Your "Answers to Various Questions" section could be its own post. Eloquent answers to questions I often face. If it were its own post, I would share it with anyone who has even the most remote interest in a land tax shift.
Do you know if the Gallup polling had other cross tabs? I’m curious how popular/not the property tax is amongst the demographically currently existing median republican voter. (Who I assume to skew older homeowners, but I’d need to look that up, been a while)
In my experience, politicians are more avatars of their constructs than agents in their own right, but perhaps the Vivek R’s, RDS, and Marjories Taylor Greene are just out there saying what comes to mind more than I give them credit for.
The results surprised even me. I would have expected that if we look at Republicans alone property tax would be much more hated, but, well, see for yourself:
Republicans:
2005:
- Federal income: 16
- Social security: 15
- State income: 16
- State sales: 14
- Local property: 35
2023:
- Federal income: 41
- Social security: 6
- State income: 12
- State sales: 7
- Local property: 32
Federal income tax grew as the most hated by +25 percentage points, and local property tax actually went DOWN as most hated by 3 percentage points, for a net -28 percentage point swing between property taxes and federal income taxes in the last two decades, solely among Republicans.
If we aggregate the three income taxes into "any income tax" we get this:
Fascinating, whelp time to update my priors on the electorate I suppose.
I’m still curious about the turn amongst some specific MAGA politicians, but maybe it’s just a general anti-tax taking point (VR talks about cutting income taxes in the same breath as killing the property tax)
Yeah, it's curious. I bet if we dig into state polling we'll find some interesting stories, but I think if you look at the heat coming from these grassroots uprisings, and compare that to what actually inevitably happens in the legislature, it make sense.
Also, if you look at the actual plans the property tax abolitionists put forward, they never have a real plan. They make very ambitious assumptions about "increased growth" and handwave the rest.
It's easy to get high polling numbers on "Low taxes, high city/county services!" as long as nobody looks behind the curtain.
This was great except it did not answer every single concern that I can possible think of. Very sad.
But seriously, very well done, you kind of got it all into one place, and in such an engaging way, it's impressive. I'm jealous. Funnily enough, before your Play-Doh example, I had been thinking of doing something similar with peanut butter (or regular butter) on toast. But then you did it so now I don't have to!
prop 13 has destroyed california. basic infrastructure isn’t maintained because there isn’t enough money to pay for it. one of the largest economies in the world, some of the most valuable land in the country, and the state is broke! backwards as hell and i’m glad to be out of that place
> Texans do not want to replace all property taxes with 20% state-imposed inflation on goods and services.
A one-time 20% increase in prices is not the same as 20% inflation. 20% inflation would mean a 20% increase *every year*. The former is not a big deal economically, people just don't like it emotionally. The latter would be much worse, but I can't see how it would be caused by an increase in sales tax.
Wouldn't a tax deferral incentivize widows to stay in family housing instead of downsizing similar to prop 13? Making that behavior painfully unaffordable might be the stick legislators need to legalize more housing options.
Is anyone else wondering why THAT 3 bedroom house without central AC & a chain link fence is FIFTEEN MILLION dollars???? I understand that it's New York City but still? I know of much newer & similar in room # houses on the coast of CA in wealthy areas that are only 1-4 million.
Ill-informed in regards to CA's Prop 13. Per-capita student expenditure has surpassed inflation in CA and rivals most other states. Prop 13 is the only thing keeping hundreds of thousands of middle-class residents and fixed-income residents in their homes over the past 25 years in CA. The decline in CA's public education system can more accurately be blamed on poor administration, a drastic decline in enrollment, and to a small degree, over-powerful teachers' unions.
> The decline in CA's public education system can more accurately be blamed on poor administration, a drastic decline in enrollment, and to a small degree, over-powerful teachers' unions.
I'm not actually sure what part of the piece you're referring to, because in the case of California, I didn't say a single word about the decline of it's public education system.
My chief critique was about the massively unequal taxation system. Do you think it's fair that side-by-side neighbors pay extremely unequal tax bills?
Thank you, Lars! Apologies if my comment was tangential.
Your reference was a pointed attack on how Prop 13 appears 40 years in. It does look wacky to outsiders, I concede. But, Yes, I do think that the disparity is preferable to the realistic imminent alternative, which is for all properties to skyrocket to a market-value tax rate. Many of our residential communities have dual-income millionaires living next to formerly-blue-collar Social Security recipients. While LVT may in theory balance rates and still allow some of the long-term population to remain, it's hard to imagine it not displacing a huge number of residents.
