Hacker News new | past | comments | ask | show | jobs | submit login

Gaming the property tax system is not a binary proposition. How do you assess its value? How does the state choose whom to go after?

Did you even read the WaPo article? Do you not see how the existence of a property tax has come around to hurt exactly the most vulnerable population (and in this case, through no directed malice) I promise you, people living in Palisades (the richest part of DC) are not worried about property tax liens because they can pay people to deal with paying the taxes (either legally, say hiring an admin, or extralegally). It's not progressive because the bureaucracy and the hammer of the state causes a greater fundamental inconvenience to those of less means than to those of greater means.

As to the hammer, do you think the DC government would have sent "armed US marshals" to recover the house if it were in the Palisades? Why or why not?




It's not the tax that's the problem. It's a law which lets them seize the land for a few dollars in unpaid tax. That's just a heinous law. What's the next step? Repossessing kidneys for small unpaid medical bills?

Many countries have land taxes which work reasonably well. There can be some proscribed formula (based on a regression on nearby property). Or they can do valuations. There'll always be problems, but it's not more evil than many other taxes (unless they enforce it by stealing property).

Maybe the government will send in SWAT teams to collect unpaid land tax bills from poor people, and a friendly note to rich people; but that's not because it's a land tax. How do you think they treat unpaid parking tickets?

The advantage of taxing the use or consumption of a scare resource (land) instead of income should be obvious. If Bill Gates wants a mansion, he's making it harder for normal people to buy a home. If Bill Gates makes a billion dollars selling some operation system, he's presumably creating jobs, and making a lot of people happy (since they can get on the internet without buying an expensive Mac, or having to figure out how to configure their modem using Linux). (Note - some rich people make their money by being parasites, but capitalism works because this usually isn't the case).

Finally, there's the stabilising effect that a land tax has. Property is a huge investment, driven by unsophisticated retail investors (who may be putting most of their life's savings into a single home), prone to stupid fluctuations, which can destroy the lives of normal people when it does something funny. Taxing it helps keep it a little rational (as the taxes will encourage people to avoid it when it starts heating up).


1. >It's not the tax that's the problem. It's a law which lets them seize the land for a few dollars in unpaid tax.

What happens if they refuse to pay the tax, then? As an agent of the state, how do you make them pay? You might send them some letters with warnings. Of course then they might continue to shirk the law. You can ratchet up the tax, by charging interest. Ok, but that's a number. They still refuse to pay. How do you make them pay?

2. your logic is questionable:

>Property is a huge investment, driven by unsophisticated retail investors (who may be putting most of their life's savings into a single home), prone to stupid fluctuations, which can destroy the lives of normal people when it does something funny. Taxing it helps keep it a little rational (as the taxes will encourage people to avoid it when it starts heating up).

Having children is a huge investment, driven by unsophisticated people, prone to stupid fluctuations, which can destroy the lives of normal people when it does something funny. Taxing childbirth helps keep it a little rational (as the taxes will encourage people to avoid sex when it starts heating up)

Does that sound like reasonable public policy?

And aside from the policy ethics I strongly doubt your model that property taxation is a significant 'tempering agent'. If you're going to call the buyer an 'unsophisticated retail investor', it's unlikely to presume that they will have a 'sophisticated' concept of property taxation, either, especially when the government can change its parameters at will.

Finally, if you're going to argue that property taxation is supposed to be a detterent for people who you are codedly calling 'unsophisticated' (whether or accurate or not, that reads to me as 'poor people') to 'rash' purchases, well, thank you for demonstrating my point that it's tax with regressive outcomes.

If you can show me a citation indicating that property tax keeps housing prices 'rational', I'd give it a second thought.


> How do you make them pay?

OK, in extreme circumstances then seizing the land, selling it, then giving any residual (after taxes are paid) back might be necessary. The problem in this thread is, the residual didn't get given back, and it doesn't seem they followed due process.

> Having children is a huge investment, driven by unsophisticated people, prone to stupid fluctuations, which can destroy the lives of normal people when it does something funny

There's no "child bubble", in which people all want to have children when the price of children goes up. I don't follow the analogy. Wait ... you mean it's a financial risk? Good point, maybe children should be taxed, but since having children isn't always voluntary, and there's no way you can stop a person who can't afford the tax from having a kid (at least, no ethical way), then it's' probably not such a great idea.

> And aside from the policy ethics I strongly doubt your model that property taxation is a significant 'tempering agent'.

It just makes sense. As you've asked, I can find some economists who think it's a good idea. Here's some review - http://www.enhr2011.com/sites/default/files/Paper-Haffner%20...

One of the things it cites:

http://search.oecd.org/officialdocuments/displaydocumentpdf/...

Basically, yes a tax on value reduces volatility. Maybe. It's a credible idea, though it would be nice to have some more research. Transaction taxes are not such a great idea. Tax breaks on houses increase volatility.

And it's not a tax with regressive outcomes. Really poor people rent. I'm just saying "unsophisticated" to mean "people who don't trade for a living". Most people who invest in housing aren't professional real estate investors.




Applications are open for YC Winter 2020

Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | Legal | Apply to YC | Contact

Search: