Part of the problem is home prices. They have gone up much faster than income. People that bought conservative are now paying a larger percent than they planned.

GrimesCoAg95 said:

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Part of the problem is home prices. They have gone up much faster than income. People that bought conservative are now paying a larger percent than they planned.

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Really? I bought my house 5 years ago and it went up about $1k a year in taxes but then Abbott got that reduction and it is probably about $600 a year more than when I bought it.

Now insurance has increased $3k in that same time.

StandUpforAmerica said:

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Martin Cash said:

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YouBet said:

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I'm personally 100% open minded on this topic. I just don't trust the government. At all. And I also don't think it's viable without a corresponding large decrease in spending which is never going to happen.

Since I'm retired, I would also selfishly benefit from any change to the system at this point. So if I'm being totally selfish with no care in the world to the rest of you then I absolutely want property taxes abolished wholesale and if y'all want to implement a state income tax combined with an increase to the sales tax then go for it. Because I'm likely saving a **** load of money in that scenario.

In the scenario of just having a very large sales tax, the problem with that is the state would have to cut back spending bigly to account for a drop in tax receipts and a way more variable and uncertain revenue stream. Never happen.

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How is that? If you're 65, your property taxes are frozen. Sales tax is not.

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The school portion is frozen at 65. And while that is the largest portion, the other parts add up also.

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If your city and county taxes aren't frozen, that's your fault. Mine are. Every county and city should be frozen. Get your council and commissioner's court to freeze them, or get it on the ballot with a petition.

Property taxes encourage efficient use of property.

It's not a coincidence that as the baby boomers age and their income and spending habits change that now suddenly property taxes are a big issue.

One last hurrah for the boomers.

Zobel said:

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Property taxes encourage efficient use of property.

It's not a coincidence that as the baby boomers age and their income and spending habits change that now suddenly property taxes are a big issue.

One last hurrah for the boomers.

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Thoughtless take and wrong.

We Boomers are largely tax capped (over 65) -- about 85% of us. Generally, in a much better position now than before we were capped.

This is much more of a concern to generations X and Y.

Know what's better than a cap? Having them eliminated altogether!

The benefit to society would be the property tax signaling that an older couple doesn't need to live in the same large house they do now from when they had a family, and sell the house for something smaller (with a lower tax burden). That's the efficient use part.

Instead it's - we shouldn't have to pay taxes! Let's offset the tax burden to the younger generation!

We live in a society that runs basically on mob rule. It's not a coincidence that we became a gerontocracy when our largest age cohort got old. Just a consequence.

For what it's worth a better system would be to come up with a way to means test property tax freezes. Rich people shouldn't get a freeze just cuz. The general purpose of tax freezes is to prevent elderly people from being taxed out of their only option for shelter. That's not the case often here.

Zobel said:

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Know what's better than a cap? Having them eliminated altogether!

The benefit to society would be the property tax signaling that an older couple doesn't need to live in the same large house they do now from when they had a family, and sell the house for something smaller (with a lower tax burden). That's the efficient use part.

Instead it's - we shouldn't have to pay taxes! Let's offset the tax burden to the younger generation!

We live in a society that runs basically on mob rule. It's not a coincidence that we became a gerontocracy when our largest age cohort got old. Just a consequence.

For what it's worth a better system would be to come up with a way to means test property tax freezes. Rich people shouldn't get a freeze just cuz. The general purpose of tax freezes is to prevent elderly people from being taxed out of their only option for shelter. That's not the case often here.

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Guess you haven't read my posts on this thread? :-)

Worse, imo, is making it so only renters pay property taxes + increased sales taxes to eliminate taxes for generally older and more affluent house owners.

I get people being upset about property taxes. I hate paying them. But most of the alternatives will make the Texas property market look just like California's.

As far as means testing, that's just going to alienate most of your support for any changes you might want. It's one thing to apply a rule to everyone. It's an absolute insult to tell people that their hard work makes them ineligible for relief. There is luck in "getting ahead" but usually a lot more sacrifice and hard work.

And I disagree (again) that this is mainly a generational thing. It is Gen X and Y that are feeling the most pain now, not Boomers.

Quote:

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As far as means testing, that's just going to alienate most of your support for any changes you might want. It's one thing to apply a rule to everyone. It's an absolute insult to tell people that their hard work makes them ineligible for relief. There is luck in "getting ahead" but usually a lot more sacrifice and hard work.

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Yeah that's obvious, when you live in a structure with few checks between democracy and law, you get populism based on majority population. When you have a ton of old people, you get a system that favors old people. This isn't a generational dig, it's an observation of reality.

