[Lightknight]

What about a wealthy person who buys a tremendous amount of land and has a bunch of very expensive houses on it and then technically rents them out to others? Or just one with a lot of land and expensive house.

Also, wouldn't this be a primary increase in the tax on the poor?

[JerryLove]

Originally Posted by Lightknight

What about a wealthy person who buys a tremendous amount of land and has a bunch of very expensive houses on it and then technically rents them out to others? Or just one with a lot of land and expensive house.

Someone with a signifigantly higher than average property value would pay a signifigantly higher than average percentage of the tax.

Also, wouldn't this be a primary increase in the tax on the poor?

No. At the end of the day there are only two differences between my system and the current one.

1) There's no need to adjust the tax structure each year to adjust for property values... that occurs automatically.

2) There's no longer a preference of older home-owners-vs-newer-home-owners on a state-wide basis (it will still prefer older home-owners in regions that have increased compared to the state at large). You pay a percentage of the total based on where in the scheme of things your hose exists regardless of how long you've owned it.

No one will see an increase caused by anything other than the state deciding to increase revenues from property taxes (or a mass reduction in the amount of properties in existance, that would do it too). But what we will cure are:

1) "accidental" tax increases caused by state-wide valuations.
2) Tax reductions to older-home-owners at the expense of newer ones when milliage is adjusted to accomidate for "1" above.

[tlj009]

Under my system, a rise/lowering in housing wouldn't create any change to revenue at all, eliminating the problem of government seeing an "accidental windfall" and spending it until there's unrest. If they need more money, they raise taxes. If they don't, they don't.

Equally important, it will prevent the entire added burden from appearing solely on new home owners.

It seems like your plan would have a problem in that a change to the tax would have to be voted on constantly. Whenever housing prices shoot up, along with prices of anything else, the cost of running the government would shoot up, but the income from taxes would remain the same. So the government would have to put an increase to taxes on the ballot.

If the vote is yes, then the government has enough money until prices go down, then they have a surplus. Now they can either vote to lower taxes thereby, keeping taxes at a minimum or just spend the money until prices go back up. I don't think they will ever lower taxes so the rates will remain at the all time high. If they do decide to lower them, then it is going to be a lot of voting going on.

If the vote is no, then the government will have to cut back on its programs until prices go back down. So politicians will be constantly saying that they need more mone and the people will be constantly saying no. And so even when more money is needed the answer will still be no.

[JerryLove]

It seems like your plan would have a problem in that a change to the tax would have to be voted on constantly. Whenever housing prices shoot up, along with prices of anything else, the cost of running the government would shoot up, but the income from taxes would remain the same. So the government would have to put an increase to taxes on the ballot.

Tax changes should be voted on.

You seem to assume that there's a 1:1 tie for housing costs and governmetal costs, that all said governmental costs should be born by property taxes, and that they should all be incurred upon recent homeowners (the current system).

If the vote is yes, then the government has enough money until prices go down, then they have a surplus. Now they can either vote to lower taxes thereby, keeping taxes at a minimum or just spend the money until prices go back up.

What they should actually do under my system is make a budget every year (which they already do) which includes "income from property taxes". You then divide that number by the number of properties and multiply each individual property by its assigned value to determine individual burden.

It's called "passing a buddget" and it's already done every year by every government including Florida.

I don't think they will ever lower taxes so the rates will remain at the all time high. If they do decide to lower them, then it is going to be a lot of voting going on.

But you cannot suppor that your thought is tied to reality. In fact, lowering property taxes is a priority in the state government right now.

The problem is that the property-tax issue will reappear every time there's a signifigant change in house valuations, requiring the tax structure to be redesigned... unless we switch to my system.

If the vote is no, then the government will have to cut back on its programs until prices go back down. So politicians will be constantly saying that they need more mone and the people will be constantly saying no. And so even when more money is needed the answer will still be no.

So, even though tax rates have been rising successfully, you think tax rates will suddenly be unable to rise? What do you feel will change going from millage to percentage that will suddenly make budgetary changes impossible?

[Bryan]

Originally Posted by tlj009

It seems like your plan would have a problem in that a change to the tax would have to be voted on constantly. Whenever housing prices shoot up, along with prices of anything else, the cost of running the government would shoot up, but the income from taxes would remain the same. So the government would have to put an increase to taxes on the ballot.

