What will the repeal of Prop 13 do to the market?

[CA renter]

[quote=SD Realtor]UR you are taking a microscopic view while mine is more macro in nature. I take the aggregate taxation policy into account not just the property tax issue because I believe they are intertwined.

I believe that the aggregate of the taxation policy for California is one that should be a focus. That is, if you are a homeowner and a wage earner in California your total taxation is pretty damn hefty.

I think that those who believe that increasing taxes (WHATEVER THEY ARE, property, income, sales) I don’t care you choose it, for a given entity, be it state, local, federal, should be done with some BENEFIT for the taxpayer.

So if you want to raise my state taxes, all I ask is that you show me a benefit. Show me you can balance a budget for a year or two with CURRENT revenues. If that can be done then fantastic, go ahead and increase my taxes after that and show me my benefit.

The big problem here is an assumption by you and any other tax increase advocate. Your assumption is that by raising my taxes our school scores will improve or state services will improve. However we have just HAD AN INCREASE in income taxes and NEITHER happened. In fact, we are continuing to deteriorate.

LOGIC follows that it is perfectly reasonable for me to assume that another increase in any state related tax will NOT improve my life, or the schools, or any service that my family enjoys. It is NOT UNREASONABLE to ask that the state govt clean the ledger, balance the budget with what they have, then if they want to add services in a well defined and orderly manner, and can do that with raising taxes but STAYING WITHIN BUDGET then I am okay with it.

However to just agree that implicitly raising more more revenue and more revenue for the state legislature without them showing any improvement in budget keeping is completely ridiculous. Its like going to the doctor and saying ouch my head hurts and the doctor asks you why you keep bumping it against the wall?[/quote]

One thing people need to keep in mind… Revenues and expenses can vary wildly in the public sector. A wise person would suggest saving through the boom times in order to prepare for the bad times, but in government, if there is “excess” money being put away during the good times (as perceived by taxpayers), they will insist that taxes are too high, and demand lower taxes.

In a way, the govt is damned if they save, and damned if they don’t. IMHO, this is one of the reasons they have to budget the way they do — use it, or lose it. They really can’t do otherwise unless the masses grasp the fact that public entities need to have significant savings in order to get them through the hard times.

If the taxpayers’ advocates don’t get them on the revenue side, the special interests (including large developers/land owners, “special interests,” unions, and private entities who do all kinds of business with the govt) will get them on the spending side.

Right now, they are trying to budget, but it’s a moving target. They keep expecting revenues to increase, or at least remain stable; and expenditures to decrease or remain stable, but the prolonging of the recession (prolonged, because of the bailouts and unwillingness to let things bottom more quickly) is making it very difficult for them to budget.

As I’ve said many times before, it is the duration of the recession/depression that will kill us, not the depth. It would have been far, far better if they would have allowed things to fall more quickly and dramatically. It would have hurt more initially, but we would have gotten to a sustainable foundation from which we could have recovered. As it stands, they have piled trillions of dollars of debt on taxpayers’ shoulders, and we will be ground down for many, many years to come. All because the sheeple were convinced that the world would have somehow fallen apart if we didn’t save the financial industry (and the criminals who control it).

But you already know all this, SDR. I’m preaching to the choir. 😉

[patb]

my argument is that house prices would drop because turnover would increase.

Right now i’d bet a large number of people are sitting on property because they want to avoid a sales tax reset.

Investment property, underutilized property.
etc.

If the taxes kick up, it will spur some people to sell, and at the same time, it will open opportunities to buy.

Because Supply is so restricted, prices for lower quality is too high.

Here we will see Beach front shacks come out and yeah they will move.

but the healthiest thing for california would be a
15% price drop followed by more ordinary turnover.

[patb]

my argument is that house prices would drop because turnover would increase.

Right now i’d bet a large number of people are sitting on property because they want to avoid a sales tax reset.

Investment property, underutilized property.
etc.

If the taxes kick up, it will spur some people to sell, and at the same time, it will open opportunities to buy.

Because Supply is so restricted, prices for lower quality is too high.

Here we will see Beach front shacks come out and yeah they will move.

but the healthiest thing for california would be a
15% price drop followed by more ordinary turnover.