As for an insult - you're missing the point. The tax pressure on people sitting on property is one of the features of a property tax, not a bug. It creates an ongoing carrying cost for people who aren't using the property productively. In this case the example would be a couple living in a house that is far too large for their needs.

It forces unused or underused into the market which lowers prices. It also disincentivizes your home being a speculative investment rather than a useful expense.

I don't care about tax relief for wealthy people (I say that as a wealthy person). Civic virtue isn't about getting yours at the expense of everyone else, it's about doing what is best for your society. In this case shifting a property tax to a consumption tax is bad, because it raises home prices and adds a drag on economic activity. Such an idea IS attractive to people who own significant property and are at a place in their life when they're consuming / spending less (ie older homeowners who have had significant property value appreciation).

Think of it this way: we are currently incentivizing old people underusing property with rate freezes. The wealthier the person / the larger the asset the worse this becomes.

We should instead be incentivizing younger people being able to purchase homes - so we can have more people starting families, to invest in the future of our country.

The very least we should do if we keep property tax is that it should be voted on if raised!!!

Civic duty is not punishing successful. If you want to give more step up. Don't set up a system where lazy ****s get relief on the backs of others. Also no relief whatsoever on property tax. No matter the income. Means testing is just income redistribution by another name.

backintexas2013 said:

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Civic duty is not punishing successful. If you want to give more step up. Don't set up a system where lazy ****s get relief on the backs of others. Also no relief whatsoever on property tax. No matter the income. Means testing is just income redistribution by another name.

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Punishing success is a poor framing. You probably in the same breath advocate for a flat tax.

Nobody's talking about lazy. Poor elderly people with no options shouldn't be turned out of their homes because they can't pay for local schooling.

That's the relief that we should do. Not for people with free healthcare, healthy 401ks, and huge houses.

Zobel said:

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backintexas2013 said:

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Civic duty is not punishing successful. If you want to give more step up. Don't set up a system where lazy ****s get relief on the backs of others. Also no relief whatsoever on property tax. No matter the income. Means testing is just income redistribution by another name.

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Punishing success is a poor framing. You probably in the same breath advocate for a flat tax.

Nobody's talking about lazy. Poor elderly people with no options shouldn't be turned out of their homes because they can't pay for local schooling.

That's the relief that we should do. Not for people with free healthcare, healthy 401ks, and huge houses.

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He is right. Everyone should pay the same rate from the first to the last dollar or forfeit the right to vote.

Everyone should pay the same percentage.

Free healthcare? Like people on Medicaid? Who else gets free healthcare?

I'm fine with everyone paying the same property tax rates. I'm also ok with us providing relief for elderly seniors or means to not evict them for inability to pay - the scriptures say we should have mercy on orphans and widows, and the poor elderly fall into this category.

That's not what is being proposed here. People want relief from taxes. The whole point of the tax is that it imposes a carrying cost. Relief is the wrong response. If you want relief, you should downsize.

You're mixing up the vote as if it were something bought. Voting is not a right or a privilege - it is an office.

And I don't mind the fair tax - the irony here is that the people who want a flat rate income tax want to be excused from property taxes because reasons.

Zobel said:

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Quote:

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As far as means testing, that's just going to alienate most of your support for any changes you might want. It's one thing to apply a rule to everyone. It's an absolute insult to tell people that their hard work makes them ineligible for relief. There is luck in "getting ahead" but usually a lot more sacrifice and hard work.

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As for an insult - you're missing the point. The tax pressure on people sitting on property is one of the features of a property tax, not a bug. It creates an ongoing carrying cost for people who aren't using the property productively. In this case the example would be a couple living in a house that is far too large for their needs.


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Dude, you have all the signs of terminal liberal elitism.

Just exactly who are you to tell a couple that are in their "golden years" they should move out of their home because they really don't need it?

The whole reason the increased property tax exemption for those over 65 was not solely because the elderly favored it. It passed because of the support of people who will be older, and don't want to worry about government knocking on the door to kick them out. BTW - I opposed this, but knew it was likely a lead pipe cinch to pass.

And who are you to determine financial need to qualify for exemptions? Again, the system is set up to avoid that - people want to be treated as others are.

I hope you are in a different state from Texas, because if you want big, intrusive government in Texas I suspect (and hope) you will be unhappy for years to come.

Zobel said:

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You're mixing up the vote as if it were something bought. Voting is not a right or a privilege - it is an office.

And I don't mind the fair tax - the irony here is that the people who want a flat rate income tax want to be excused from property taxes because reasons.

