as horribly stupid as a house:

--it will almost never appreciate at more than inflation
--the value of your "investment" is universally determined by factors well outside of your control, specifically: the value of the community where your precious little money hole is now forever rooted. and here to the point: economic and technological advances that caused a bunch of dillholes to move into their part of the earth and forever inflate property values beyond a reasonable and sustainable measure, unpredictably, and some time after Dean and Martha bought their little castle in cow heaven. You can no more control the forces that raise the value, and therefore taxes on their property, than you can stop economic and technological process. Best solution to this would have been to go back and stop the techboom from happening. I don't know...maybe through sound government regulation?
--urban sprawl and development: sorry, imminent domain has always been a factor. you know this.

I mean...I know what you are saying and while it does make sense, it rewards the losing side of the risk factor that we always knew was an issue when thinking that dumping a fresh pile of money into a steaming pile of a generally bad idea was, improbably, a good idea.

I thought our policies were supposed to reward bold risk? Why do you think we should stop doing that?

 

[Zaap]

Lol!
Government allowed to tax people out of their homes (because paying your own mortgage vs. forever someone else's is baaaaaaaaad) is now a cornerstone of capitalism!

Lol!

You just can't make up some of the ridiculous horseshit spewed on this forum.

 

[werepossum]

Lol!
Government allowed to tax people out of their homes (because paying your own mortgage vs. forever someone else's is baaaaaaaaad) is now a cornerstone of capitalism!

Lol!

You just can't make up some of the ridiculous horseshit spewed on this forum.

Makes as much sense as claiming that the people whose homes are worth $1.5 million because of decades of appreciation are wealthy and therefore oppressing those poor people who want to buy that house now that it's worth $1.5 million.

 

[glenn1]

You're only assuming people have more wealth in this equasion because of an inflated valuation placed on their property.

It amazes me you don't see the irony that allowing the often artificially high valuation to drive up taxes makes it so you're not benefiting anyone of lower and middle class who can't afford that property or tax any more than someone being kicked out of it who lived there for 30 years could either.

You're by default allowing what would be mostly wealthier people to take poorer people's homes (the pretense that its poorer people buying houses at jacked up rates and paying the higher taxes is so blatantly assurd its comical) but hey... anything to feed the government beast.

If you ever wanted to see in action the thinking behind Kelo v. New London, just look at Eskimospy's posts. Only real difference is that instead of using eminent domain to take the house of older people who don't "deserve" their house to give it to rich folks who can use it better, he wants to use property taxes instead to do the same thing.

 

[Moonbeam]

Gotcha. Old people want more money to give away to their kids so everyone else should pay a greater share of the cost of government.

That is prop 13 in a nutshell. Thank you for at least owning up to the real motivation.

All those 'everyone else's' can fucking move where life is cheaper and when they get old they can tell everybody else to fuck off too. And I don't know if you noticed but most people's kids are fucked and will never earn what their parents did. They will never have shit without inheritance.

 

[Subyman]

Old people are attached to place. They have social support networks and families etc. They belong. You don't seem to care, thinking only about the money they would get if they sell. You do so because you ate footloose and fancy free and have no roots anywhere. You are not normal. Most of the people on earth are rooted in places. I think your attitude is rather cavalier. Attachment to place is a form of the sacred.

I do agree with this. My family has a 25 acre plot with an amazing craftsman style house on it. I grew up there and helped turn it into the place it is today. I couldn't imagine my family being forced out due to taxes and other people's demand for something our family built for years. It is a very hard issue, but I think eskimospy is being far to clinical with his assessment. Policy is not completely based on hard numbers. There is a balance to be struck.

Houses may be a commodity to some, but for others they are their life and their center within their community.

 

[glenn1]

I do agree with this. My family has a 25 acre plot with an amazing craftsman style house on it. I grew up there and helped turn it into the place it is today. I couldn't imagine my family being forced out due to taxes and other people's demand for something our family built for years. It is a very hard issue, but I think eskimospy is being far to clinical with his assessment. Policy is not completely based on hard numbers. There is a balance to be struck.

Houses may be a commodity to some, but for others they are their life and their center within their community.