[patb]

my argument is that house prices would drop because turnover would increase.

Right now i’d bet a large number of people are sitting on property because they want to avoid a sales tax reset.

Investment property, underutilized property.
etc.

If the taxes kick up, it will spur some people to sell, and at the same time, it will open opportunities to buy.

Because Supply is so restricted, prices for lower quality is too high.

Here we will see Beach front shacks come out and yeah they will move.

but the healthiest thing for california would be a
15% price drop followed by more ordinary turnover.

[patb]

my argument is that house prices would drop because turnover would increase.

Right now i’d bet a large number of people are sitting on property because they want to avoid a sales tax reset.

Investment property, underutilized property.
etc.

If the taxes kick up, it will spur some people to sell, and at the same time, it will open opportunities to buy.

Because Supply is so restricted, prices for lower quality is too high.

Here we will see Beach front shacks come out and yeah they will move.

but the healthiest thing for california would be a
15% price drop followed by more ordinary turnover.

[patb]

my argument is that house prices would drop because turnover would increase.

Right now i’d bet a large number of people are sitting on property because they want to avoid a sales tax reset.

Investment property, underutilized property.
etc.

If the taxes kick up, it will spur some people to sell, and at the same time, it will open opportunities to buy.

Because Supply is so restricted, prices for lower quality is too high.

Here we will see Beach front shacks come out and yeah they will move.

but the healthiest thing for california would be a
15% price drop followed by more ordinary turnover.

[jpinpb]

If they repeal Prop 13, I don’t think you’d see that big of a drop in price. NJ and NY have very high taxes. Unless you’re living in the sticks of those states, their homes aren’t exactly cheap.

Regardless of Prop 13, we are still California and there’s not a shortage of people that want to be here. That keeps it high. But what it really boils down to is what people can afford. That is the bottom line. And during the bubble, people foolishly bought homes they couldn’t afford. Different story now.

I don’t think this ride is over yet, so I think prices will still slowly decline. But as far as getting rid of Prop 13 b/c that will bring prices lower, I don’t think that is true. It will be a deterrent to buying/owning, but it will come down to affordability. It will be less of an incentive and retired people will have to reconsider b/c that aspect won’t be appealing.

It would hurt many people more than it would help people, IMO. It will definitely NOT help the economy, as people who stay will have less money to spend b/c of higher taxes going to fill the deep well of government deficit.

[jpinpb]

If they repeal Prop 13, I don’t think you’d see that big of a drop in price. NJ and NY have very high taxes. Unless you’re living in the sticks of those states, their homes aren’t exactly cheap.

Regardless of Prop 13, we are still California and there’s not a shortage of people that want to be here. That keeps it high. But what it really boils down to is what people can afford. That is the bottom line. And during the bubble, people foolishly bought homes they couldn’t afford. Different story now.

I don’t think this ride is over yet, so I think prices will still slowly decline. But as far as getting rid of Prop 13 b/c that will bring prices lower, I don’t think that is true. It will be a deterrent to buying/owning, but it will come down to affordability. It will be less of an incentive and retired people will have to reconsider b/c that aspect won’t be appealing.

It would hurt many people more than it would help people, IMO. It will definitely NOT help the economy, as people who stay will have less money to spend b/c of higher taxes going to fill the deep well of government deficit.

[jpinpb]

If they repeal Prop 13, I don’t think you’d see that big of a drop in price. NJ and NY have very high taxes. Unless you’re living in the sticks of those states, their homes aren’t exactly cheap.

Regardless of Prop 13, we are still California and there’s not a shortage of people that want to be here. That keeps it high. But what it really boils down to is what people can afford. That is the bottom line. And during the bubble, people foolishly bought homes they couldn’t afford. Different story now.

I don’t think this ride is over yet, so I think prices will still slowly decline. But as far as getting rid of Prop 13 b/c that will bring prices lower, I don’t think that is true. It will be a deterrent to buying/owning, but it will come down to affordability. It will be less of an incentive and retired people will have to reconsider b/c that aspect won’t be appealing.

It would hurt many people more than it would help people, IMO. It will definitely NOT help the economy, as people who stay will have less money to spend b/c of higher taxes going to fill the deep well of government deficit.