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I don't want to be excused from property taxes. I'm fine with them. The founders were correct not to allow universal suffrage. It is the reason for our massive entitlement spending.

Across the US there are 50 states and 51 rules about how taxex are collected for schools, counties and cities (and sometimes townships). You basically have combinations of seveal different sources;

State Income Tax: TX historically has said no bueno.

Sales Tax: TX (and cities) traditionally have a "higher" sales tax rate than many other states but over the years other states have somewhat caught up here and there.

User & Other Fees: fuel, royalty, license, etc.

Property Tax: In TX it is basically your real estate. Other states also do this to your cars, boats and RV's every year when you get your new registration sticker. If you have lived outside TX in one of those states you probably felt your knees go weak when you saw the renewal fee + personal property taxes for the year on your fancy pickup, boat and RV. (imagine the same system discussed here expanded to cars, boats and RV's where you pay the state yearly property tax on those.)

If they won't bring the spending side down (or even hold it level) and you aren't going to run a deficit the reality (math) says that revenue has to come from some kind of combination of the above. The politicos (and their tax and spend constituents) have won when you have resigned yourself to arguing amongst yourselves what the math/equation to get the money from the above menu looks like....which is basically where we are at.

If TX isn't going to have an income tax and add property tax to the list.....look out for the prices on sales tax and user taxes (gas tax, etc.) and fees.

Keep it just how it is. It is perfect for those working and either in the prime of their careers or building towards that.

You can retire anywhere.

Just once I'd like to hear a state politician griping about high property taxes talk about lowering the state budget and relinquishing more of the current sales tax to local entities. Let those dollars stay where they are generated/spent instead of going to fund their massive bureaucracy.

I listened to one of the hearings on expenditure limits for cities and they talked about how we are overpaying people and not everyone needs retirement and insurance benefits. Then you look at how many state employees are making $250k+ with excellent health insurance.

Property tax to pay for some other kids education that i care nothing about, thats what some want.

Burpelson said:

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Property tax to pay for some other kids education that i care nothing about, thats what some want.

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Then vote to end public school and have them cut our taxes. I'm cool with that.

Tom Fox said:

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Burpelson said:

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Property tax to pay for some other kids education that i care nothing about, thats what some want.

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Then vote to end public school and have them cut our taxes. I'm cool with that.

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yep, let parents home school and end the failing education system, if you want kids you educate them, dont come begging for my money.

waitwhat? said:

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Can Gov. Greg Abbott eliminate property taxes? Maybe with sky-high sales taxes.

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However, unless paired with significant cuts in spending, any reduction in property taxes will have to be made up with tax increases somewhere else. Some advocates haven't been shy about this reality. Abbott even briefly championed the idea of replacing all property tax revenue with higher sales taxes.

So we put that idea, replacing all property tax revenue, to the test at the Baker Institute for Public Policy's Center for Tax and Budget Policy and examined how much the sales tax rate would have to increase to replace the current property tax revenue. The results are dramatic.

Local governments in Texas collected $82 billion in property tax revenue in 2023. In order to replace that revenue, our calculations indicate that the state sales tax rate would need to be raised to 22%. Texas' sales tax rate is currently at 6.25%, and local entities can increase it to 8.25%.

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How high would you be okay with seeing sales taxes in Texas go in order to eliminate property taxes?

For myself, doing some quick math, increasing the sales tax to 22% would, with near certainty, increase my overall tax burden even if my property tax were completely eliminated.

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Abbott is all talk and no action. He will shift the blame to local governments whom he claims he cannot influence.

stallion6 said:

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waitwhat? said:

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Can Gov. Greg Abbott eliminate property taxes? Maybe with sky-high sales taxes.

Quote:

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However, unless paired with significant cuts in spending, any reduction in property taxes will have to be made up with tax increases somewhere else. Some advocates haven't been shy about this reality. Abbott even briefly championed the idea of replacing all property tax revenue with higher sales taxes.

So we put that idea, replacing all property tax revenue, to the test at the Baker Institute for Public Policy's Center for Tax and Budget Policy and examined how much the sales tax rate would have to increase to replace the current property tax revenue. The results are dramatic.

Local governments in Texas collected $82 billion in property tax revenue in 2023. In order to replace that revenue, our calculations indicate that the state sales tax rate would need to be raised to 22%. Texas' sales tax rate is currently at 6.25%, and local entities can increase it to 8.25%.

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How high would you be okay with seeing sales taxes in Texas go in order to eliminate property taxes?