So progressive 1%ers who otherwise complain about the evil rich and inequality suddenly find religion when it's their house and taxes they need to pay rather than someone like the Koch brothers. Must be that whole "collective action problem" thing again, the all-purpose excuse to exclude oneself from the target list for taxes.

 

[Subyman]

So progressive 1%ers who otherwise complain about the evil rich and inequality suddenly find religion when it's their house and taxes they need to pay rather than someone like the Koch brothers. Must be that whole "collective action problem" thing again, the all-purpose excuse to exclude oneself from the target list for taxes.

I'm a progressive?

 

[zinfamous]

Lol!
Government allowed to tax people out of their homes (because paying your own mortgage vs. forever someone else's is baaaaaaaaad) is now a cornerstone of capitalism!

Lol!

You just can't make up some of the ridiculous horseshit spewed on this forum.

Makes as much sense as claiming that the people whose homes are worth $1.5 million because of decades of appreciation are wealthy and therefore oppressing those poor people who want to buy that house now that it's worth $1.5 million.

Hey, not saying I agree with it--just don't know why you guys suddenly support big government regulating the march of pure capitalism? I thought we were supposed to embrace risk in our decision-making; and when forces we can't control turn even our metered decisions into poor decisions, that's just the greatest capitalism in the world! Because it is--doesn't matter if some of you don't want to accept that, but it's true.

 

[Greenman]

No, prop 13 is one of the more foolish ballot initiatives in history. Here's a list of just some of the bad outcomes from it:

1. It drastically inhibited labor mobility. You don't want to penalize someone for moving.

2. It drastically advantages people with assets over people with income. There's no economic incentive for this.

3. It undercut the ability of local governments to fund education which made them dependent on state revenues.

4. This led to prop 98, which was another incredibly dumb proposition.

5. It opened up a gaping loophole where businesses could avoid many of its effects, further distorting local revenue collection.

Thank God the California voters had sense enough to shut down an absurd tax system.

All of this so that people could 'stay in their homes'. What that actually means however, is 'tax advantages for people who have seen the value of their real estate assets massively increase'. It might be true that if you bought your house for $100k years ago that you can't afford the property taxes now that it's worth $1.5 million. You know what you get as a consolation prize for that? $1.4 million.

One of the dumbest propositions of all time.

So I'm forced to sell my property for $1.4 million because it has unrealized value. Then I take my money and do what? That 1.4 mil will get me exactly what I had, minus commissions and fees. The only option then is to move out of state. No one should ever be forced to sell their property because the state feels they're entitled to a piece of it's book value.
You'd be singing an entirely different tune if you were taxed out of you're home. California has money problems because we piss it away by the boat load, not because we don't take in enough.

 

[Ns1]

The only option then is to move out of state.

Or you could you know, rent a house since you have 1.4m in the bank.

 

[michal1980]

Or you could you know, rent a house since you have 1.4m in the bank.

That 1.4m you got from that poor person ;-)

 

[fskimospy]

Makes as much sense as claiming that the people whose homes are worth $1.5 million because of decades of appreciation are wealthy and therefore oppressing those poor people who want to buy that house now that it's worth $1.5 million.

I like how you're totally down with special government tax breaks so long as they go to the right people.

 

[fskimospy]

So I'm forced to sell my property for $1.4 million because it has unrealized value. Then I take my money and do what? That 1.4 mil will get me exactly what I had, minus commissions and fees. The only option then is to move out of state. No one should ever be forced to sell their property because the state feels they're entitled to a piece of it's book value.
You'd be singing an entirely different tune if you were taxed out of you're home. California has money problems because we piss it away by the boat load, not because we don't take in enough.

There are plenty of other options other than moving out of state. I lived in California for almost ten years and what you're saying is bullshit.

Everyone should pay the same property taxes on the same value of property. No special tax breaks for turtling.

 

[Subyman]

I like how you're totally down with special government tax breaks so long as they go to the right people.

Isn't that how any tax system works unless you are for a flat tax?

 

[fskimospy]

1. Do you honestly believe that CA would suddenly lower other taxes if it could increase property taxes?

2. You sidestepped the question about whether you're in favor of gentrification or not. It's usually frowned upon by people of your political alignment.

You could write that into the legislation, so sure. Guess we cleared that up.