[jpinpb]

If they repeal Prop 13, I don’t think you’d see that big of a drop in price. NJ and NY have very high taxes. Unless you’re living in the sticks of those states, their homes aren’t exactly cheap.

Regardless of Prop 13, we are still California and there’s not a shortage of people that want to be here. That keeps it high. But what it really boils down to is what people can afford. That is the bottom line. And during the bubble, people foolishly bought homes they couldn’t afford. Different story now.

I don’t think this ride is over yet, so I think prices will still slowly decline. But as far as getting rid of Prop 13 b/c that will bring prices lower, I don’t think that is true. It will be a deterrent to buying/owning, but it will come down to affordability. It will be less of an incentive and retired people will have to reconsider b/c that aspect won’t be appealing.

It would hurt many people more than it would help people, IMO. It will definitely NOT help the economy, as people who stay will have less money to spend b/c of higher taxes going to fill the deep well of government deficit.

[jpinpb]

If they repeal Prop 13, I don’t think you’d see that big of a drop in price. NJ and NY have very high taxes. Unless you’re living in the sticks of those states, their homes aren’t exactly cheap.

Regardless of Prop 13, we are still California and there’s not a shortage of people that want to be here. That keeps it high. But what it really boils down to is what people can afford. That is the bottom line. And during the bubble, people foolishly bought homes they couldn’t afford. Different story now.

I don’t think this ride is over yet, so I think prices will still slowly decline. But as far as getting rid of Prop 13 b/c that will bring prices lower, I don’t think that is true. It will be a deterrent to buying/owning, but it will come down to affordability. It will be less of an incentive and retired people will have to reconsider b/c that aspect won’t be appealing.

It would hurt many people more than it would help people, IMO. It will definitely NOT help the economy, as people who stay will have less money to spend b/c of higher taxes going to fill the deep well of government deficit.

[jstoesz]

I am never for higher taxes in this state. And sadly if prop 13 was done away with, it would not be balanced with lower taxes for everyone else. So given the current state of CA politics, I can not support the repeal of prop 13. But if we are in a fantasy land thought experiment, I would whole heartedly support the repeal. It seems incredibly unfair, old people should have to pay equal taxes. If the neighborhood they moved into turns into LJ 20 years after buying, and they can’t afford the taxes, vote for lower taxes or move out like the rest of us. But if we heap a repeal of prop 13 onto the current tax rates, well that is just confiscatory.

[jstoesz]

I am never for higher taxes in this state. And sadly if prop 13 was done away with, it would not be balanced with lower taxes for everyone else. So given the current state of CA politics, I can not support the repeal of prop 13. But if we are in a fantasy land thought experiment, I would whole heartedly support the repeal. It seems incredibly unfair, old people should have to pay equal taxes. If the neighborhood they moved into turns into LJ 20 years after buying, and they can’t afford the taxes, vote for lower taxes or move out like the rest of us. But if we heap a repeal of prop 13 onto the current tax rates, well that is just confiscatory.

[jstoesz]

I am never for higher taxes in this state. And sadly if prop 13 was done away with, it would not be balanced with lower taxes for everyone else. So given the current state of CA politics, I can not support the repeal of prop 13. But if we are in a fantasy land thought experiment, I would whole heartedly support the repeal. It seems incredibly unfair, old people should have to pay equal taxes. If the neighborhood they moved into turns into LJ 20 years after buying, and they can’t afford the taxes, vote for lower taxes or move out like the rest of us. But if we heap a repeal of prop 13 onto the current tax rates, well that is just confiscatory.

[jstoesz]

I am never for higher taxes in this state. And sadly if prop 13 was done away with, it would not be balanced with lower taxes for everyone else. So given the current state of CA politics, I can not support the repeal of prop 13. But if we are in a fantasy land thought experiment, I would whole heartedly support the repeal. It seems incredibly unfair, old people should have to pay equal taxes. If the neighborhood they moved into turns into LJ 20 years after buying, and they can’t afford the taxes, vote for lower taxes or move out like the rest of us. But if we heap a repeal of prop 13 onto the current tax rates, well that is just confiscatory.

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