Bismarck, ND · Member since 2011 · 142 posts · 16 votes
In North Dakota, there is a measure that is trying to abolish property taxes and I was just curious as to what everybody's thoughts are regarding this topic.
Im against against it because its a very poorly worded measure and it leaves out how they are going to replace the lost revenue. They think they can replace it though income and tobacco tax (even though it wouldn't come close) but the real reason the proponents of Measure 2 want this done is there is an abundance of tax revenue from the Oil that is being pumped out of western North Dakota (which isn't going to last forever).
Has anybody seen where abolishing property taxes actually worked out? It would save me a huge chunk of change every year and the home values would take an immediate boost but I really feel like the funding for the roads, police department, fire department, and schools isn't something to mess with.
Investor · Fort Worth, TX · Member since 2011 · 1k+ posts · 450 votes
14y
I know this probably goes against the major grain here, but I think propety taxes are probably one of the best forms of taxes. Even better than income tax form a idealogical point of view (mine at least).Those own more property and use more public services by operating the properties should pay more.
Nathan Emmert, sales tax is regressive. So while you may spend more than someone with a lower income, a poor person spends, by necessity a larger percentage of their income on sales taxed goods than you do. If you are a proponent of everone paying the same percentage of their income regardless of their income (not that you said you were) you should be against sales tax.
If you own 50 houses, and I own 2 houses, damn right you should pay more for maintenance of infrastructure.
Investor · San Ramon, CA · Member since 2011 · 1k+ posts · 569 votes
14y
Gov't is a 0 sum game... their expenses are either fixed or growing... they will get their income somewhere. I don't really care if it comes in the form of property tax, sales tax, income tax. Sure, I pay a disproportionate about in property tax because of my investing, but oh well. I also spend more money than someone with half my income, get taxed on twice as much income as someone with half my income.
In the end, I have no doubt they'll get what they need out of me.
Investor · Hampton Bays, NY · Member since 2009 · 907 posts · 258 votes
14y
New york city has a relatively low real estate tax because they get paid from the city tax if you live or work in the city. I have seen the real estate tax creeping up in the city. The government will get the money one way or the other.
If they eliminate the tax on real estate it will pop up as increased sales tax and or income tax and in time the reale state tax may reappear.
Or even worse the fed may print more money and devalue all the money we now have and earn.
We require a transparent simplified tax system and representatives who are responsive to the people not special interests to contain cost
Investor · Southlake, TX · Member since 2009 · 950 posts · 338 votes
14y
Their is a movement in Texas to abolish the property tax and the franchise tax (a poorly disguised state income tax for businesses) and replace with a broader sales tax. It hasn't taken hold yet but I think eventually it will make it to the front page of political debate.
Investor · Fort Worth, TX · Member since 2011 · 1k+ posts · 450 votes
14y
I know this probably goes against the major grain here, but I think propety taxes are probably one of the best forms of taxes. Even better than income tax form a idealogical point of view (mine at least).Those own more property and use more public services by operating the properties should pay more.
Nathan Emmert, sales tax is regressive. So while you may spend more than someone with a lower income, a poor person spends, by necessity a larger percentage of their income on sales taxed goods than you do. If you are a proponent of everone paying the same percentage of their income regardless of their income (not that you said you were) you should be against sales tax.
If you own 50 houses, and I own 2 houses, damn right you should pay more for maintenance of infrastructure.
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
14y
Brian Hoyt, I am a staunch conservative but I actually agree with you in principal. however I am all for lower taxes because I think the government is a very poor steward of my our money. - Ned
Investor · Fort Worth, TX · Member since 2011 · 1k+ posts · 450 votes
14y
Originally posted by Ned Carey:
Brian Hoyt, I am a staunch conservative but I actually agree with you in principal. however I am all for lower taxes because I think the government is a very poor steward of my our money. - Ned
I agree that government is, in most cases, a poor steward of our money. It is the unfortunate nature of the beast. How we are burdend by it should at least be as "fair" as possible - whatever fair is.
My boss says, "The only thing worse than government is no government at all." I don't know whether I agree with this statement or not, but it certainly provides a lot to think about...
Bismarck, ND · Member since 2011 · 142 posts · 16 votes
14y
My issue is that in North Dakota, property tax funds all the road construction, police department, fire department, and public school. Those aren't the entities that I want to be taking money away from.
