patrick.net

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Blue says

Would you believe that this $9m mansion in ritzy Presidio Heights pays the same tax as a $300k starter home in Richmond?

I guess that is why the sales tax is 7.25% in California (compared to 4% for Georgia) and the income tax would be very high for the owner of this mansion if they make a lot of money as a California full time resident.

The California sales tax and the income tax compensate for the low property tax ?

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Sales tax is 9.375% in San Jose. The property tax includes several thousand dollars in special assessments on top of the “claimed 1% or 1.25%”…

Patrick says

4. the sole tax to be on land values

This is Georgism. Hong Kong partially implemented this and it works very well.

During feudalism in Europe, those who were rich and had control over the poor and working class were the landowners.

So this seems like a good idea as far as stopping the tyranny of landowners.

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Eman says

Let’s offer some solutions here. Let’s say repeal Prop 13 now. Shouldn’t everything be reset to 1978 including sales tax, state income tax rate, no more rent control, reduce the city permit fees for new construction, etc… to 1978 prices? Wouldn’t this be a fair proposal?

Turning a regressive tax regime into a fair one:
https://www.taxfairnessproject.org/reform

Blue says

Eman says

Let’s offer some solutions here. Let’s say repeal Prop 13 now. Shouldn’t everything be reset to 1978 including sales tax, state income tax rate, no more rent control, reduce the city permit fees for new construction, etc… to 1978 prices? Wouldn’t this be a fair proposal?

Turning a regressive tax regime into a fair one:
https://www.taxfairnessproject.org/reform

“One thing that needs to be acknowledged is that we are focusing solely on property tax here. Income tax in California is quite high (largely to compensate for the lower property tax rates). A "total tax" ranking of California would likely put it higher than #18.”

@Blue, the above quote is directly from the link you shared. If you and/or the author believe Prop 13 is the holy grail in solving CA housing crises as well as tax revenue problem, let’s reset everything to 1978 basis including state income tax, sales tax and whatever else and go from there. I’m always for a fair proposal. The problem is will the politicians listen to any of your or anyone on Patnet’s ideas?

My family came to this country way after 1978. All my siblings are property owners, who bought as early as 1996 and as late as 2018. No one complained about Prop 13. We never saw it as a problem, fair or unfair. It’s like playing a game. We dealt with the in-place rules and regulations, and made the best of what this country has to offer. We love America.

As of now, we all recognize the affordability housing crises for the next generation so we’re putting our brains together and figuring out how to have them afford housing here. No complaints in our family. We just try to solve problems. Complaints don’t get us anywhere in this household, or country. Did I say we love this country? 🥰

Patrick says

FortwayeAsFuckJoeBiden says

i know many old people in ca, if prop 13 gone they’d be on the street.

That was the excuse used to transfer cash from workers to rich landowners.

It would be very simple to add a means test to Prop 13, or just let the elderly defer the taxes until they die and the house is sold.

But they didn't do that.

Actually, they did do that, at least in Santa Clara county. If you are over a certain "retirement" age you can ask the county to just put a lien on your house for the amount of the taxes owed. I'm not even sure if you have to pay interest on that automatic "loan." Does the house have enough value to back that lien? Well, if the house didn't go up in value then the taxes wouldn't go up either, so exactly the same people who need the lien are the same people whose house has enough increased value to support the lien.

https://www.reddit.com/r/RealEstate/comments/1633g36/toilet_was_voiding_directly_into_crawl_space_for/

Toilet was voiding directly into crawl space for 2 years.

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Patrick says

4. the sole tax to be on land values

This is Georgism. Hong Kong partially implemented this and it works very well.

During feudalism in Europe, those who were rich and had control over the poor and working class were the landowners.

So this seems like a good idea as far as stopping the tyranny of landowners.

.

google doesn’t own land, yet it owns politics… just saying the obvious. there aren’t simple bad guy good guy here. ca has entire system built on bullshit and socialism. S8 people get 3-8k rent subsidy, go compete with that as a working man. you need 96k post tax just to break even. wait till you guys see other subsidies they get. holy cow! this is one of many reasons why no taxes will ever be enough.

american government trillions in debt… and they fucking give us credit score… deadbeats.

Eman says

You’re kidding right Patrick? Do you know how expensive is HongKong real estate market?

@Eman Not kidding. Hong Kong real estate is so expensive because Hong Kong is so prosperous.

Because of the money from the land value tax in Hong Kong, they have a low income tax and sales tax there. They have a maximum income tax of 17%. Here in the US it's 37% max federal, plus close to 10% for California.

And there is 0% sales tax on most goods and services in Hong Kong.

All thanks to their land value tax!

Patrick says

Eman says

You’re kidding right Patrick? Do you know how expensive is HongKong real estate market?

Eman Not kidding. Hong Kong real estate is so expensive because Hong Kong is so prosperous.

Because of the money from the land value tax in Hong Kong, they have a low income tax and sales tax there. They have a maximum income tax of 17%. Here in the US it's 37% max federal, plus close to 10% for California.

And there is 0% sales tax on most goods and services in Hong Kong.

All thanks to their land value tax!

Aaaand they are CCP bitches now.

Eman says

As of now, we all recognize the affordability housing crises for the next generation so we’re putting our brains together and figuring out how to have them afford housing here. No complaints in our family. We just try to solve problems. Complaints don’t get us anywhere in this household, or country. Did I say we love this country? 🥰

This. Learn the game, plan and figure it out. Whining ain't fixing anything. It's easier for people to bitch though, so that's not going away.

Put this way as an example. South Shore Chicago, I'm exponentially more likely to get randomly shot and killed. I don't go there. I'm not going to bitch about the crime and all that crap, I just don't go there. Our society has become weak and unknowledgeable. They rely on government too much instead of their own instinct or rely on others that lie to them. Figure it out on your own. Don't rely on government. Don't rely on media. See what's in front of you. Learn a new thing or get a new skill. People are flat out lazy now. It's bad.

RWSGFY says

Aaaand they are CCP bitches now.

Yes, but that has nothing to do with the land value tax.

Patrick says

Eman says

You’re kidding right Patrick? Do you know how expensive is HongKong real estate market?

Eman Not kidding. Hong Kong real estate is so expensive because Hong Kong is so prosperous.

Because of the money from the land value tax in Hong Kong, they have a low income tax and sales tax there. They have a maximum income tax of 17%. Here in the US it's 37% max federal, plus close to 10% for California.

And there is 0% sales tax on most goods and services in Hong Kong.

All thanks to their land value tax!

just interesting thing for you guys here. i’m in a red state again. if land tax is up, farmers go out of business. cities are different, very different. city land is consumption, country land is production. of course there are speculation faggots everywhere. but general terms. i’m all for 0 taxation and fuck this government. because i see too many poor fucked by the system.

FortwayeAsFuckJoeBiden says

if land tax is up, farmers go out of business.

FW, do you know any farmers? Farmland is taxed at mostly nothing in every region. Talking under $200/acre. Farmers are getting waaaaaaaaaaay more than $200/acre in crop yields, which outside of equipment and fertilizer is one of their biggest expenses... and it's low.

The only way a farmer isn't making a shit load of money is if they've leveraged the land to buy a lifestyle. My kids are friends with two prominent farmers here in IL. They aren't remotely poor or struggling. Property taxes could triple and they'll still be rich. Farmers cry poor a lot. Most are millionaires. Fact is there's only so much land. They have a lot of it and they can produce stuff people need on a daily basis. I wouldn't listen to farmers that complain. They likely went out and bought a bunch of toys leveraged by their land with credit.

WookieMan says

The only way a farmer isn't making a shit load of money is if they've leveraged the land to buy a lifestyle. My kids are friends with two prominent farmers here in IL. They aren't remotely poor or struggling. Property taxes could triple and they'll still be rich. Farmers cry poor a lot. Most are millionaires.

Dude, I knew farmers. They work from sunup to down, 7 days a week, no vacation. It's a very demanding job. I have some LIMITED experience with it, I couldn't do it, most people can't. Tending a large garden, that's hard enough, handling dozens of animals? Forget about it.

It's a completely alien mindset to most people. Just having a couple cows is trouble. Patrick had chickens - just having 1/2 a dozen isn't easy. You are suddenly on a schedule, you can't leave them alone, you have to constantly worry about predators, you have to feed them. Like it or not, they become family of a sort - you become responsible for them. It's not trivial or easy to farm.

Wookie knows about farming also? Who could have known?

Two articles today about housing on prices going down

https://www.msn.com/en-us/money/realestate/home-prices-may-be-on-the-verge-of-cooling-off/ar-AA1g6WaN

https://www.cnbc.com/2023/09/01/home-prices-rise-in-july-but-may-be-on-the-verge-of-cooling-off.html

So housing affordability is becoming a lot more a news topic, as CNBC reports: "It now takes roughly 38% of the median household income to make the monthly payment on the median-priced home purchase, according to Black Knight. That makes homeownership the least affordable it’s been since 1984."