If the vote is yes, then the government has enough money until prices go down, then they have a surplus. Now they can either vote to lower taxes thereby, keeping taxes at a minimum or just spend the money until prices go back up. I don't think they will ever lower taxes so the rates will remain at the all time high. If they do decide to lower them, then it is going to be a lot of voting going on.

If the vote is no, then the government will have to cut back on its programs until prices go back down. So politicians will be constantly saying that they need more mone and the people will be constantly saying no. And so even when more money is needed the answer will still be no.

depending on the local government, not all local governments require voter approval to raise taxes.

[tlj009]

Tax changes should be voted on.

You seem to assume that there's a 1:1 tie for housing costs and governmetal costs, that all said governmental costs should be born by property taxes, and that they should all be incurred upon recent homeowners (the current system).

I am not assuming a 1:1 tie for housing costs and governmental costs. I am just saying that there is some kind of correlation. Anyway governmental costs are not born solely by property taxes and are not incurred solely upon recent homeowners. It may be far more accurate to say that some governmental projects are ... Since I am not in Florida, perhaps you can tell me what the property taxes fund. Water, sewer, fire protection, ???

What they should actually do under my system is make a budget every year (which they already do) which includes "income from property taxes". You then divide that number by the number of properties and multiply each individual property by its assigned value to determine individual burden.

It's called "passing a buddget" and it's already done every year by every government including Florida.

Yes, except I believe that property taxes are the primary funding for local government rather than the state governments. Local governments have a harder time sticking to a budget than the state. Still, it would depend entirely on what the money was used for whether or not your idea would work. If housing prices double over the course of a year, then I would think salaries would have to go up. Your plan could cause some problems depending on how drastic fluctuations are and how long until the next vote. With a fixed income that does not depend on market prices, a budget could, potentially become a lot harder to stick to, or even produce for that matter.

But you cannot suppor that your thought is tied to reality. In fact, lowering property taxes is a priority in the state government right now.

I didn't intend to support my thought. That is why I worded it so that everyone would know it was my thought on the subject. Anyway, it seems like all I hear is complaining about needing more money until the politicians run from reelection and then all of the sudden they support a tax reduction.

The problem is that the property-tax issue will reappear every time there's a signifigant change in house valuations, requiring the tax structure to be redesigned... unless we switch to my system.

Or maybe someone else could come up with a new system.

So, even though tax rates have been rising successfully, you think tax rates will suddenly be unable to rise? What do you feel will change going from millage to percentage that will suddenly make budgetary changes impossible?

I expect the vote to tend more towards no, the more often taxes are voted on. Since, your plan has less room for change with market price, the need for a vote would be more often. Market prices will determine how often.

I would like to emphasize that it depends a lot on what projects the property taxes fund, how big a problem your proposal would be.

[tlj009]

depending on the local government, not all local governments require voter approval to raise taxes.

That is interesting. I didn't know that.

[Bryan]

Originally Posted by tlj009

That is interesting. I didn't know that.

yup, in fact in texas, voters have no direct influence on their tax rate other than the representatives they elect. In Texas a homeowner will pay taxes to the School District, City, County, Community College, Hospital District, Water District, it's crazy, there are so many local municipalities that Texas property owners pay taxes to. Interestingly enough, part of the State Constitution is that there can be no statewide property tax, but they have gotten so high that the Texas Supreme Court ruled the property taxes unconstitutional because it was to the point that the taxes were almost the same wherever you went and it was just like having a state property tax.

http://www.foxnews.com/story/0,2933,176458,00.html

[JerryLove]

I am not assuming a 1:1 tie for housing costs and governmental costs. I am just saying that there is some kind of correlation.

But if it's not 1:1, then fluxuations in property values still debalance the tax structure and still take the kinds of corrections you were worried were cause by my system.

In short, I don't fix that governmental needs will require changes, but I don't cause it either.

Since I am not in Florida, perhaps you can tell me what the property taxes fund. Water, sewer, fire protection, ???

It varies. Though I'm not attempting to change what the money is used for, simply how it's collected.

Yes, except I believe that property taxes are the primary funding for local government rather than the state governments. Local governments have a harder time sticking to a budget than the state.