California is a one-armed person hanging off the side of a cliff, and LVT might be a hand reaching down to help, but...
(And I truly enjoyed and learned from the piece, this was my one area of disagreement.)
What about Texas' system of property tax deferral for seniors? Someone in my state who gets stuck in that exact same situation can stay in their house for the rest of their life and not pay a dime of extra property tax. The bill gets settled when they sell the house, or if they live out their lives without moving, the estate settles it.
Yes, that would help. Though a bit like a county's version of a reverse mortgage. An aspect to these homes is that they were a wealth stabilizer for the emerging middle-class. In any case it feels like the era of the abundant, affordable single-family home in urban CA, and urban America, is fast coming to an end. LVT might be the way, but if I'm understanding the rudiments, in an LVT schema, density will rise. I consider myself a progressive, but most progressive solutions seem to only imagine a reality owned by big-money interests in which the rest of us can only afford to be tenants. I appreciate your time and considerate answers. I swear I won't reply to any coming response. XD
I appreciate it Bill, we're all trying to figure our way out of this mess. Couple of thoughts here:
> LVT might be the way, but if I'm understanding the rudiments, in an LVT schema, density will rise.
Density *will* definitely rise, but it won't necessarily rise *everywhere*. The key place it will rise first is in urban downtown cores. If that's sufficient to meet demand, you would expect it to pull development pressure *off* of outlying areas.
> In any case it feels like the era of the abundant, affordable single-family home in urban CA, and urban America, is fast coming to an end.
Indeed. One of the problems is that the wave of automobile suburb expansion that started in the 1900's was effectively a sort of "second frontier", in which cheap productive land was available for the taking. The trouble is, that frontier closed around 2006, and ever since then prices have just been skyrocketing. America's challenge is that it is a frontier nation that no longer has a frontier -- first we had westward expansion, then the automobile, and now we're just stuck where we're at, and we've got hard choices to make.
I spoke about this a bit longer in this piece here:
> I consider myself a progressive, but most progressive solutions seem to only imagine a reality owned by big-money interests in which the rest of us can only afford to be tenants.
I share this frustration too. I get frustrated with the progressives who don't understand why people like single family suburban homes in the first place, but I likewise get frustrated with the ardent anti-tax conservatives in my own backyard that surround me that don't want to answer hard budgetary questions.
There's a phenomenon you might be interested in called "Gordon Tullock's transitional gains trap." I feel it describes our current situation quite well.
In any case, thanks very much for engaging, and best of luck.
A huge number of residents have already been displaced. I grew up in California. I would like to be close to my parents, but housing prices make that impossible. None of my High School friends live in state either. Every change in policy, tax or otherwise, helps some and hurts others. The idea that we should be taxing labor so heavily to keep people in houses that are bigger than their current needs seems to me to be unspeakably cruel.
Too bad I hadn't seen this when it was posted, oh well. First, the argument that abolishing property taxes will "cost" money is wrong and it's a straw man. That money is already being paid, by property owners, so there's no additional cost here. It just means the $81 billion has to come from some other funding mechanism.
The argument against property taxes, has nothing to do with seniors or anything. It's that if you have paid for your piece of land, with or without a building, it should be yours in perpetuity with no further expenditure of funds. That's not what we have today. Nobody "owns" anything, you pay a huge deposit and then you pay rent ("property tax") and if you don't pay the rent, you lose the property. It's just that simple.
The rest is merely a matter of adjusting various charges. Things that have a material presence, like say water,sewage are billed to you as the listed owner of the property. If you don't pay, then you get cut off, plain and simple.
Things like police and fire, and the roads are different. Now firefighters is easy, you don't pay, fine and if your house catches fire, they will stand by to make sure your neighbor's houses don't catch fire, but you will be left to deal with your own blaze. Just like it used to be, in the early days.
Now as to the other less tangible benefits, I don't, in the ten minutes I spent typing this have all the answers. Perhaps if you don't pay the road commission, they erect k-rails across your access point to the road with a guard to shoot you if you try to remove the rails, and so on.