The pro Measure 2 people say that we can make it up in increased income tax (there actually isn't a solution in the bill. It basically says that we will figure it out later. Just another reason why I couldn't vote for this bill if I wanted to.). The biggest problem with that is about half of the people pay income tax and everybody is getting the benefits. If it was more of a flat tax or if there was a nonsubjective formula I don't think people would care as much.
This all started because North Dakota is bringing in more money than Davey Crockett with all this oil.
Bismarck, ND · Member since 2011 · 142 posts · 16 votes
14y
Originally posted by Brian Hoyt:
Originally posted by Zachary Dosch:
This all started because North Dakota is bringing in more money than Davey Crockett with all this oil.
Alaska PAYS taxes to state residences that they collect from big oil. Maybe ND needs to make a move out of that playbook.
It may end up that way but its a little early for that.
I really can't wait to be in a position where I don't have to work my day job and pay the ungodly amount of taxes, ss, and medicare. Capital gains and a small amount of realized income sounds good to me.
Involved In Real Estate · Las Vegas, NV · Member since 2010 · 341 posts · 86 votes
14y
The problem with government is that they bare extremely short sighted. Nevada had a budget surplus for 3-4 years and instead of investing the coffers, they decided to give a one time refund to everyone. Fast forward a copule years, now they are in a huge budget deficit and requesting tax increases on everythingbfrom sales tax to property transfer tax.
Not that I get to control the govt, but keep property taxes for a rainy day and hopefully they can invest the taxes correctly.
Real Estate Investor · Los Angeles · Member since 2011 · 55 posts · 11 votes
14y
I can't believe a state would even consider abolishing property taxes because of oil revenue. Oil revenue is fleeting (because oil is fleeting). We're poised to see a complete end to fossil fuel extraction in our lifetime. What then? I think Andy Chu made a great point about Nevada. And Prop 13 was probably the stupidest thing anyone could have come up with.
This sounds like a terrible idea, even in a small place like ND. Here in California a lot of cities operate autonomously because of the property tax revenue that they generate. Beverly Hills is one example.
And Tod R. what are they going to increase sales tax to in Texas, 20 - 30 percent? They already don't have a personal income tax. Sounds like Ron Paul has them on the fast track to the flat tax.
Real Estate Investor · Los Angeles · Member since 2011 · 55 posts · 11 votes
14y
I almost forgot, North Dakota is one of the leaders in receiving federal aid. Shouldn't they look to become self-sufficient before trying to cut taxes?
Medford, MA · Member since 2012 · 163 posts · 36 votes
14y
I'm OK with property taxes, but I don't think they should increase when I upgrade my kitchen. I'm not using any more city services just because I improve my house. This factor of them can also lead to abuse by confusing the real purpose of permits, which should be to ensure safety.
Real Estate Investor · Springfield, MO · Member since 2012 · 39 posts · 14 votes
14y
What a great topic! I have long considered property taxes bad. They are a tax that just keeps taxing! Not only that, but in most places, it is possible to drive some one off property they have owned for many decades when property values increase. Renters have to move to other places in the city because property taxes go up, and thus landlord must raise rents. This feeds the gentrification loop.
I wonder if any of you landlords on here don't consider your property taxes when you figure your expenses? Sure, you probably set your rents at the rate you think the market will bear- but what about raising them on current tenets? When you decide whether or not to make an investment based on its potential profit? One way or another, your tenets end up having increased property taxes passed on to them in the form of increased rents. Even though the bill may come in your name, and you may be responsible to make sure it is paid.
On the other hand, I have had a hard time coming up with an alternative way to fund schools and fire departments and other things Zachary Dosch pointed out. But the more I have studied public education, the more I realize that the thing they need last is more money. What they really need is less bureaucracy. In order to make that happen, we need a complete overhaul of the system. I have some thoughts on that, but that is not the topic, so I won't go into it here.
Thomas Jefferson knew that consumption was the best for of taxation- (see http://duckduckgo.com/?q=thomas+jefferson+consumption+tax). In Jefferson's day, taxing imports was the perfect solution- the wealthier you were, the more you imported, and thus taxing imports taxed the consumption of luxuries. In our day, this is not true- the least expensive goods are often imported, and thus taxing imports would place a heavy burden upon the poorest in society.
