Alternatives to Property Taxes

[kathy88]

Not sure how common it is but in Michigan we do homestead exemption - primary home doesn't pay school taxes on property. Commercial/Industry is not exempt. I'm in an area with a lot of 2nd homes primarily owned by Chicago people. My little area supplies over 50% of the school district budget.

We have a homestead exemption but it's just a small percentage, not the entire tax.

 

[erowe1]

I'm kind of drawn to Jefferson's argument here:
http://press-pubs.uchicago.edu/founders/documents/v1ch15s32.html

The property of this country is absolutely concentered in a very few hands, having revenues of from half a million of guineas a year downwards. These employ the flower of the country as servants, some of them having as many as 200 domestics, not labouring. They employ also a great number of manufacturers, and tradesmen, and lastly the class of labouring husbandmen. But after all these comes the most numerous of all the classes, that is, the poor who cannot find work. I asked myself what could be the reason that so many should be permitted to beg who are willing to work, in a country where there is a very considerable proportion of uncultivated lands? These lands are kept idle mostly for the aske of game. It should seem then that it must be because of the enormous wealth of the proprietors which places them above attention to the increase of their revenues by permitting these lands to be laboured. I am conscious that an equal division of property is impracticable. But the consequences of this enormous inequality producing so much misery to the bulk of mankind, legislators cannot invent too many devices for subdividing property, only taking care to let their subdivisions go hand in hand with the natural affections of the human mind. The descent of property of every kind therefore to all the children, or to all the brothers and sisters, or other relations in equal degree is a politic measure, and a practicable one. Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise. Whenever there is in any country, uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right.

 

[Christian Liberty]

I do. They hurt the elderly the most. People work their whole lives to pay off their homes andn ever actually own them. They are on fixed income and if they can't pay their taxes they lose their homes. It happens so much around here it's disgusting. A 1 percent sales tax would probably generate more revenue and everyone would have to contribute. Even the welfare queens and kings.

I'm against property taxes anyway. And maybe I'm just spiteful. Never, EVER discount that possibility with me.

I don't particularly care. The elderly are the ones living off social security that my generation is being forced to pay for, but will never ever get to reap the benefits of. The elderly are also the most influential in the political system. They are the primary ones voting for the BS that we have, and are the biggest obstacle to ending the nonsense war on marijuana (I support legalizing everything, of course, but cocaine and heroin legalization isn't actually going to happen anytime soon. Marijuana legalislation problably would if the elderly weren't so against it) and want to siphon off more and more taxpayer dollars for Israel. All the while pretending to be "Conservative."

Of course, Ron Paul is 77 years old, and there are plenty of elderly people that don't support the nonsense. I don't have any problem with people taking benefits that exist anyway. If for no other reason, taking money from Leviathan and getting away with it is a virtue. I am all for cutting taxes and spending, or even just cutting taxes and letting the fascist system die. But I see no reason why I should support making the tax system "More fair", ie, having the young people pay even more in taxes when the elderly are literally living off of theft right now, and supporting our reckless foreign policy, exc.

I'm struggling with the right way to word this post. Obviously individuals are not groups, and elderly people who do not support any of this are obviously not responsible for it (Although they are still living off redistribution unless they don't use SS). I'm more than happy to look at individuals individually. But while we're talking about broad groups, we have to look at majorities and other such unpleasant things. The elderly, as a group, want low taxes, high spending on entitlements (Ie, redistribution from my generation to theres) AND endless war in the Middle East. If somebody has to pay for it, shouldn't they?

 

[Zippyjuan]

Ideally, but that not being an option at this point I'm looking for a way to keep the revenue stream and have it not be funded in a discriminatory manner.

The revenue stream is the big reason why localities like the idea of property taxes vs other taxes like a sales tax- the provide a regular and steady stream of revenues reguardless of what the economy is doing. If the economy slows, income and sales tax revenues fall. If revenues fall below your expectations, you are forced to make cuts. If revenues move up and down, that makes budgeting for the future more difficult. You might hire new teachers this year but have to lay them off next year- which makes hiring and keeping good teachers difficult as well- they don't like the uncertainty either.

 

[Zippyjuan]

I do. They hurt the elderly the most. People work their whole lives to pay off their homes andn ever actually own them. They are on fixed income and if they can't pay their taxes they lose their homes. It happens so much around here it's disgusting. A 1 percent sales tax would probably generate more revenue and everyone would have to contribute. Even the welfare queens and kings.

