> If prop 13 is repealed, older Californians should have to move out of state. Remember..no one makes money unless they SELL the property.
Ideally nobody would have to move out of the state, and ideally any solution could be implemented gradually enough to ensure that there were cheaper housing options available nearby to minimize disruption. Regardless, please consider another perspective. A pair of retired people whose children have reached adulthood and moved out should be discouraged from continuing to own a 4 bedroom house in an urban area. There should be structural incentives to encourage them to sell their property and move to a home that is more efficient for society. Proposition 13 is a disaster for society precisely because ensuring that older Californians do not have to move is a disaster for society. Retired people no longer have jobs that they need to commute to, so the average commute time goes up when they stop working but decline to move. A younger couple with young children or perhaps planning on having children cannot move into the house. They are kept out of what is likely a quality school district, and will end up raising their children in less space and at a greater distance from institutions like museums that children benefit from visiting. Meanwhile, the government misses out on oodles and oodles of tax revenue that the next resident would be paying because our hypothetical retired couple doesn't have to pay adjusted property tax until they move. Not only does prop 13 provide no structural incentive to move, it provides a structural incentive to not move!
Not only is the subsidy on the order of billions of dollars, it's subsidizing something bad! It's as though the government was buying cigarettes in bulk and handing them out to children. Ensuring that retired people don't need to consider moving is the opposite of a good idea.
It seems to be suggesting that older Californians need to downsize and live small after they retire and don’t have to enjoy all the decades of working hard to pay mortgages so that the state can gain more taxes?
How is it a subsidy? They are not subsidized as they don’t realize value and if they realize value, it is only after they sell which means that taxes are delivered to the state coffers anyways.
Retired people should ‘move’ away and die someplace else because the taxes are necessary?
Why would anyone want to own property if this becomes the norm? There is no incentive to own property usually bought on mortgages and interest rates.
> It seems to be suggesting that older Californians need to downsize and live small after they retire and don’t have to enjoy all the decades of working hard to pay mortgages so that the state can gain more taxes?
And so that scarce resources can be efficiently utilized. It is broadly agreed among economists that the best taxes are those that encourage people making inefficient use of scarce resources to sell them to people who will make more efficient use of them. Generally the best way to do this is to levy a tax proportional to the value of the scarce resource in question. This is why a land-value tax is so strongly favored by economists. Property taxes are a tax on the negative externality of underutilization of resources, because someone who derives more use from the resource (close to work, close to schools, space to raise a family) will be more willing to spend money at a specific rate to continue owning the resource than someone who derives less use from it.
> How is it a subsidy?
They receive a tax break as long as they retain ownership of the property. Their continued ownership of the property is being subsidized. Tax incentives are a common method of distributing subsides. Consider the tax incentives associated with mortgages, retirement accounts, and college education funds.
> Retired people should ‘move’ away and die someplace else because the taxes are necessary?
Scarce resources are scarce, and their efficient utilization should be encouraged rather than discouraged by government policy. Markets are a crude but effective means of determining value. If a retired couple values continued ownership of a property as much as a younger couple looking to start a family values that property, then they will have equal willingness to pay the associated property tax.
> Why would anyone want to own property if this becomes the norm? There is no incentive to own property usually bought on mortgages and interest rates.
Are you asking why people would want to own property if property taxes existed? Property taxes are pretty common, and unsurprisingly people continue to own property even when subject to property taxes, because they derive more value each year from continuing to own the property than they pay in tax. And when that stops being the case, they sell the property.
In California, under the new funding formula, all property taxes collected for public education is redistributed based on certain metrics.
For example..if there are more children on free meals, that school gets more funds from Sacramento. If there are more students whose parents are non English speaking immigrants, the school gets a bigger share of the funds for extra teachers etc.
For example: Fremont in the Bay Area who has a higher income and educated demographic spends around $9000/student while Oakland which has a lower income demographic spends 14k/student.
So good Area = higher property taxes = good public schools is no longer valid. Good schools are in regions where affluent parents are able to send their kids to private tutoring classes. The schools have crumbling infrastructure because 85% of their school budgets go to wages and salaries.
It’s not really simple as it seems. CA is more complicated and we are one of the highest taxes in the state anyways.
Most of CA’s woes would be alleviated if we had a good public transport system. Not like the high speed rail system but even public
Infra and inter city fast public transport improvements.
We are not connected enough. The taxes are not being efficiently used for the benefit of the entire state. High Tax payers often get the least benefit. I think there is some societal responsibility for the wealthy to bear the needs of the weaker sections , but it’s veered a little too far to the left especially since it’s about virtue signaling now rather than accountability. I think the public would trust the govt if there were more transparency and accountability. My 2c.
Ideally nobody would have to move out of the state, and ideally any solution could be implemented gradually enough to ensure that there were cheaper housing options available nearby to minimize disruption. Regardless, please consider another perspective. A pair of retired people whose children have reached adulthood and moved out should be discouraged from continuing to own a 4 bedroom house in an urban area. There should be structural incentives to encourage them to sell their property and move to a home that is more efficient for society. Proposition 13 is a disaster for society precisely because ensuring that older Californians do not have to move is a disaster for society. Retired people no longer have jobs that they need to commute to, so the average commute time goes up when they stop working but decline to move. A younger couple with young children or perhaps planning on having children cannot move into the house. They are kept out of what is likely a quality school district, and will end up raising their children in less space and at a greater distance from institutions like museums that children benefit from visiting. Meanwhile, the government misses out on oodles and oodles of tax revenue that the next resident would be paying because our hypothetical retired couple doesn't have to pay adjusted property tax until they move. Not only does prop 13 provide no structural incentive to move, it provides a structural incentive to not move!
Not only is the subsidy on the order of billions of dollars, it's subsidizing something bad! It's as though the government was buying cigarettes in bulk and handing them out to children. Ensuring that retired people don't need to consider moving is the opposite of a good idea.