So what do we do now? The best proposal I have seen is the Fair Tax. It is a consumption tax, but everyone receives a pre-bate on the tax up to the federal poverty level. As Brian Hoyt pointed out, without a pre-bate, sales/consumption tax are extremely regressive.
One criticism of it is that it shifts the burden to the middle class, because the poor pay no or very little tax (The very poor would actual come out ahead). The wealthier people are, the less of their income is spent on consumption Actually- this is a good thing- the wealthy don't spend all of their income, so they invest it back into the economy, where eventually someone spends it, and it is taxed. I can think of several ways to tweak this system, but in general, I think it a sound proposal. I am all ears if anyone has a better idea!
So, in short, I would love to see all income and property taxes eliminated. We would replace them with less government spending, and a consumption tax, coupled with a "pre-bate system". School district funding would be completely replaced with a new system and a new paradigm, though I won't elaborate more on this now.
As for the proposal in North Dakota- from what I have read here, it does not sound like it was thought out very well, and we don't yet have all of the reforms in place that we need to make it a practical reality.
Investor · Chattanooga, TN · Member since 2009 · 1k+ posts · 903 votes
14y
Use taxes are the best kind of tax, so I would be against eliminating them in favor of an income tax. When you consider how polarizing an income tax is, I think it becomes even more obvious.
I'm also curious why people are banging on Prop 13 in CA? Maybe they don't realize that it was sky rocketing assessments (that weren't tied to an increase in property values) in the first place that led to its passage among other things.
Real Estate Investor · Los Angeles · Member since 2011 · 55 posts · 11 votes
14y
My only disagreement with James Vann is about the idea of starving the beast. I don't think that's the answer to ending the massive bureaucracy. I think the answer is just eliminating it. I hear people say we can't just abolish government departments, but is that really much more difficult than cutting off tax revenue? These bureaucrats are like leeches or symbiotes and they will find somewhere to feed. I think the problem has to be taken on directly, rather than indirectly by cutting off tax revenues. I also think these people would claim that the property tax revenue wasn't going to them and that ALL OF IT went to necessities like roads, schools, policemen, etc. and those departments would get cut.
Real Estate Investor · Springfield, MO · Member since 2012 · 39 posts · 14 votes
14y
Mike Andrews Perhaps I was misunderstood? I agree with you 100%- we need to take on massive government reform by abolishing many government agencies. Many others should be reduced in size and combined.
Many times throughout history we have eliminated various government agencies. We just seem to create more :( One of the problems we have is that it is very difficult to get some one to see that an agency or function of the government is unnecessary when that is their livelihood. Bureaucrats will defend their pet agency with great zeal. We need a paradigm shift in this country.
Real Estate Investor · Los Angeles · Member since 2011 · 55 posts · 11 votes
14y
James Vann I think we are definitely on the same page. My only disagreement was about the way to accomplish that. I think that politicians should be more focused on eliminating the departments than on lowering taxes. Right now the ideaology seems to be, "reduce taxes, starve the beast, eliminate bureaucracy." I think it should be, "eliminate bureaucracy, balance budget, reduce taxes." We both want the same thing. I'm just saying (and I think you agree) that this ND idea is a bad one.
Clarksville, TN · Member since 2012 · 29 posts · 7 votes
14y
I support abolishing property taxes, because you don't really totally own your property even when the mortgage is paid off due to property taxes. I too support the FairTax.
Bismarck, ND · Member since 2011 · 142 posts · 16 votes
14y
Well, the other logical option would be to replace the property taxes with income taxes in which case you would go to jail rather than lose your home if you aren't current.
This is basically a win win for me because if it passes, it would save me a big chunk of change every year. If it doesn't, like I hope, the funding for the necessities in society won't be cut off.
I can't believe that Im actually in favor of a tax being Im going to write in Ron Paul this election but I feel better about this tax because I see every day what these taxes pay for. I would much rather get upset about what is going on in Washington being its the most corrupt organization in the history of civilization. I have zero faith in any of our politicians and our entire political system so I have no problem starving them as long as I have roads to drive on and somebody comes to put out the fire when my house is up in flames.
No question, major reform in all aspects is needed, but just because it isn't structured the right way isn't a good enough reason to throw the whole thing out. They money is going to have to come from somewhere.