Again I don't see how moving to a tax my percentage rather than by milliage aggrivates that problem.

Still, it would depend entirely on what the money was used for whether or not your idea would work. If housing prices double over the course of a year, then I would think salaries would have to go up.

In reality, they didn't.

Your plan could cause some problems depending on how drastic fluctuations are and how long until the next vote. With a fixed income that does not depend on market prices, a budget could, potentially become a lot harder to stick to, or even produce for that matter.

I don't see how the budget being known rather than unknown makes sticking to it more difficult rather than less.

Anyway, it seems like all I hear is complaining about needing more money until the politicians run from reelection and then all of the sudden they support a tax reduction.

The politicians who just got elected here in FL have tax reform high on their list or public issues... particularly property tax.

Though as I said before, I'm not commenting on raising or lowering taxes. My change will simply even burden and place the control for income in the budget rather than determined semi-randomly by market movement.

[tlj009]

But if it's not 1:1, then fluxuations in property values still debalance the tax structure and still take the kinds of corrections you were worried were cause by my system.

In short, I don't fix that governmental needs will require changes, but I don't cause it either.

Except that when it is based on property values, it rises when property values rise and then drops when they come back down. I am just thinking that your idea may very well get stuck on the high side and never find its way back down. At least there is a risk of that, particularly when they actually get it passed, because prices are high, and they decide that they like the extra income when prices fall.

It varies. Though I'm not attempting to change what the money is used for, simply how it's collected.

But what it is used for could impact how much is needed. If the town wants a park and puts it in the budget, then prices go up, they can no longer afford a park. So there goes one project out the window until next year.
You are not only changing how it's collected, but also the amount, and indirectly what it is used for. Because we both know that just because there isn't enough money for a park, it will be used for something else.

Again I don't see how moving to a tax my percentage rather than by milliage aggrivates that problem.

Housing prices are, at least somewhat, characteristic of market prices. To have a good budget, it is necessary to know how much your project is going to cost. If labor, materials, etc. go up then so does your cost of the project. On the other hand, being a government, if you overshoot then you are taking money from another project. So if your income is steady and not based somewhat on the market prices, then it is harder keep to your budget because all of your projects are based off of market prices.

In reality, they didn't.

Maybe not. But a rising cost of living without a rise in salary is not a good thing and is likely to cause problems sooner or later. Anyway land prices went up so, anything related to the cost of land, housing, whatever would have gone up.

I don't see how the budget being known rather than unknown makes sticking to it more difficult rather than less.

If the cost of something goes up then the budget must be adjusted to account for this change otherwise the project will not get done, or finished whichever the case.

The politicians who just got elected here in FL have tax reform high on their list or public issues... particularly property tax.

Though as I said before, I'm not commenting on raising or lowering taxes. My change will simply even burden and place the control for income in the budget rather than determined semi-randomly by market movement.

And that would be fine, except you would have to place the taxes at a high level and leave them there, because you cannot let market prices exceed your budget. So once, you have built a surplus, (hopefully it won't be used up in next year's budget) you may be able to weather market fluctuations for a time. But when the community realizes that there is a surplus, I am willing to bet that it gets used for one project or another and when the market prices goes up, you are now in the hole and projects get cut.

[JerryLove]

Except that when it is based on property values, it rises when property values rise and then drops when they come back down. I am just thinking that your idea may very well get stuck on the high side and never find its way back down. At least there is a risk of that, particularly when they actually get it passed, because prices are high, and they decide that they like the extra income when prices fall.

Any governemnt may at any point choose too high a tax. I don't see that as a problem with my plan.

But what it is used for could impact how much is needed. If the town wants a park and puts it in the budget, then prices go up, they can no longer afford a park. So there goes one project out the window until next year.
You are not only changing how it's collected, but also the amount, and indirectly what it is used for. Because we both know that just because there isn't enough money for a park, it will be used for something else.

I don't care how much is needed. Whether they need a million dollars or a trillion dollars, my plan discusses how to asses taxes by property relative to one antoher.

Housing prices are, at least somewhat, characteristic of market prices. To have a good budget, it is necessary to know how much your project is going to cost. If labor, materials, etc. go up then so does your cost of the project. On the other hand, being a government, if you overshoot then you are taking money from another project. So if your income is steady and not based somewhat on the market prices, then it is harder keep to your budget because all of your projects are based off of market prices.