For myself, doing some quick math, increasing the sales tax to 22% would, with near certainty, increase my overall tax burden even if my property tax were completely eliminated.

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Abbott is all talk and no action. He will shift the blame to local governments whom he claims he cannot influence.

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Seems misplaced. Democrats and rural Republicans fought vouchers and Abbott which were seen as the death knell for public schools. Moving away from property taxes will be seen as an even worse death knell for public schools.

This isn't all on him and is absolutely on local governments who will have to get on board and knowingly support a plan that completely removes a known, predictable funding stream that they have direct control over.

Good luck getting these folks to give that up and then on top of that tell rural communities that distribution of funds will now have to have depend on the state to ensure "equitable distribution"

i am almost certainly to your right on every major political, religious, and moral issue. or, more accurately, my views don't map to the modern left-right spectrum because it is predicated on a worldview i don't share

i'm not saying anyone "should" move out of their home, people can live wherever they like. there seems to be some confusion here.

setting aside the wisdom of what we're spending - a different issue, i think you'll agree - the question is how do we fund the government services the people want in the best way?

if we look at consumption vs property taxes, property taxes are better for society for reasons i outlined above. they may be worse for any particular individual.

those particular individuals - people who have small expenditures, but large properties - would out of self-interest prefer a large consumption tax and little or no property tax. unsurprisingly, the older generation right now who 1) hold the most wealth and 2) are the wealthiest generation in US history out of self interest would seem to benefit from such a setup, particularly because much of their wealth is tied up in the increased value of their property.

there's a societal-level cost to this: inefficiency in use of property. this isn't a statist argument, it is a market one. if you were going to run this like a massive market, the analogy would be an interest rate. efficient use of capital is tested against other possible uses. the interest rate determines both the good and bad investment, and returns test one good vs another. IF cash in the bank couldn't be loaned out and put to productive use as capital, the hoarding of capital would have a negative societal cost because it would reduce liquidity in the system. a society-scale fix for this would be to charge tax - or a negative interest rate, if you like - on cash deposits. (this is obviously oversimplified because of fiat and inflation and fractional reserve lending)

anyway, since property can't be used like that, people sitting on property has a societal cost in terms of scarcity. i'll see your "golden years" couple and raise you a foreign billionaire or hedge fund group. what if a billionaire or hedge fund (or both) buy up huge amounts of property and do nothing with them? there is an invisible societal cost to this - prices go up. it's not different if one person does it with one home, it's only a matter of scale.

it's better for society for that asset to be put to productive use. just like its better for the market for capital to go to its best use: where it gets its best return. "society" doesn't measure returns in dollars (or it shouldn't) - it measures return in the Good. this gets sticky because "productive use" requires a kind of shared vision of the Good.

property taxes are good for society because they impose a carrying cost that disincentivizes people from sitting on property in a way that provides no benefit to society, and in fact costs in various ways. returning to the market analogy: charging a high interest rate weeds out bad investments with low returns. high property tax rates accordingly disincentivize inefficient use of property. in the cast of a homeowner, a person who actually needs a large house will pay for it; a person who doesn't, won't. or they will - it's a free country, people can spend what they like on whatever they want.

ok, the other side is the kvetching about property taxes and wanting "relief". i am fine with flat rates - that's "fair". but then you can't turn around and say i want flat rates for everyone but me, because i'm over 65 and on a fixed income. that's not "fair". if you're on a fixed income and you can't afford the big home you needed when you were younger, there's no reason for everyone else to subsidize your inefficient use of the property by offering you a tax break. then society pays twice! - once because rents go up, twice because the tax burden is shifted to other property owners.

then we come to the example that tugs at the heart-strings. what about the poor old couple who has nowhere to go, and they don't want to get evicted? yeah - i think that is something we as a society should handle. which means that should be a kind of charity, to go to those who need it and have no other options. no place to go, and to whom the tax is a real unbearable burden. i'm a christian, so i look to the scriptures for my moral framework. i see no moral or societal benefit to allowing a rich man who lives in a rich house to shed his tax burden on a property he chose to purchase and continues to chose to own simply because he's old. he doesn't need charity; he should be giving charity.

none of this is me telling people anything. and quite the oppose of "people wanting to be treated as others" the whole crux of the matter is that people dont want to be treated as others. they want to be exempted from property tax that others pay, or have their rates frozen, simply because they're old. the ONLY reason that has political support is because of the split in the age cohort.

Given their has to be some form of taxation, I prefer taxes that are transaction based. You make income, some taxes are due. Or you buy something, some taxes are due.