I see no reason the non-property owners should not bear some portion of the costs via say federal/state income tax, because they garner all the same benefits of civilization as do the homeowners. They're not getting billed for sewer and water, so there's no harm done. There's no real change in disposable income for the homeowners, it's just that instead of getting one bill from the city/county/whatever they might get several bills.
The difference is that if someone wants to live like a hermit, and just eat what he can grow, he is free to do it. Under today's system, it's impossible. That's why property taxes need to be abolished.
I just discovered your Substack through Reddit, I am amazed.
I am part of a small party in my homeland with a lot of Georgist influence, these kinds of articles are so helpful when thinking and designing program.
Your are dead wrong about this and a propagandistic demagogue.
The old don't pay property taxes. They have had assessments caped at 3% for thirty years. Their property taxes are half what the young family in a house identical to their right next to them is.
Even when there is no law, assessments always trail home values. And 65+ get tons of tax breaks in every single state I've lived.
Property tax burdens fall on new (young) buyers who have to accept market rate assessments. I pay twice the property taxes on my home I just bought that my neighbors in their 70s.
Any property tax cut is going to help young families more then olds.
DeSantis has even made this clear and said he rejects any property tax relief bill that targets the elderly.
The place in the country with the highest property taxes in the Northeast, and they have the least affordable homes. This doesn't work.
And no, property taxes don't "pay for local schools and services". All school districts in every state get topped off by state funds to equalize, no matter how high your property taxes are. You basically taxing yourself for nothing. It's Civil Rights Law.
Your "Answers to Various Questions" section could be its own post. Eloquent answers to questions I often face. If it were its own post, I would share it with anyone who has even the most remote interest in a land tax shift.
You can click on any header and get a direct link to just that section!
https://progressandpoverty.substack.com/i/164752398/answers-to-various-objections
This piece is a great blend of research, elucidation and advocacy! The reworking of our property tax regime into LVT is so near and yet so far.
Do you know if the Gallup polling had other cross tabs? I’m curious how popular/not the property tax is amongst the demographically currently existing median republican voter. (Who I assume to skew older homeowners, but I’d need to look that up, been a while)
In my experience, politicians are more avatars of their constructs than agents in their own right, but perhaps the Vivek R’s, RDS, and Marjories Taylor Greene are just out there saying what comes to mind more than I give them credit for.
Interestingly enough, the article I linked includes a graph of party breakdown:
https://news.gallup.com/poll/505970/americans-views-federal-income-taxes-worsen.aspx?utm_source=chatgpt.com
Here's a direct link:
https://datawrapper.dwcdn.net/fer3C/5/#
The results surprised even me. I would have expected that if we look at Republicans alone property tax would be much more hated, but, well, see for yourself:
Republicans:
2005:
- Federal income: 16
- Social security: 15
- State income: 16
- State sales: 14
- Local property: 35
2023:
- Federal income: 41
- Social security: 6
- State income: 12
- State sales: 7
- Local property: 32
Federal income tax grew as the most hated by +25 percentage points, and local property tax actually went DOWN as most hated by 3 percentage points, for a net -28 percentage point swing between property taxes and federal income taxes in the last two decades, solely among Republicans.
If we aggregate the three income taxes into "any income tax" we get this:
Republicans:
2005:
- Any income: 47
- State sales: 14
- Local property: 35
2023:
- Any income: 59
- State sales: 7
- Local property: 32
Fascinating, whelp time to update my priors on the electorate I suppose.
I’m still curious about the turn amongst some specific MAGA politicians, but maybe it’s just a general anti-tax taking point (VR talks about cutting income taxes in the same breath as killing the property tax)
Yeah, it's curious. I bet if we dig into state polling we'll find some interesting stories, but I think if you look at the heat coming from these grassroots uprisings, and compare that to what actually inevitably happens in the legislature, it make sense.
Also, if you look at the actual plans the property tax abolitionists put forward, they never have a real plan. They make very ambitious assumptions about "increased growth" and handwave the rest.
It's easy to get high polling numbers on "Low taxes, high city/county services!" as long as nobody looks behind the curtain.
This was great except it did not answer every single concern that I can possible think of. Very sad.
But seriously, very well done, you kind of got it all into one place, and in such an engaging way, it's impressive. I'm jealous. Funnily enough, before your Play-Doh example, I had been thinking of doing something similar with peanut butter (or regular butter) on toast. But then you did it so now I don't have to!