The market doubled in 2005? I must have missed that. Certainly my pay didn't budge.

Maybe not. But a rising cost of living without a rise in salary is not a good thing and is likely to cause problems sooner or later. Anyway land prices went up so, anything related to the cost of land, housing, whatever would have gone up.

No. A PVC pipe costs about the same as it did 10 years ago. Some building materials went up in response to Katrina, but they are mostly back down now.

If the cost of something goes up then the budget must be adjusted to account for this change otherwise the project will not get done, or finished whichever the case.

So if the cost of healthcare skyrockets but the cost of housing doesn't then there's not enough money. If the cost of land skyrockets and nothing else does, then there's way too much money and (as you suggested) pork-spending happens to the point that we don't know what to do if priced move down. Also, if prices move down, there's a sudden fiscal crisis.

Under my system, taxes are independant of property values. If governmental costs move up, you raise the tax involved. If it moves down, you can lower it.

And that would be fine, except you would have to place the taxes at a high level and leave them there, because you cannot let market prices exceed your budget. So once, you have built a surplus, (hopefully it won't be used up in next year's budget) you may be able to weather market fluctuations for a time. But when the community realizes that there is a surplus, I am willing to bet that it gets used for one project or another and when the market prices goes up, you are now in the hole and projects get cut.

So you keep imagining. Every time you try to tie that into real events it fails. The costs of running the state did not, in fact, raise in line with housing values (there was a $2,000,000,000 surplus), the rest of my cost of living did not double, and my pay did not go up.

In short, none of the things that you said would happen did happen. What did happen is that property taxes shot up unneccessairily, and the property tax burden became extremely lopsided between people who had baught and stayed in their house pre-balloon and those who baught a house after.

A solution to what really does and did happen is what I proposed.

[tlj009]

Any governemnt may at any point choose too high a tax. I don't see that as a problem with my plan.

OK

I don't care how much is needed. Whether they need a million dollars or a trillion dollars, my plan discusses how to asses taxes by property relative to one antoher.

I am sure that you don't care. I no longer care either. After all I don't live in Florida and wouldn't do anything about it if I did.

The market doubled in 2005? I must have missed that. Certainly my pay didn't budge.

Did I say the market doubled in 2005? I must have missed that too. No doubt that you pay didn't budge. Do you work for the government? Or even better for a contractor, since to maintain a constant profit, their prices would rise almost immediately.

No. A PVC pipe costs about the same as it did 10 years ago. Some building materials went up in response to Katrina, but they are mostly back down now.

Actually no. PVC pipe costs is considerably higher over just the last 3 years. Along with copper, steel, and general construction costs. I don't deal directly with the parts suppliers usually, but I do deal with contractors constantly and I know what things bid at. Example, before Katrina I would bid 6" CL160 PVC at $6.25/LF now $8.00/LF (BTW after Katrina $12.00/LF, also I am in Louisiana). Anyway this is beside the point. Are you suggesting that suppliers don't pass on any rise in their cost of production to their custormers? (that includes contractors since they supply a service)

So if the cost of healthcare skyrockets but the cost of housing doesn't then there's not enough money. If the cost of land skyrockets and nothing else does, then there's way too much money and (as you suggested) pork-spending happens to the point that we don't know what to do if priced move down. Also, if prices move down, there's a sudden fiscal crisis.

Under my system, taxes are independant of property values. If governmental costs move up, you raise the tax involved. If it moves down, you can lower it.

Which makes for a lot of voting, unless like Bryan suggested, you don't vote on taxes.

Of course this isn't a good comparison, since the millage rate can be adjusted up and down just as easily as what you are suggesting (by vote). Except the current system wouldn't requiring going to the voting booth as much since the other two options (healthcare and housing going up or down) wouldn't require a vote. I guess it would take some research, which I won't do, to tell whether these other options happen a significant amount of the time.

So you keep imagining. Every time you try to tie that into real events it fails.

I never tried to tie it into real events.

The costs of running the state did not, in fact, raise in line with housing values (there was a $2,000,000,000 surplus), the rest of my cost of living did not double, and my pay did not go up.

