Remember the purpose of property tax to begin with is for the owner to lose the property in case they are not as wealthy as someone else who might be interested someday. Or in case the property itself can not provide more than enough income to pay the tax in a timely way.
Another problem is that taxes were always high but they didn't actually start skyrocketing until a few decades ago, after one of the key stabilizing anti-Carpetbagger laws which prevented home equity loans, was repealed.
And the sky's the limit whenever untapped wealth is unleashed, to be audited and appraised.
So it's been kind of a race between property appreciation, available equity to borrow against as values increase, versus tax rates and appraisals trying to capture more of that in ways that can only result in owners becoming less whole that it ever has been.
Revenue-neutral or not, anything that makes it worse makes it worse.
But I forgot to add that the amount of revenue from property tax is only intended to act like collateral damage :)
When you do the math it turns out anytime you start taxing anything but commerce, it is unsustainable because it accrues and accumulates disadvantage to the taxpayer until it is overwhelming. Plus the higher that taxes rise above absolute insignificance, the more likely a major upset occurs from just a slight lapse in overall prosperity, re-balancing to the further disadvantage against those who can afford it least. And that doesn't include the pulling of political strings by those who benefit most from that type activity.
You don't sensibly tax people just for existing, even at 3/5 the amount per head. Likewise their property unless it is involved in commercial activity, nor wage income since the employer is the commercial enterprise they should have that all covered like it used to be when things were not so predatory.
But they tax "rooftops" like a lot of other places based on square footage and now in Houston there has been some recent influence to demolish unoccupied buildings more so for appearance sake to the world for the upcoming World Cup as an excuse more than anything else.
It appears the actual demolition of truly abandoned buildings can not be accelerated without blurring the lines between actual abandonment and merely unoccupied to some degree or another.
But appearances can be deceiving.
The big thing is there's enough people much wealthier than those who have the properties now, who want them either way, demolished or not.
Under threat of forced demolition those having buildings suitable for rehab would need to sell for less than they would have otherwise. Who cares about the poor sellers who have been paying taxes on the buildings the whole time, working toward a financial turnaround? The idea seems to be to incentivize new buyers to have better opportunities by preying on previous owners' misfortune.
OTOH, as soon as any property has had any nonproductive structures removed, its appraised value and tax levy drops like a rock, making it way more attractive for the same type buyers who could have already obtained all the lots having buildings they are willing to rehab.
The new buyers can then afford many more vacant lots for potential future construction, which had always been a non-bonanza prospect otherwise, and with the newly lowered taxes afford to wait and see which might be a bonanza to build on someday. A lot more so than the previous owners.
If a lot of this happens at the same time, then the market for reclaimed lots like this will have downward price pressure too until the effect runs its course.
Too bad for the little guy either way.
"Property taxes currently generate 70 percent of all local tax revenue, some or all of which would have to be replaced with other taxes under property tax repeal."
And if you DO choose to tax commerce, the effects are lousy.
Even Milton Friedman repeatedly called LVT the "least bad" tax. Too bad he didn't life a finger to support it. Not sure who he was working for, or what pressures he must have been under.
I think it's helpful to stay up-to-date myself. But also not forget how we got here and what it was like before.
>Property taxes currently generate 70 percent of all local tax revenue,
That's what I'm pointing out.
How badly it can get out of hand. Not because it's unchecked, just because it exists at all and can't be kept down to insignificance through ordinary ups & downs. Especially not over the very long term.
That's what makes it unsustainable.
At least to where they tear down more perfectly strong buildings than ever.
And 70% is not nearly enough in case nobody noticed.
It's too late now. You could calculate when 100% won't be enough, or even 110%.
That's not as drastic as it sounds though. It only means your own taxes are bound to rise 30 to 40% above what they are now by the same time. But to the taxing authorities, it will be just a drop in the bucket.
Most people who can afford what they are paying now will be able to handle that much of an increase though. So maybe only a few thousand more will lose their homes and no way it should be any vast percentage wiped out completely.
But could continue to add to the homeless population, and maybe 30 to 40% more than there is now would be a good estimate.
Still only a few thousand families, which I guess some will figure is the least bad in a city this size.
Originaly, the Lords crafting the levy scheme didn't need the money at all. They just wanted a way to get the land.
And it only affected the very most unfortunate who sadly couldn't even afford to pay such an insignificant pittance.
Other than commerce, so far nobody has proposed any other way for any tax to more accurately track prosperity, and therefore the ability for all to pay as long as there is any prosperity left at all under the worst of conditions.
Without compromising or threatening any previous earnings or property which have always been completely unfair to tax more than once.
Probably a good time to mention that I always pay more than my fair share because I like to be more than fair. It's only a few percent so I just work a few percent more and then some so I'm fine. But not everybody can do that.
Perhaps the high-and-always-increasing-tax enthusiasts don't want anybody to have any permanent assets, ever.
One thing's for sure, when prosperity booms, the revenue from commerce alone booms in exact tandem with it.
Come up with anything else like that and I'm all ears :)
Certainly property taxes can even overshoot commerce in the case of a real estate bubble, but if that's the least bad it sure doesn't work out like the taxation tracks when actual money is made very much at all. Rather like taxing anything of value just because it exists. Who ever thought of that? If you whittle away at things over and over again eventually they cease to exist.
Not that I would want to repeal property tax overnight, I like stability for the prosperity that has already been earned more so than the (remote) possibility of future prosperity as a result of hare-brained schemes from dream salesmen.
Things like this which are too big to fail need to be carefully rolled back before they fail catastrophically from their own weight.
>all of which would have to be replaced with other taxes
Which would be ideal as long as earned assets could only be taxed once, when the commerce occurred. Repeat commerce would be paying all the bills as it repeats in an ongoing way as long as any wealth is being created. With no chipping away of anything else already built by long hard work.
With a revenue-neutral bottom line local operations would be no different, so the dramatically reduced risk to the working or retired homeowner would be without financial cost.
You can't get much cheaper than that :)
When people can't even see any way that a complete rollback could ever be set into motion, or any rollback, I take that as an indication they lack the responsible nature to steward prosperity to any net taxpayer benefit whatsoever. As has consistently been seen among politicians with no exceptions in Texas for decades.
This is exactly the problem that Land Value Tax proposes to fix. The tax doesn’t go down if the land owner destroys their structures and ruins the site.
The owners don't want to destroy the structures at all.
They've been holding onto the properties because appreciation was outpacing taxation, allowing a predictable path to remodeling and re-habitation.
Until that changed. Primarily from greedier investors not having enough low-hanging fruit to pick from so they're shaking the trees for all they have until they can give no more.
It's new buyers instead that want to swoop in if the landscape can be further tilted in their favor. Just a little bit is all it takes to yield a big return for a privileged few.
Other costs have risen too but the taxes are so high that's what triggers the final destruction.
Property tax has that extra-financial "property" that keeps your home positioned like dominos ready to fall. Like other skyrocketing costs don't do, even though the pressure from them is huge too.
This is by design.
LVT wont help you now. It's too late.