Brilliant as always.
prop 13 has destroyed california. basic infrastructure isn’t maintained because there isn’t enough money to pay for it. one of the largest economies in the world, some of the most valuable land in the country, and the state is broke! backwards as hell and i’m glad to be out of that place
A lot of interesting information here. Thanks.
> Texans do not want to replace all property taxes with 20% state-imposed inflation on goods and services.
A one-time 20% increase in prices is not the same as 20% inflation. 20% inflation would mean a 20% increase *every year*. The former is not a big deal economically, people just don't like it emotionally. The latter would be much worse, but I can't see how it would be caused by an increase in sales tax.
You are technically correct. What I meant to say is it would be equivalent to a one-time 20% inflation in sale prices.
> The former is not a big deal economically, people just don't like it emotionally.
I dispute this assertion, but to each his own.
Wouldn't a tax deferral incentivize widows to stay in family housing instead of downsizing similar to prop 13? Making that behavior painfully unaffordable might be the stick legislators need to legalize more housing options.
Is anyone else wondering why THAT 3 bedroom house without central AC & a chain link fence is FIFTEEN MILLION dollars???? I understand that it's New York City but still? I know of much newer & similar in room # houses on the coast of CA in wealthy areas that are only 1-4 million.
Ill-informed in regards to CA's Prop 13. Per-capita student expenditure has surpassed inflation in CA and rivals most other states. Prop 13 is the only thing keeping hundreds of thousands of middle-class residents and fixed-income residents in their homes over the past 25 years in CA. The decline in CA's public education system can more accurately be blamed on poor administration, a drastic decline in enrollment, and to a small degree, over-powerful teachers' unions.
Hi Bill! Thanks for your comment.
> The decline in CA's public education system can more accurately be blamed on poor administration, a drastic decline in enrollment, and to a small degree, over-powerful teachers' unions.
I'm not actually sure what part of the piece you're referring to, because in the case of California, I didn't say a single word about the decline of it's public education system.
My chief critique was about the massively unequal taxation system. Do you think it's fair that side-by-side neighbors pay extremely unequal tax bills?
Thank you, Lars! Apologies if my comment was tangential.
Your reference was a pointed attack on how Prop 13 appears 40 years in. It does look wacky to outsiders, I concede. But, Yes, I do think that the disparity is preferable to the realistic imminent alternative, which is for all properties to skyrocket to a market-value tax rate. Many of our residential communities have dual-income millionaires living next to formerly-blue-collar Social Security recipients. While LVT may in theory balance rates and still allow some of the long-term population to remain, it's hard to imagine it not displacing a huge number of residents.
California is a one-armed person hanging off the side of a cliff, and LVT might be a hand reaching down to help, but...
(And I truly enjoyed and learned from the piece, this was my one area of disagreement.)
Appreciate it, Bill!
What about Texas' system of property tax deferral for seniors? Someone in my state who gets stuck in that exact same situation can stay in their house for the rest of their life and not pay a dime of extra property tax. The bill gets settled when they sell the house, or if they live out their lives without moving, the estate settles it.
Yes, that would help. Though a bit like a county's version of a reverse mortgage. An aspect to these homes is that they were a wealth stabilizer for the emerging middle-class. In any case it feels like the era of the abundant, affordable single-family home in urban CA, and urban America, is fast coming to an end. LVT might be the way, but if I'm understanding the rudiments, in an LVT schema, density will rise. I consider myself a progressive, but most progressive solutions seem to only imagine a reality owned by big-money interests in which the rest of us can only afford to be tenants. I appreciate your time and considerate answers. I swear I won't reply to any coming response. XD
I appreciate it Bill, we're all trying to figure our way out of this mess. Couple of thoughts here:
> LVT might be the way, but if I'm understanding the rudiments, in an LVT schema, density will rise.
Density *will* definitely rise, but it won't necessarily rise *everywhere*. The key place it will rise first is in urban downtown cores. If that's sufficient to meet demand, you would expect it to pull development pressure *off* of outlying areas.
> In any case it feels like the era of the abundant, affordable single-family home in urban CA, and urban America, is fast coming to an end.
Indeed. One of the problems is that the wave of automobile suburb expansion that started in the 1900's was effectively a sort of "second frontier", in which cheap productive land was available for the taking. The trouble is, that frontier closed around 2006, and ever since then prices have just been skyrocketing. America's challenge is that it is a frontier nation that no longer has a frontier -- first we had westward expansion, then the automobile, and now we're just stuck where we're at, and we've got hard choices to make.
