McCain - Straight Talk Express

[EricBess]

EricBess: How much did your house value rise from 2006-2007?

We purchased in 2003. The value continued to increase through 2004, since when it has been falling steadily. The value of my home has decreased by over 30% since 2004.

I don't think property tax is like sales tax. I think it is an ownership tax. You pay it based on the value, not the purchase. The intent is to pay for schools, roads, and other "common-good" items that are necessary for all neighborhoods.

 

[Spiderman]

Mooseman: But leaving shouldn't be a "penalty" or difficult to do. I mean, there are various reasons to wanting to leave the area and sell...

 

[Mooseman]

Mooseman: But leaving shouldn't be a "penalty" or difficult to do. I mean, there are various reasons to wanting to leave the area and sell...

So, staying and improving your property should be?????

EB: I was not saying no property tax, but don't reassess due to improvements.... the rate can change as needed....
Also, there are those who would like to see all property tax disappear and be replaced by a sales (consumption as they call it) tax..... These people are nuts.....

 

[Spiderman]

Beats me. I'm just saying that your idea won't satisfy people either

 

[EricBess]

The bottom line is that there is a certain cost to running a city, state, or nation, and changing anything is going to lead to one person benefiting and another feeling shorted.

Ideally, costs associated with owning property (public parks, police force, etc.) would be associated with property taxes. Gas taxes would pay for highways, etc.

IMO, however, the only way to truely address any of this is to completely reform spending, not collection.

Mooseman - I agree with you about improvements. People shouldn't get penalized for making improvements on their home. They paid to make the improvements with money that was (in theory) already taxed.

Here's an idea - Assess property tax based on the sales price of the home or by some appraisal process when a home is purchased. Yearly, apply a percentage increase/decrease based on overall increases or decreases within your community, but without a specific focus on your home.

If a home is subject to short sale or forclosure and ends up appraised low because it needs a little sweat equity, that can be factored in with an assumption of a certain amount of improvements over time, but that should be the extent.

 

[Mooseman]

EB: That sounds kind of good, but what do you do with those with loads of capital that can buy a 100k home, put 2 or 3 hundred k into it and pay low taxes for x years then sell. Do you tax the increase in the house value from sale to sale?


Spidey: Aren't those who own more on their houses then they are worth, penalized if they were to try to sell now? Isn't the market making it difficult to sell? If you are aware of what needs done to sell you house and the costs involved, people will learn to adapt their planning. But now we have people who have owned their property for 20, 30 or even 40 years and they can't afford to improve the property due to the raising taxes.

 

[Spiderman]

I'm not sure what you guys are proposing but what about the homeowner who does nothing to his house. Does it make sense for his house to increase in value in 5 years? If he's not improving it, he should probably be selling it at around the price he paid for it.

Mooseman: There's two different issues in your question (at least how I read it). Yes, it's more difficult to sell your house if it's worth less than what you owe (I'm actually almost in that boat myself - my house is for sale but I can't really lower the price anymore 'cause then I won't break even on my mortgage). And it's definitely hard for people (harder on this forum since EB is in that position.

But here's the second part: if you've owned your house for 20-40 years, you *should* have enough equity in your house to make improvements. I mean, most houses would have been paid off by then. Unless you're living beyond your means and continually taking out refinances as your value of your home increases and not using it for improvements, which says more about that person's money management than the market.

 

[DarthFerret]

Property and house values are destined to go up, even without making improvements. The inflation rate takes care of that. However, I am one of the people that would advocate getting rid of the annual taxes for property and domiciles. I am pretty much against any type of recurruing taxation. When I lived in Missouri, I had to pay personal property taxes on my vehicles. Never thought much of it, it was just a fact of life. Then I moved to Texas and discovered that there is no such tax here. In fact, Texas does not even have a State income tax. Two of the many reasons why Texas is the best State in the country (other than maybe Hawaii, but have never been/lived there so I don't know).

 

[Spiderman]

So... should the government stop collecting your trash and stuff after the first time you pay your taxes? You haul it to the dump yourself? Not a problem in Texas I guess, but should the state stop plowing your road?

I could see getting taxed on just the increase in property maybe from year to year...

I heard Alaska is a good place to live - no income tax PLUS you get an oil check every year (about $500 or so I think, maybe it's more now). Not sure about sales tax.

 

[DarthFerret]

I am not sure about elsewhere, but here the government does not collect my trash. Waste Management is the company that does so, and we pay for garbabe collection. Same with my parents in Missouri (although now they stopped having that service and burn everything, taking the scraps to the dump once a year, and get charged for that). As for road maintenance, that is collected out of the sales taxes and other taxes, sent to the federal government, and then a portion of it sent back to the state for those purposes. Not sure why the feds get it first, but they do. May have to do with federally funded highways, but again, I do not know. While it is true that in Houston, we do not need snow plows and such, but in North Texas they do. There are also other taxes out there that take care of such things.

Anyways, all I was saying is that the property tax should be a one time tax. Sales tax is, and it covers a wide variety of areas itself. It may seem a bit strange to think of it this way at first, but if I purchase a plasma screen tv for $5000.00 I am only taxed once. If I purchase a vehicle for $5000.00 I should only be taxed once. I pay other taxes for the roads that I drive on, just as I have to pay a utilities tax on the elcetricity and cable I use for the television. Property is property to me, and I do not think there should be an annual tax on it. That being said, I am a law abiding citizen, and will pay the taxes that I owe every year, even if I disagree with thier existance.