Property taxes are due every year even though no transaction has taken place. They are a wealth tax, a tax on a value. I do not favor a tax on wealth, not on real estate, not on your stocks and mutual funds, not on your IRA or 401(k), etc.

School Districts acct for 75% of property taxes. These local districts need better management.

mustang1234 said:

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School Districts acct for 75% of property taxes. These local districts need better management.

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Know who essentially manages that tax rate? The state does. Not the school board.

And yet the state (Abbott in this case) is saying that they (the local taxing entities) are out of control and need to be under better management and that he'll do a better job handling it.

My only nitpick is with bold below. My home is a small portion of my net worth but still has the highest cost to carry so I don't think the bold is a valid point. Owning a home in Texas is going to cost a lot regardless of how much you are worth overall. As I type this, I realize this sounds like a humble brag and I don't intend it to be.

Just trying to make the point that housing is expensive here because of our tax system. But I already posited that I believe the current system is good for when you are working, but less so once you retire if you need to be a bit more disciplined about cost management.

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those particular individuals - people who have small expenditures, but large properties - would out of self-interest prefer a large consumption tax and little or no property tax. unsurprisingly, the older generation right now who 1) hold the most wealth and 2) are the wealthiest generation in US history out of self interest would seem to benefit from such a setup, particularly because much of their wealth is tied up in the increased value of their property.

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I won't quote your wall of text. Mine will be long enough. :-)

We agree that the rules should be the same for everyone.
We agree to the societal cost of poor property tax laws (California, 'nuff said)
We disagree (I believe) on the concept of equity.

There is nothing wrong, imo, of giving seniors a break. (logic below)
It's not the guys like you and me that need it, but consider middle and lower middle, spending more than they make, medical issues... Most don't want to throw them out of their houses because they can't pay property taxes. Which is likely for these guys because they have little to no investment income and frequently little savings.

For whatever reason, the most fair method (letting the couple live in the house, then recapturing after death) is seen by many as bad. I suspect part of that is the high penalty/interest rate imputed, partly "lost" inheritance... but whatever.

So now we are down to cutting seniors a break. Your suggestion was "means testing" this. I am totally opposed to this, and I suspect I am in the majority here (F16 board + Texas).

You imply that giving seniors a break is not fair. I say, only if you look as age as a static descriptor, but of course it is not. We all either get older (or die) so eventually we all get the opportunity to get the break. Yes, you may die but many will never get a chance to take it (renters).

And I say finally, that this is not a huge additional deviation from economic efficiency. The public just voted to increase (too much, imo) so it seems to be popular even though by your eyes it is unfair.

Market efficiency is an ideal, but not the only goal. Otherwise we would have no homestead deductions. Which you could promote, but I think you'll be pretty lonely.

i was pointing out that baby boomers net worth is frequently illiquid, tied up in their home. so it's a double burden on them in a way, because while they have the wealth, the tax is hard on them.

as for your situation, it doesn't have to be that way. expensive property taxes come from living in a nice or big house, in a nice neighborhood, in a good school district or zoned to good schools, close to good jobs, and in a good city. those raise values, and the tax rate just pushing that price signal back on the owner.

if you need to be more cost disciplined, the system isn't "bad" for telling you that you're paying a premium for things you perhaps no longer need (proximity to work, as large of a house, schools, etc).

you can't say that the rules should be the same for everyone and in the same breath say they should be different for seniors.

you point to people spending more than they make, but this is just rank paternalism. and you call me an elitist?

"we'll all get old someday" assumes a static framework. obviously that's not the case, since generation sizes aren't the same, the rules are malleable, and we're talking about changing them. in other words, we're setting up a situation for a group that controls a large portion of the real property to substantively reduce their tax burden. and you say it's fair because a) the inheritors of the property will pay the debt for them later and b) the people who shoulder the burden now can roll it downhill to their children later? forget unfair, that's is just gross selfishness.

if we're talking about preventing people from being made destitute or homeless by taxation, then we're talking about exceptions for reasons of need. because if you're rich, taxation on your property won't make you destitute or homeless by definition. means testing is inherent in that framework. wealthy people shouldn't get charity from the state.

Nobody should get charity from the state because it comes from other taxpayers that have zero choice. Charity implies choice.

sure, in principle i agree, but i also don't have follow any kind of categorical imperative here.

giving poor seniors a break in property tax to avoid making them destitute or homeless is a kind of charity from the state one way or another. i don't have a problem with it. i wouldn't personally execute an eviction order for a 90 year old widow because she couldn't pay her tax or support anyone else doing it. that's a specific evil in the christian worldview.