I spoke about this a bit longer in this piece here:
https://progressandpoverty.substack.com/p/why-georgists-use-the-mark
> I consider myself a progressive, but most progressive solutions seem to only imagine a reality owned by big-money interests in which the rest of us can only afford to be tenants.
I share this frustration too. I get frustrated with the progressives who don't understand why people like single family suburban homes in the first place, but I likewise get frustrated with the ardent anti-tax conservatives in my own backyard that surround me that don't want to answer hard budgetary questions.
There's a phenomenon you might be interested in called "Gordon Tullock's transitional gains trap." I feel it describes our current situation quite well.
In any case, thanks very much for engaging, and best of luck.
A huge number of residents have already been displaced. I grew up in California. I would like to be close to my parents, but housing prices make that impossible. None of my High School friends live in state either. Every change in policy, tax or otherwise, helps some and hurts others. The idea that we should be taxing labor so heavily to keep people in houses that are bigger than their current needs seems to me to be unspeakably cruel.
I have a better solution. Remove property taxes and replace it with nothing.
Nothing segregates like property taxes
Too bad I hadn't seen this when it was posted, oh well. First, the argument that abolishing property taxes will "cost" money is wrong and it's a straw man. That money is already being paid, by property owners, so there's no additional cost here. It just means the $81 billion has to come from some other funding mechanism.
The argument against property taxes, has nothing to do with seniors or anything. It's that if you have paid for your piece of land, with or without a building, it should be yours in perpetuity with no further expenditure of funds. That's not what we have today. Nobody "owns" anything, you pay a huge deposit and then you pay rent ("property tax") and if you don't pay the rent, you lose the property. It's just that simple.
The rest is merely a matter of adjusting various charges. Things that have a material presence, like say water,sewage are billed to you as the listed owner of the property. If you don't pay, then you get cut off, plain and simple.
Things like police and fire, and the roads are different. Now firefighters is easy, you don't pay, fine and if your house catches fire, they will stand by to make sure your neighbor's houses don't catch fire, but you will be left to deal with your own blaze. Just like it used to be, in the early days.
Now as to the other less tangible benefits, I don't, in the ten minutes I spent typing this have all the answers. Perhaps if you don't pay the road commission, they erect k-rails across your access point to the road with a guard to shoot you if you try to remove the rails, and so on.
I see no reason the non-property owners should not bear some portion of the costs via say federal/state income tax, because they garner all the same benefits of civilization as do the homeowners. They're not getting billed for sewer and water, so there's no harm done. There's no real change in disposable income for the homeowners, it's just that instead of getting one bill from the city/county/whatever they might get several bills.
The difference is that if someone wants to live like a hermit, and just eat what he can grow, he is free to do it. Under today's system, it's impossible. That's why property taxes need to be abolished.
I just discovered your Substack through Reddit, I am amazed.
I am part of a small party in my homeland with a lot of Georgist influence, these kinds of articles are so helpful when thinking and designing program.
Which country? Please reach out to me at lars@landeconomics.org and let's talk!
I just dropped an email with an introduction. Let's definitely talk!
Your are dead wrong about this and a propagandistic demagogue.
The old don't pay property taxes. They have had assessments caped at 3% for thirty years. Their property taxes are half what the young family in a house identical to their right next to them is.
Even when there is no law, assessments always trail home values. And 65+ get tons of tax breaks in every single state I've lived.
Property tax burdens fall on new (young) buyers who have to accept market rate assessments. I pay twice the property taxes on my home I just bought that my neighbors in their 70s.
Any property tax cut is going to help young families more then olds.
DeSantis has even made this clear and said he rejects any property tax relief bill that targets the elderly.
The place in the country with the highest property taxes in the Northeast, and they have the least affordable homes. This doesn't work.
And no, property taxes don't "pay for local schools and services". All school districts in every state get topped off by state funds to equalize, no matter how high your property taxes are. You basically taxing yourself for nothing. It's Civil Rights Law.
https://i0.wp.com/conduitstreet.mdcounties.org/wp-content/uploads/2016/04/screenshot-2016-04-26-10-42-31.png?fit=1317%2C838&ssl=1
But yes, channel all your efforts into making sure sales taxes get cut instead of property taxes. Consumer, never own. That's what young people want.