One good thing about California was Proposition 7- back in the 1970's I think it was passed. It keeps property taxes from rising simply because your neighbor paid more for his home than you did. If your home was purchased a while back, your taxes are based on that price- not current selling prices as many areas do. This protects you more from having property taxes rise to beyond what you can afford. Only if the property is resold is the valuation basis of the home increased so if your neighbor pays twice the amount you did for your home, his taxes and not yours will be double.

 

[amy31416]

The revenue stream is the big reason why localities like the idea of property taxes vs other taxes like a sales tax- the provide a regular and steady stream of revenues reguardless of what the economy is doing. If the economy slows, income and sales tax revenues fall. If revenues fall below your expectations, you are forced to make cuts. If revenues move up and down, that makes budgeting for the future more difficult. You might hire new teachers this year but have to lay them off next year- which makes hiring and keeping good teachers difficult as well- they don't like the uncertainty either.

And yet it's not certain, nor is the income stream independent of the economy. We need to have government that is not insulated from the economy and it's own laws, whether that's crazy stuff the Federal Reserve does, or forcing people into Obamacare.

 

[mczerone]

Ideally, but that not being an option at this point I'm looking for a way to keep the revenue stream and have it not be funded in a discriminatory manner.

All taxes are discriminatory.

 

[Keith and stuff]

I do. They hurt the elderly the most. People work their whole lives to pay off their homes andn ever actually own them. They are on fixed income and if they can't pay their taxes they lose their homes. It happens so much around here it's disgusting. A 1 percent sales tax would probably generate more revenue and everyone would have to contribute. Even the welfare queens and kings.

Is your county allowed to do that? PA allows a city to create a local income tax of 2% to help paying for schools and town expenses. Is the rate that high where you live? PA allows the income tax rate to be even higher in home rule cities. Maybe get your area changed to home rule? That could be a way to offer relief for the elderly because it is designed to only punish people that work for a living.

The main problem with this method of fixing, is it often does fix anything and axes end up being higher overall, a few years down the line. NJ used to have the highest property taxes in the US. It created a personal income tax and s general sales tax. It still has the highest property taxes. Creating new tax streams didn't work.

http://taxes.about.com/od/statetaxes/a/City-Income-Taxes.htm

 

[kpitcher]

Can you describe how this works and what qualifies/disqualifies a homeowner? The info on the 'net is a bit confusing.

The primary residence - which you have to declare.. you only get one (even if married), have to spend the most time here, the official record on file for driver's license, etc - is considered the homestead. The school tax is 100% avoided for any homestead property. Although you still get hit with the other taxes (Voted on millages, some state things) the biggest cost by far is school so it is nice to get rid of that. Although as a commercial property owner also there is no way to avoid it then.

There are some problems like people from out of state claiming a local property as homestead, or finding creative ways to game the system. But counties have been more diligent on making sure people aren't cheating the system.

 

[jclay2]

With the level of student being produced today, I honestly think that our education system has turned into a gigantic glorified babysitting/indoctrination system. There is no learning to be had at any of these 40 hour a week prisons.

 

[LibertyRevolution]

I prefer a sales tax over a property tax or income tax.
I can always choose to buy less stuff, I can't choose to not have a roof over my head or have income...

My property tax is $6,000. My state income tax is another $5,000.
That is $11,000 a year they charge me for the privilege of living in this state.

This my friends is the reason I am going to move to TN, it will be like getting a $11,000 a year raise..

My state already charges 6.35% sales tax, so the 7%-9% in TN isn't that much worse.
The cost of goods is less, so it covers the difference anyways.

 

[Keith and stuff]

I prefer a sales tax over a property tax or income tax.
I can always choose to buy less stuff, I can't choose to not have a roof over my head or have income...

My property tax is $6,000. My state income tax is another $5,000.
That is $11,000 a year they charge me for the privilege of living in this state.

This my friends is the reason I am going to move to TN, it will be like getting a $11,000 a year raise..

My state already charges 6.35% sales tax, so the 7%-9% in TN isn't that much worse.
The cost of goods is less, so it covers the difference anyways.

Property taxes exist in TN and are highest in the Memphis area. Also, if you have kids, be careful where you live. Dozens of the schools in TN are very bad. The sales tax isn't 7% anywhere in TN. Though, yeah, if you think taxes suck where you live, I recommend moving. That's part of the reason I left Tennessee. I didn't like what were high taxes for me.

