Taxing wealth -- albeit in this limited form -- is fairly attractive, and especially the taxation of land (rather than improvements) is. (We should be incentivizing folks to make efficient use of land.)
> We should be incentivizing folks to make efficient use of land.
Yes - why don’t we invest in places where house prices are lower?
Stockton keeps being mentioned.
The incentives are for people to live there and for businesses to set up offices there, and amenities to be created for the people who live and work there.
Why would you be against developing areas that are not as nice right now?
> Yes - why don’t we invest in places where house prices are lower?
There is an old quote. "Why do people rob banks? Because that is where the money is." Whatever benefits of the area are why people were willing to pay higher prices. It is good for not as nice areas to develop but trying to bootstrapping a less developed area is also expensive with fewer guarantees of demand in the area. It is like trying to go max density zoning from the start in Sim City and having massive bills and no demand. "Retirement communities" are the main demand for those cheaper niches and even then they have other demands to fulfill like medical care.
Nobody is talking about bootstrapping demand in less developed areas.
Elsewhere people were talking about how people were being forced to buy houses in places like Stockton because they couldn’t afford to buy them in Cupertino.
So the demand is already there.
One complaint was that those people have to travel a long way to get to work.
One dystopian solution to this is to use taxes to confiscate property from people who live near employees, so that workers can live there temporarily.
Another way is for companies to open offices in places where their workers can afford to live, contributing to the creation of more attractive communities as they do so.
>The incentives are for people to live there and for businesses to set up offices there
Clearly not, otherwise people would move there. As it turns out, network effects exist, causing jobs to be near each other and for some reason people like to be close to their jobs rather than commuting 90 minutes from Stockton.
>Why would you be against developing areas that are not as nice right now?
These aren't mutually exclusive and you know that.
Comments elsewhere claim people are moving there since housing is cheaper there.
> As it turns out, network effects exist, causing jobs to be near each other and for some reason people like to be close to their jobs rather than commuting 90 minutes from Stockton.
That can be solved by building offices in Stockton.
Businesses expanding out of areas that are too expensive is a good thing.
Forcing people out of their homes so that businesses have access to a bigger pool of workers without needing to open more offices just seems like corporate welfare, forcing yet another externality onto both employees and the nearby community.
>Why would you be against developing areas that are not as nice right now?
> These aren't mutually exclusive and you know that.
The choice to live on one place versus another is mutually exclusive.
The argument seems to be that older people should be taxed out of homes near successful businesses so that current workers can live nearer to workplaces. (And they in turn should be taxed more so that they too move out as soon as they can).
That seems to be very much about businesses not needing to expand to areas in need of development.
Property taxes under Prop 13 are actually a pretty good way to fund local government.
The revenue is very stable and dependable. Even in the depths of the 2009 dowturn, almost all California counties still had slightly increasing tax rolls. Assuming most municipal business is pretty stable, this would seem to be a good match.
Other states solve this in other ways. In Washington state, the overall assessment for a municipality can only go up slightly each year, but individual property assessments are not limited, so you can still have your share of the tax go up a lot if your neighborhood is assessed higher and other neighborhoods in the municipality are assessed lower.
> Property taxes under Prop 13 are actually a pretty good way to fund local government.
No, it's not.
Which is why California local government relies on special districts funded by Mello-Roos charges (essentially property taxes
that are flat per unit rather than value based, and are outside of the Prop 13 limits) and large transfers of state revenue for funding ever since Prop 13 restricted the top nominal property tax rate in California to much lower than effective property tax rates in the US as a whole rolled back valuations on existing property so that people weren't then paying full rate, and restricted the rate of increase of assessed value.
> The revenue is very stable and dependable
And very low, forcing reliance on taxes that are less stable and reliable than property taxes would be without the Prop 13 assessment increase limit, which is a net loss of stability.
Stability might be a decent argument for something like the assessment increase limit (if you ignore the distributional inequities) without the ultralow nominal rate limit, but to avoid reliance on other means you'd have to raise the nominal rate to target the desired effective rate given age and value distribution observed.
Taxing property has a massive advantage of stability and predictability for local governments. If you have a local sales tax, a neighboring jurisdiction might compete for lower tax rates; you might have a high-volume retailer close or move to the neighboring town; you might have a large business close (or get enticed to move).
I'd like my city to have a stable source of funding, so we don't have problems issuing bonds and don't have to cut school funding during a recession.
You’ll get no argument for me on that one.
Property taxes are an absolutely terrible way to fund local government.
Other countries don’t do it that way, and there is no reason we should.
England for example just has a flat tax per person living in a given county or borough, with some exemptions for people who don’t have enough income.
Income taxes, sales taxes and business taxes are of course other possibilities.
Taxing economic activity on the basis that a well serviced community supports that activity is very reasonable.