When? After Katrina (since that is the only thing that you brought up)? OK. It is hard for me to believe that the cost of running the state did not go up after a hurricane. It is hard for me to believe that contractors didn't charge more to pay for higher insurance, damaged property, higher price of materials, etc. Florida may have had a surplus before or overcompensated to insure a surplus (cutting projects) but I suspect the cost of running the government rose a little anyway.

In short, none of the things that you said would happen did happen. What did happen is that property taxes shot up unneccessairily, and the property tax burden became extremely lopsided between people who had baught and stayed in their house pre-balloon and those who baught a house after.

I am a little confused. Why didn't taxes on all the property go up? Did the tax assessor not re-assess the value of the existing property when housing prices doubled? The state sure missed out on a lot of income. Maybe I just don't have my head around how Florida works.

A solution to what really does and did happen is what I proposed.

OK. If you say that you are the expert, I guess I will just have to believe everything you say without question.

Seriously, I just don't care about this conversation anyway.

[JerryLove]

Did I say the market doubled in 2005?

Yes. Here's how you phrased it:

Housing prices are, at least somewhat, characteristic of market prices.

The housing market has been noted for it's rapid rise *compared* to the rest of the market. This year, in a market that's generally growing at a similar rate to last year, housing prices are falling.

Your statement that property values are "characteristic of market prices" is false.

No doubt that you pay didn't budge. Do you work for the government? Or even better for a contractor, since to maintain a constant profit, their prices would rise almost immediately.

The added income was not absorbed by rising costs. In fact, it left the state of Florida with a $2,000,000,000 surplus they had to find a place to put.

Nor have bugetary needs dropped this year, even though the property market is devalued.

Are you suggesting that suppliers don't pass on any rise in their cost of production to their custormers? (that includes contractors since they supply a service)

No, I'm flat-out saying that a doubling of property vlaues does not equate to even an approximate doubling of costs market-wide.

To support this, I'm pointing out a lack of doubling market-wide during the same period that land values doubled.

Which makes for a lot of voting, unless like Bryan suggested, you don't vote on taxes.

Generally we do not. The state only votes on elections and citizen inititives (which modify the constitution).

Of course this isn't a good comparison, since the millage rate can be adjusted up and down just as easily as what you are suggesting (by vote). Except the current system wouldn't requiring going to the voting booth as much since the other two options (healthcare and housing going up or down) wouldn't require a vote. I guess it would take some research, which I won't do, to tell whether these other options happen a significant amount of the time.

It cannot for two reasons.

1) The millage rate is decided at the beginning of a year (and only changed if someone bothers to change it, which is unlikely in a rising market... who wants to give up "free revenue"). Since apprasials are done at time of purchace, and since the market can shoot up in a year, new apprasials are out-of-sync with the market values on which the milliage was set.

2) If you don't lock the apprasial value at purchace (which FL does), then someone can be taxed out of their home because their neighbor builds a nice house or because values went up. If you do lock it, then adjustments to bring the "average home" back to deisred levels will put old homeowners in average homes below average taxes at the expense of newer owners in the exact same homes.

These are the two problems that really are occuring here in FL, and what I solve.

I never tried to tie it into real events.

Just one example:

"If housing prices double over the course of a year, then I would think salaries would have to go up. "

Since housing prices really did double, (technically over 24 months) we have a real event to look at. Salaries did not go up (more than 2-4% which happend in years without doubling too).

When? After Katrina (since that is the only thing that you brought up)? OK. It is hard for me to believe that the cost of running the state did not go up after a hurricane. It is hard for me to believe that contractors didn't charge more to pay for higher insurance, damaged property, higher price of materials, etc. Florida may have had a surplus before or overcompensated to insure a surplus (cutting projects) but I suspect the cost of running the government rose a little anyway.

I'm sure it goes up a little every year.

Property values doubled.
Property taxes doubled.
The cost of running the state did not do anythine even approaching doubling.

I am a little confused. Why didn't taxes on all the property go up? Did the tax assessor not re-assess the value of the existing property when housing prices doubled? The state sure missed out on a lot of income. Maybe I just don't have my head around how Florida works.

Because homsteaded property doesn't get reassed. If it did, half the homeowners in Florida in 2001 would have lost their houses when their taxes suddenly doubled.

OK. If you say that you are the expert, I guess I will just have to believe everything you say without question.

That might be for the best.