 

[jmdrake]

There is one private school in the county and it is run by fundy uber right wing whacko speaking in tongues "Christians."

Sounds like a free market opportunity for you!

The real question is, IMO, how to provide quality education that is not supported by any taxation and is yet affordable to all. I think that's what Ron is looking at with the "Ron Paul curriculum" and I like the idea regardless of the G.N. controversy.

I send my kids to private schools. We've help pay for other peoples kids. Some people show initiative, some don't. One thing I wish I could get more poor parents to take advantage of is free money from retailers. For instance, Kroger and Publix will let donate 4% of your purchases to the 501C3 organization of your choice. I designated our kids school. The way its set up it helps lower our tuition. Sure, it's a small amount. But if I could get enough people who didn't have school age kids to partner with us, tuition theoretically could be free. Other ideas include sell cell phone or internet usage through the school for a small commission. Some schools actually make stuff for sale. With 3-D printing a school could become a miniature manufacturing powerhouse. Or start a greenhouse and grow plants and flowers. It would be educational for the kids and could raise funds. The "send your kids to school for 12 years where they get no skills except test taking and sports so that they can go to college and hopefully get a job" model is seriously broken.

 

[Athan]

It is. If you can't pay because you have a down period of being out of work, you can lose your property you once paid for in full. You aren't really free if you are required to pay rent on your own land. We can switch to sales tax for the time being till private schools begin to saturate the market. Either way this is one of the most important taxes to remove right beside income taxes.

 

[TonySutton]

With computers built into everything today I would prefer to see a sales tax that is applied at different rates based on what it is. Things that are essential to life should be taxed at a very low rate. This would be basic clothing, real food, etc. Things that are less important would be taxed at a higher rate. A state could actually decide to have multiple levels.

My personal favorite is user fees. People who use roads should pay tolls that take care of the road. Fire fighters should be payed for either by insurance companies or directly by the community. The same goes for police and the courts. Water and sewer? People should pay the actual rate. If they did you may find they would conserve a hell of a lot more. Once you start installing user fees you will find people realize there are lots of things they can live without or with less.

 

[seraphson]

A large portion of our county taxes funds the school district. If the property taxes were eliminated, what would be some logical options to replace those revenues? A county sales tax? At least that way, everyone doing business in he county pays something. What other options are there?

Where can you found the division of funds for a county? Would it be the State or City/Town website?

No taxes. Return the education system back to private enterprise. It'll take care of itself.

Bingo. Naturally however there are some problems with this.
Very few if any of the people (including myself) don't even know what the cost is per child for public school in any given county. No clue. Why? Because it's mostly put into this giant tax funded slush fund and whatever comes up short I'm sure the Fed steps in and fuels the fire. This would be what Friedman mentions and what I call "Type IV" spending. Other people spending other peoples money. The most inefficient and ineffective way to spend money. The efficiency and responsibility of paying for your own schooling not only improves costs but competition amongst schools to have the better service and be monetarily rewarded for doing so. This competition may lower costs and improve the quality of service. Pretty much the exact opposite of the public version of schools. Now I'm not saying all public schools are terrible but schooling as a whole certainly has a lot more to gain through the methods mentioned here.

 

[jmdrake]

With computers built into everything today I would prefer to see a sales tax that is applied at different rates based on what it is. Things that are essential to life should be taxed at a very low rate. This would be basic clothing, real food, etc. Things that are less important would be taxed at a higher rate. A state could actually decide to have multiple levels.

My personal favorite is user fees. People who use roads should pay tolls that take care of the road. Fire fighters should be payed for either by insurance companies or directly by the community. The same goes for police and the courts. Water and sewer? People should pay the actual rate. If they did you may find they would conserve a hell of a lot more. Once you start installing user fees you will find people realize there are lots of things they can live without or with less.

Are doughnuts essential to life? Seriously, with the gubmits abject failure to restrict EBT payments to "life essential" things I don't see this as being viable.

As for the other stuff you mentioned, some object to the stories of firefighters watching homes burn because the home owner didn't pay the "user fee." I think the correct thing to do would be do whatever it took to save the home and then put a lien on the property. (And of course that depends on the owner. If he just wants to let the shack burn down, let it burn down). Courts are really self funded except for indigent criminals or those found innocent. If you sue someone you have to file a cost bond first. And convicts are assessed court costs.