As for gentrification, it's not possible to stop. I am for helping to mitigate its effects though.

 

[fskimospy]

Isn't that how any tax system works unless you are for a flat tax?

I'm just noting the irony in werepossum' sudden embrace of special tax breaks for people. Apparently he thinks you should get special tax breaks based on wealth, not income. The wealthier you are, the more free money and services you get from Uncle Sugar in werepossum-land.

I've always been fine with differential tax treatment, it's just that in this case the actual economic and fiscal effects of it are really bad. To harm a state as much as prop 13 has in order to defend the people who have become extremely wealthy from the tax consequences of their newly found wealth is... dumb.

 

[Subyman]

eskimospy, curious if you are against rent control?

 

[fskimospy]

eskimospy, curious if you are against rent control?

I am! If you use the search function I'm sure you can find several mentions of it. Rent control is not the answer to housing affordability concerns. Building more freaking houses is.

 

[Subyman]

I'm just noting the irony in werepossum' sudden embrace of special tax breaks for people. Apparently he thinks you should get special tax breaks based on wealth, not income. The wealthier you are, the more free money and services you get from Uncle Sugar in werepossum-land.

I've always been fine with differential tax treatment, it's just that in this case the actual economic and fiscal effects of it are really bad. To harm a state as much as prop 13 has in order to defend the people who have become extremely wealthy from the tax consequences of their newly found wealth is... dumb.

I can see the difference though. Wealth has already been taxed. Housing is a little stranger though since you do not claim capital gains on a house until you sell it. Property tax is my most hated tax. It is taxing something I've already paid income tax on and potentially sales tax on in perpetuity. I've got to pay the government for what I've already got. All the other taxes involve some sort of exchange of value, whereas property tax is assessed for simply existing.

I do see why people are more contentious with respect to those types of taxes especially if it takes away something they worked hard for or prices them out of something they have already purchased (weird.)

 

[Subyman]

I am! If you use the search function I'm sure you can find several mentions of it. Rent control is not the answer to housing affordability concerns. Building more freaking houses is.

That is consistent then. I'm not a hard liner on wanting rent control. I think giving people proper notice and time to adjust is all that is needed.

 

[fskimospy]

I can see the difference though. Wealth has already been taxed. Housing is a little stranger though since you do not claim capital gains on a house until you sell it. Property tax is my most hated tax. It is taxing something I've already paid income tax on and potentially sales tax on in perpetuity. I've got to pay the government for what I've already got. All the other taxes involve some sort of exchange of value, whereas property tax is assessed for simply existing.

I do see why people are more contentious with respect to those types of taxes especially if it takes away something they worked hard for or prices them out of something they have already purchased (weird.)

Yes but that is an argument against property taxes in general, it's not an argument for giving people special tax breaks to mitigate the 'damage' from them doubling, tripling, or quadrupling their investment.

Also, people rarely pay capital gains on their houses. The first half million is tax exempt for a couple, and that's if you aren't rolling any into a new residence. As with prop 13, the people who are affected by this are those who have made a truly massive amount of money on their investment.

 

[fskimospy]

That is consistent then. I'm not a hard liner on wanting rent control. I think giving people proper notice and time to adjust is all that is needed.

Sure, that is reasonable. I just simply don't believe in giving people special privileges just because they have lived somewhere longer. One person paying below market rent just moves that cost to other people in the building, either through higher rents, cost shaving by the landlord, etc.

Just like with prop 13, rent control is great if you are covered by it, but it's screwing everyone else who isn't.

 

[bradly1101]

further proof liberals don't care about crime.

Thank goodness the right is doing everything they can to fight crime by helping to end poverty and getting people into rehab. instead of prison.

 

[Moonbeam]

Yes but that is an argument against property taxes in general, it's not an argument for giving people special tax breaks to mitigate the 'damage' from them doubling, tripling, or quadrupling their investment.

Also, people rarely pay capital gains on their houses. The first half million is tax exempt for a couple, and that's if you aren't rolling any into a new residence. As with prop 13, the people who are affected by this are those who have made a truly massive amount of money on their investment.

Buying a home is not an investment. The government used to give people land to settle. I want all land returned to the Indians from whom we stole it. How can somebody sell or rent what was stolen.