Alaska may be a good place to live, however the main factor in my move from Idaho to Texas was the temperature. I hate being cold, and would probably hate Alaska that much more. I have actually been pondering an investigation into Hawaii, and may soon make a much more in depth investigation into the communiuties there. My job has a possibility of transfering to that location and I would relish the change of scenery

 

[Spiderman]

It obviously varies from place to place, as some place don't have sales tax, some don't have income tax, etc.

Here, the county government handles our trash pickup and snow removal. Loads of other stuff too. We have income tax, real estate tax, sales tax, etc. so I'm sure from the government point of view, they're collecting tax from somewhere and doling it out to various agencies.

We were looking into moving to York, PA because of the cheaper housing there but the real estate tax is higher there. Not sure if it's the county or the state so whether this is Mooseman is talking about, but I'm sure the higher real estate tax is to bring up the difference from somewhere that they have a low or no tax on something else that Maryland has.

The difference between the TV/vehicle and real estate tax is that the former depreciate while the latter appreciates. I betcha if the former also appreciated, you'd see tax on them too

I heard Hawaii's cost of living is rather high, a lot of it due because pretty much everything has to be shipped over there.

 

[rokapoke]

Anyways, all I was saying is that the property tax should be a one time tax.

Don't those taxes pay for public schools, though?

 

[EricBess]

EB: That sounds kind of good, but what do you do with those with loads of capital that can buy a 100k home, put 2 or 3 hundred k into it and pay low taxes for x years then sell. Do you tax the increase in the house value from sale to sale?

I may be wrong here, but I see this an a non-issue. If the 100k was what was reasonable for the neighborhood at the time of purchase, then putting 300k worth of improvements into the house (a pool, updated kitchen, etc) is not going to make it sell for 400k, simply because the market in that neighborhood probably won't bear that cost. Sure, your 300k of improvements might increase the value to 200k, but didn't the person making the improvements spend 300k and weren't there sales taxes on those purchases?

Personally, I think that anything that actually encourages people to improve their homes should be as encouraged as possible.

If the purchase of 100k were a short sale, then the actual value could have increase anually by a certain amount under the assumption of improvements.

If the value of the house increases because the market in that area increases, then the neighborhood assessment takes care of that.

I don't know if it would work and I'm sure there are some complexities that would need to be addressed. For example, certain types of improvements that have a direct impact on the value of the house, dispite the market could raise the value (maybe give a 1-year grace to avoid discouraging such improvements). For example, an addition to the house increases the square footage and adds rooms. A pool might fall in this category, etc.

Don't those taxes pay for public schools, though?

It should if it doesn't. I think in most cases it does. And I think it is appropriate. This also raises a good point, though - why should tax assessment be based on home value more than just on some neighborhood assessment? I know it's an attempt to distribute wealth, thus making it so people who can afford the most expensive houses pay the most. But realistically, what would it hurt if we didn't increase assessments on improvements made? Life doesn't suddenly become more expensive for everyone in my neighborhood just because I redid the kitchen or put in a pool, does it?

 

[EricBess]

Don't those taxes pay for public schools, though?

It should if it doesn't. I think in most cases it does. And I think it is appropriate. This also raises a good point, though - why should tax assessment be based on home value more than just on some neighborhood assessment? I know it's an attempt to distribute wealth, thus making it so people who can afford the most expensive houses pay the most. But realistically, what would it hurt if we didn't increase assessments on improvements made? Life doesn't suddenly become more expensive for everyone in my neighborhood just because I redid the kitchen or put in a pool, does it?

 

[DarthFerret]

(Don't get me started on publically funded schools...)

Seriously, I have no idea where all the monies come from, how they are pooled or how they are distributed. I just know that there are taxes on just about everything that can possibly be taxed. Kinda different from the Bill of Rights which states: governement shall not levy any taxes other than import and excise taxes. Of course this was ammended by the 16th ammendment to include income tax. All of a sudden, we are flooded with taxation.

The old addage of the only two constants in the world are death and taxes is true. What is worse, we get taxed even in death (inheritance tax, etc...)!

 

[EricBess]

I could be wrong, DF, but my understanding is that the bill of rights is referring to federal government. In other words, states can levy specific taxes for developmental needs, but federal taxes would be limited.

 

[Spiderman]

And you probably need to look at the circumstances of *why* income tax was instituted...

Anyway, a general house assessment isn't going to take redo-ing your kitchen into account, that's only done when the house is sold *and* you, as the seller, sets the starting price anyway. You could not take it into consideration and set the selling price "low" so any kitchen improvements are a "steal". You could set it "high" and try to recoup some of the cost. You may have had to redo the kitchen to offset some other negative aspect about your house (next to a highway). The point is, a general house assessment looks to see how houses are selling in the area for that period or maybe over the period of time since the last assessment.

 

[Oversoul]

Kind of on-topic, but mostly I thought it was funny: http://www.youtube.com/watch?v=NC0Y7zMcn_4

 

[DarthFerret]

Yes, he made a mistake, but then, so does just about everyone in the public eye. Obama did the same thing, as I had pointed out in a previous post, and also at that time I had said that if McCain did it, people would blame it on his age and senility. Wow, feels good to be right. (BTW...what Obama had said was that there were 57 states. We all know it was just a verbal oops, but come on, tit for tat!)

 

[Oversoul]

Yes, he made a mistake, but then, so does just about everyone in the public eye. Obama did the same thing, as I had pointed out in a previous post, and also at that time I had said that if McCain did it, people would blame it on his age and senility. Wow, feels good to be right. (BTW...what Obama had said was that there were 57 states. We all know it was just a verbal oops, but come on, tit for tat!)

Who's blaming it on senility? I'm perfectly willing to accept that this has nothing to do with age. Now the Czechoslovakia thing (twice that I know of), really does come across as senility...

Obama's mistake was funny too, but in a completely different way.