But in this case, we are talking about a system in which landowners are essentially being coerced (feel free to quibble with that term) into entering into contracts that they may simply not wish to do. Recall the outrage in many quarters about people being forced to buy health insurance, or pay tax penalties. Now we’re talking about forcing people to either sell their home or pay tax penalties. The playing field is being tilted towards buyers, since buyers are in no way penalized in this system. They (the general they) are free to keep bidding on a property until an owner has no choice but to sell, which could have serious implications for cases like Ms. Vera Coking of Atlantic City. In essence, it is like giving the power of eminent domain to private interests.
I totally agree that California’s response to the problem of forcing people out of their houses has been a disaster. And yet, the proposed solution in this thread is to make it far, far easier to force people out of their houses. That’s a disaster in the other direction.
I have had my houses appraised several times, and never once have I argued over the bus lines and whatnot. Am I doing it wrong?
It’s an illustration of the economic inefficiency of forcing people into markets that they do not seek to participate in. It’s no more cartoonish than the system people are, for whatever reason, taking seriously as a means of assessing property taxes, except with the potential for substantial penalties for homeowners.
This thread reminds me of the definition of cynics, who know the price of everything and the value of nothing. Turning taxation on one’s home into an exercise in game theory is really disturbing, frankly.
No, I won’t quibble. And I don’t dispute the fact that this idea has some downsides for people who would rather just have predictable property taxes and live where they live.
Any tax system where the tax goes up in unpredictable ways is going to have some coercive effect on those people. And as we both agree, systems like California’s where the tax can’t go up fast enough to match the market are horribly distorting. So, to some extent at least, we have to let actual market price determine the value to be taxed. Perhaps it just has to be one of several inputs, with some additional bias toward stability.
And consider how much better this system is for people who actually can’t afford the tax and have to move. They have a ready and willing buyer at hand!
I’m not suggesting this as a panacea. But, once you accept that tax should be paid on the actual value of property, I think a system that uses actual bona fide offers to determine that value is a reasonable one.
I don’t know, maybe? My house appraisal had some complicated formula for how much of the property you could see the mountains from. I don’t know, maybe that formula is a good estimator of value, or maybe (my opinion) it’s totally full of shit. The amount that people are willing to offer seems like a much better input. And house appraisals around sales always manage to find out that the house is worth exactly as much as the buyers are willing to pay. It’s only not around sale time that things get wishy-washy.
Sure, but somebody’s paying the tax somewhere. If the homeowners aren’t paying extra tax based on the real value of their property, someone else is paying it. You describe those costs as substantial penalties when they’re allocated to certain specific homeowners, but ignore them when they’re paid by other not-as-clearly-defined groups.
I don’t deny that there’s value in predictability and being able to keep living in your house if you want. But there’s also value in people paying roughly the same tax rate, and in land being used for a more societally optimal purpose. I don’t think it’s cynical to consider alternate models that weigh those values differently.
I never said that was fair market value. I said the fair market value was at least that. It establishes a minimum. What, if someone offers $850,000 for a piece of property you contend the fair market value is lower? That sounds wrong. And if the owner refuses to accept the offer, what then of the value? We can assume it is definitely higher than the offer.
Fair market value depends on two people generally wanting to engage in a transaction. If one party does not want to engage in the transaction, then the price is distorted.
For example, if a seller is not interested in selling something, but is compelled to, his asking price would exceed the fair market price. If a buyer doesn’t want to buy something, but is compelled to, his bid price would be under the fair market price.
I live in Virginia, I find the car tax annoying but not oppressive. If tax on my vehicle goes towards maintaining roads I’m ok with that. If somehow the car tax disappeared the state would get the money from citizens through some other tax.
Past personal property taxesare mentioned in Gene Shepard’s In God We Trust, All Others Pay Cash. (tr;dl: tax assessors go into your house and appraise everything that you own.)