FortwayeAsFuckJoeBiden says

if land tax is up, farmers go out of business

@FortwayeAsFuckJoeBiden

No, that won't happen. In Georgism, the tax is set at only the value of the rent on unimproved land.

If the farmer can rent out unimproved land for, say, $1000 per month, then his tax would be $1000 per month and he can obviously afford it.

The farmer would pay ZERO tax on the increased income from improved land. So once he improves the land (with ditches or whatever) and can bring in $2000 per month, he would STILL pay only $1000 per month.

The idea is to encourage improvements, and discourage mere non-productive land ownership.

Even better, the farmer would pay ZERO tax on his income above that $1000, and ZERO sales tax on everything he buys.

There would be only one tax, the tax on unimproved land values. Everyone would be better off except for the people who are trying to suck money out of productive people via land rents.

“In July, the sales pace of new homes climbed 4.4% compared to June, reaching a seasonally adjusted annual rate of 714,000. On a year-over-year basis, new home sales were up 31.5%.“ - Impressive.

https://www.housingwire.com/articles/new-home-sales-picked-up-significantly-in-july-can-it-last/

So Georgism is like Prop13 on steroids?

Eman says

“In July, the sales pace of new homes climbed 4.4% compared to June, reaching a seasonally adjusted annual rate of 714,000. On a year-over-year basis, new home sales were up 31.5%.“ - Impressive.

Median house price peaked at $480,000 and has dropped to $416,000 by end of April 2023, so it has dropped about 14%.

It likely has dropped present day below $416,000.

This article says end of July 2023 the price was $407,000 : https://www.msn.com/en-us/money/realestate/home-prices-spike-to-over-400-000-after-5-months-of-declines/ar-AA1g2ngf

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RWSGFY says

So Georgism is like Prop13 on steroids?

@RWSGFY

Georgism is the opposite of Prop 13 on steroids.

Prop 13 is pretty close to the worst law ever made, shoveling money up to the very rich at the expense of people who actually work.

It was justified with "Don't kick out grandma!" but never included any means test, and did include landlords and businesses. The result was that the very rich and landlords and businesses profited, and people who actually do work were hurt. Regular house owners were bribed to go along, and betrayed all morality when they did so.

The right answer is to:

1. never tax the building, tax only the land, but ALWAYS tax the land value
2. let the elderly defer the land value tax until they die

You can defer
property taxes once you are over certain age in CA too, so let's keep this noise out.

Georgism is exactly
like Prop13 because it's the same "buy your land in 1970 and pay 1970 property tax in 2023". Except with Prop13 your property tax still grows albeit at a preset rate while under G-ism it doesn't, hence G-ism is Prop13 on steroids. People who
like Georgism but dislilke Prop13 must suffer from
cognitive dissonance.

Under Georgism, your land value tax adjusts with the value of the land.

This is very different than Prop 13, which is an attempt to never have any significant property tax increase.

Patrick says

Under Georgism, your land value tax adjusts with the value of the land.

This is very different than Prop 13, which is an attempt to never have any significant property tax increase.

Didn't you do a big write up on this? Maybe repost it here? I think it has legs as an idea. I love America and would hate to see it become a 3rd world country. I read that 25% of all homes are owned by corporations? True?

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Eman says

“In July, the sales pace of new homes climbed 4.4% compared to June, reaching a seasonally adjusted annual rate of 714,000. On a year-over-year basis, new home sales were up 31.5%.“ - Impressive.

Median house price peaked at $480,000 and has dropped to $416,000 by end of April 2023, so it has dropped about 14%.

It likely has dropped present day below $416,000.

This article says end of July 2023 the price was $407,000 : https://www.msn.com/en-us/money/realestate/home-prices-spike-to-over-400-000-after-5-months-of-declines/ar-AA1g2ngf

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.

The fact the sales rebounded after 5 months of slump suggests the market is likely close to an equilibrium.

Eman says

The fact the sales rebounded after 5 months of slump suggests the market is likely close to an equilibrium.

The 30-year mortgage rate is still over 7%. I see equilibrium at the current median price for the USA when the rate drops from 7% and steadies between 5 and 5.5%.

..

ad says

I see equilibrium at the current median price for the USA when the rate drops from 7% and steadies between 5 and 5.5%.

Or when/if prices drop to...?

GNL says

Or when/if prices drop to...?

If prices stay constant that is the median home price for USA remains around $410,000.

I think the Fed wants to see housing price grow at a much lower rate than income.

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ad says

I think the Fed wants to see housing price grow at a much lower rate than income.

The Fed doesn’t get to decide. If they hike rates where housing is so expensive to finance who are they hurting? Such a one dimensional thinking.

