Post by unlawflcombatnt on May 19, 2012 23:36:44 GMT -6
from wealthandwant.com via Patrick.net
Proposition 13
by Mason Gafney
"Property taxes are the most common way to fund many local services. In California in 1978, the voters opted for Proposition 13, which (a) limited the sales tax to 1% of the assessed value of each property; and (b) limited annual increases in assessed values to the lesser of 2% or the increase in the cost of living for the year, with the exception that upon the sale of a property, the assessment would be updated to the transaction price. The effects of this have been widespread and of great impact on the well-being of Californians.
Housing prices have soared as a direct result.
Homeownership, which is among the lowest of all the states in the US, increased among those who in 1978 were of prime homeowning age and dropped among all younger age groups.
Commercial properties, which change hands infrequently, are paying a lower share of property taxes because of Proposition 13's protections.
Young homebuyers pay both huge mortgages and high property taxes, often supplemented by parcel taxes which weigh equally on owners of poorly located cottages and huge apartment complexes — and then, they and California's tenants, who are a large share of the population, also are faced with sales and other taxes.
The negative effects are wide-ranging. The injustices produced and the large land fortunes protected, are directly related.
California's schools have gone from being highly respected to being well below the middle of the pack.
Those who own slower-appreciating sites (inland, poorly located) aare carring a larger share of the tax burden than their share of the property value would merit. Those who have bought more recently are carrying a larger share than they should be — and they must also pay income and sales taxes, and parcel taxes, on top of that. Those who own waterfront or waterview properties, which appreciate much faster, are getting fabulous bargains on their property taxes— at the expense of those who own small, poorly located properties. Amazingly, the US Supreme Court has approved this! (One would like to think that, had they had the benefit of an additional 10 years of data, they could not have reached the same conclusion. They ruled in 1992.)
Warren Buffett attempted to call attention to the iniquities and inequities of Proposition 13 during the gubernatorial race of 2003, but was ordered to silence, which he kept until after the election. Proposition 13 is known as the third rail of California politics. One would think that with a homeownership rate of only slightly over 50%, this terribly unjust structure would be politically vulnerable, especially in view of the evils it has produced.
Georgists seek to eliminate or at least reduce taxes on buildings, and assert that higher taxes on land values will promote the common good, and that ceilings on property taxes, such as Proposition 13, cause far more harm than taxes on buildings create.
Mason Gaffney's article, "Who Owns Southern California?" includes a lot of parcels which are large and have not changed hands in decades. Many of them collect a lot of rent and pay little in property taxes, shifting the costs of providing services onto individuals — often the same individuals who are paying that rent!
A May, 2006, Federal Reserve Board study found that in the top 46 metro markets, land accounted for, on average, 50.9% of the value of single-family housing stock, in 2004. The study reported that in the remainder of the country, the corresponding value, for 2000, was about 27%. The 50.9% figure ranged from a low of 23.3% in Oklahoma City to a high of 88.5% in the San Francisco metro. (source: www.federalreserve.gov/pubs/feds/2006/200625/index.html; see particularly tables 6a through 6g.)
Proposition 13, and other legislation similar to it, are to be avoided at all costs by states and muncipalities and societies which claim to be run by rationality and/or by the golden rule. They have produced a state in which the poor labor to line the pockets of (1) those who own the land and (2) those who will lend them money to buy that land from them.
We, like you no doubt, are basking in the unearned increment of the land under our house, turbo-charged by tax-exemption. Two of our older children in Marin County are basking, too, and we take comfort in their well-being. We deserve this, right? Are we not of The Greatest Generation (how we love that toadying title)? But how will your grandchildren afford a home at today's prices? We get the increment, but they get the excrement. Oh, well, the plunging dollar, crumbling infrastructure, far-called navies and troops melting away, soaring interest rates, higher taxes, incredible public debts coming due ... it'll all be different soon. We may all grow poor together."
Proposition 13
by Mason Gafney
"Property taxes are the most common way to fund many local services. In California in 1978, the voters opted for Proposition 13, which (a) limited the sales tax to 1% of the assessed value of each property; and (b) limited annual increases in assessed values to the lesser of 2% or the increase in the cost of living for the year, with the exception that upon the sale of a property, the assessment would be updated to the transaction price. The effects of this have been widespread and of great impact on the well-being of Californians.
Housing prices have soared as a direct result.
Homeownership, which is among the lowest of all the states in the US, increased among those who in 1978 were of prime homeowning age and dropped among all younger age groups.
Commercial properties, which change hands infrequently, are paying a lower share of property taxes because of Proposition 13's protections.
Young homebuyers pay both huge mortgages and high property taxes, often supplemented by parcel taxes which weigh equally on owners of poorly located cottages and huge apartment complexes — and then, they and California's tenants, who are a large share of the population, also are faced with sales and other taxes.
The negative effects are wide-ranging. The injustices produced and the large land fortunes protected, are directly related.
California's schools have gone from being highly respected to being well below the middle of the pack.
Those who own slower-appreciating sites (inland, poorly located) aare carring a larger share of the tax burden than their share of the property value would merit. Those who have bought more recently are carrying a larger share than they should be — and they must also pay income and sales taxes, and parcel taxes, on top of that. Those who own waterfront or waterview properties, which appreciate much faster, are getting fabulous bargains on their property taxes— at the expense of those who own small, poorly located properties. Amazingly, the US Supreme Court has approved this! (One would like to think that, had they had the benefit of an additional 10 years of data, they could not have reached the same conclusion. They ruled in 1992.)
Warren Buffett attempted to call attention to the iniquities and inequities of Proposition 13 during the gubernatorial race of 2003, but was ordered to silence, which he kept until after the election. Proposition 13 is known as the third rail of California politics. One would think that with a homeownership rate of only slightly over 50%, this terribly unjust structure would be politically vulnerable, especially in view of the evils it has produced.
Georgists seek to eliminate or at least reduce taxes on buildings, and assert that higher taxes on land values will promote the common good, and that ceilings on property taxes, such as Proposition 13, cause far more harm than taxes on buildings create.
Mason Gaffney's article, "Who Owns Southern California?" includes a lot of parcels which are large and have not changed hands in decades. Many of them collect a lot of rent and pay little in property taxes, shifting the costs of providing services onto individuals — often the same individuals who are paying that rent!
A May, 2006, Federal Reserve Board study found that in the top 46 metro markets, land accounted for, on average, 50.9% of the value of single-family housing stock, in 2004. The study reported that in the remainder of the country, the corresponding value, for 2000, was about 27%. The 50.9% figure ranged from a low of 23.3% in Oklahoma City to a high of 88.5% in the San Francisco metro. (source: www.federalreserve.gov/pubs/feds/2006/200625/index.html; see particularly tables 6a through 6g.)
Proposition 13, and other legislation similar to it, are to be avoided at all costs by states and muncipalities and societies which claim to be run by rationality and/or by the golden rule. They have produced a state in which the poor labor to line the pockets of (1) those who own the land and (2) those who will lend them money to buy that land from them.
We, like you no doubt, are basking in the unearned increment of the land under our house, turbo-charged by tax-exemption. Two of our older children in Marin County are basking, too, and we take comfort in their well-being. We deserve this, right? Are we not of The Greatest Generation (how we love that toadying title)? But how will your grandchildren afford a home at today's prices? We get the increment, but they get the excrement. Oh, well, the plunging dollar, crumbling infrastructure, far-called navies and troops melting away, soaring interest rates, higher taxes, incredible public debts coming due ... it'll all be different soon. We may all grow poor together."