Eman says

The Fed doesn’t get to decide. If they hike rates where housing is so expensive to finance who are they hurting? Such a one dimensional thinking.

Check CPI's and PCE's aggregate data for housing inflation. That is one reason why the Fed has increased the Fed Funds' rate to 5.5% and to a 22 year high.

Jerome Powell has made specific comments about housing prices: https://thehill.com/business/4121466-powell-housing-market-has-a-ways-to-go-before-prices-cool/

They are adversely effecting speculators and/or investors like you by trying to reduce asset (ie., residential real estate) prices, regardless of how multidimensional their thinking is.

I think they want to see a return to the mean whereas residential real estate returns closer to the 4% annual appreciation trend line.

.

@ad,

It doesn’t impact me. I’m always a buyer/seller for the right price. They’re hurting the consumers more than anything.

The huge rent/buy ratio disparity in our market makes it hard for people to buy so they rent. This is why we’ve been getting record rents in our market. It’s just much cheaper to rent than to buy. How will the Fed bring it to disparity or 4% annual appreciation target?

In theory, it’s easy. Reality is so different. I’ve had this discussion with my Federal Reserve buddy frequently. Even he doesn’t have an answer for it. Hope is the magic word for them

Perhaps a mild recession. Whatever that means. The Fed is not as bright as they appear to be. HOPE is all they got.

Eman says

ad,

It doesn’t impact me. I’m always a buyer/seller for the right price. They’re hurting the consumers more than anything.

The huge rent/buy ratio disparity in our market makes it hard for people to buy so they rent. This is why we’ve been getting record rents in our market. It’s just much cheaper to rent than to buy. How will the Fed bring it to disparity or 4% annual appreciation target?

In theory, it’s easy. Reality is so different. I’ve had this discussion with my Federal Reserve buddy frequently. Even he doesn’t have an answer for it. Hope is the magic word for them

This makes no sense: if it's cheaper to rent than to buy, how are people who buy houses to rent them
out have a positive cashflow? Their mortgage rents are even higher than these of owner-occupiers, aren't they?

Patrick says

Under Georgism, your land value tax adjusts with the value of the land.

This is very different than Prop 13, which is an attempt to never have any significant property tax increase.

So basically you go from a legally codified and strictly limited tax increases back to basically bending down, grabbing your ankles and letting the newsoms of this world jack up your property taxes as high as they want to and need to finance their frivolous spending? How is it better? Sounds like the system Californians has rebelled against in the first place.

Eman says

The huge rent/buy ratio disparity in our market makes it hard for people to buy so they rent. This is why we’ve been getting record rents in our market. It’s just much cheaper to rent than to buy. How will the Fed bring it to disparity or 4% annual appreciation target?

The median price dropped at least 15% based on the news sources I posted.

The next 12 to 18 months will reveal if there is more of a price drop or not, and if income increases at a faster rate than housing inflation.

What is the capitalization (or cap) rate for those getting "record rents" ?

I understand if you own the home long term as a landlord, the capitalization rate may increase as lease rates increase annually as a greater rate than composite or overall PCE and CPI.

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RWSGFY says

So basically you go from a legally codified and strictly limited tax increases back to basically bending down, grabbing your ankles and letting the newsoms of this world jack up your property taxes as high as they want to and need to finance their frivolous spending? How is it better? Sounds like the system Californians has rebelled against in the first place.

This is about to happen to me in Maui. Taxes are already (don't even get me started about biz property tax) ~18% on vacation rentals. Maui want's to add another 25%.

This after they scared off the tourists for about a year.

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I examine total state and local tax burden: https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494

Florida is 46 and California is 17.

9 out of the top 10 are Democrat shitholes.

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US real estate investors have been losing money on 1 in 7 homes sold — nearly the highest share since 2016. And they most likely took huge hits in these 5 cities
High mortgage rates have eaten into investor profits and dramatically increased the typical homebuyer’s monthly payment. This in turn has slowed homebuying demand and pushed down sale prices, meaning the share of investor-owned homes selling at a loss has gone up.
Phoenix, Arizona, the hardest hit market in March. Just over 30% of homes sold by investors lost money. Phoenix was followed by Las Vegas, Nevada, (28%), Jacksonville, Florida, (20.9%), Sacramento, California, (20.2%) and Charlotte, N.C. (17.4%).

GNL says

I love America and would hate to see it become a 3rd world country. I read that 25% of all homes are owned by corporations? True?

RFK Jr. was hitting this point pretty heavily in his CNBC interview, quoting Jefferson, of course...