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Re: [Phys-l] Taxes



The reason for Prop 13, or any taxpayer revolt is mostly because of the
inherent unfairness of property tax. If I make the same as my peers and
live a frugal life, I can amass a considerable fortune by sensible
investing. I can then buy a house later in life that is worth quite a
sum. If my peers, on the other hand, waste money on buying new cars
every year, gamble, buy luxury items and replace them often with newer
models, they end up affording a much smaller home. Yet I'm hit by absurd
property tax bills while they do not - on the same income. Why should my
choice of how to spend my money allow government thieves to steal my
assets and redistribute it to others.

The poor are poor simply because of their attitude toward wealth. I have
absolutely no sympathy for someone who chooses to be poor in a country
with the opportunities available here.

Taxes for defense, education, and infrastructure are necessary, but the
rest is simply passed along to people who don't deserve it because they
sacrificed the chance to amass wealth for short term satisfactions.

Bob at PC

-----Original Message-----
From: phys-l-bounces@carnot.physics.buffalo.edu [mailto:phys-l-
bounces@carnot.physics.buffalo.edu] On Behalf Of Shapiro, Mark
Sent: Monday, March 03, 2008 4:44 PM
To: rbtarara@sprynet.com; Forum for Physics Educators; phys-
l@carnot.physics.buffalo.edu
Subject: Re: [Phys-l] Taxes

Dear Rick et al.,

A comment or two about California's Proposition 13 from someone who
lived
through it.

First, Prop. 13 was pushed not so much by homeowners but by businesses
and
apartment house owners. They managed to convince homeowners that
their
property taxes were too high and rising too fast, but they were rising
only because the value of their houses was rising fairly fast.

Prop. 13 was structured in such a way that property tax rates were
reduced
somewhat initially and annual increases in assessed value were capped
at
about 2% regardless of the actual increase in value so long as you
retained ownership of the property. However, when you sold your house
the
taxes the new owner would pay would be based on the market value of
the
house at the time it was bought.

The reason that businesses and apartment house owners pushed this
Proposition was that they knew that residential property changed hands
much more frequently than commercial property. Thus, over time they
knew
that the bulk of the property tax burden would shift from business
property to residential property. The biggest beneficiaries of Prop.
13
have not been homeowners but large commercial property owners such as
Pacific Gas and Electric, Southern California Edison, other utilities
and
railroads because they hold their real property for decades while the
average home in California is resold about every five to seven years.

This has led to great inequities for homeowners. For example, I've
lived
in my house since 1970. My property taxes are about $900 per year on
a
house worth about $550,000 in today's market. My neighbor across the
street, pays about four times as much in property taxes as I do for
the
same value house because he bought his house much more recently.

In addition because the property tax basis was reduced so much by
Prop.
13, funding for education had to be shifted in large part from local
property taxes to other taxes such as the state sales tax and the
state
income tax. Since the sales tax is highly regressive -- low and
middle
income people pay a much larger share of their incomes in sales taxes
than
do wealthy people, businesses and large corporation -- low and middle
income people have ended up paying a much bigger share of the bill for
education than they should.

Regards,

Mark Shapiro


-----Original Message-----
From: phys-l-bounces@carnot.physics.buffalo.edu on behalf of
rbtarara@sprynet.com
Sent: Mon 3/3/2008 12:47 PM
To: phys-l@carnot.physics.buffalo.edu
Subject: Re: [Phys-l] Taxes


Trying to reply via web-mail from a dial-up machine has been
frustrating--
but will try again, even if this is mostly off-topic.

John, what's really different about deferred taxes and captial gains
taxes? Don't know if the states can grab a piece of that pie--but
sounds
like it is basically the same idea?

Bernard--If you don't feel you are paying enough tax, please feel free
to
send some extra to the powers that be. Maybe you should run for
office on
a platform of MORE TAX---but please wear your kevlar vest!

Seems to me (and others) that there are only two 'fair' taxes. INCOME
TAX--you have to have income to be able to pay tax. Holding property
provides ZERO guarantee that you have money available for taxes. Of
course income has to be ANY income coming to you from any source.
Then
you have SALES TAX. If you have money to spend, then some of that
spending gets taxed. The advantage to this kind of tax is that you
can
exempt some basic needs (basic foods, some base level of energy needs,
etc.) so as not to unduly penalize the 'poor'. You can save your
money
without penalty, but when you go buy all the useless and/or expensive
stuff that powers our economy--you get taxed. Everyone pays through
the
sales tax, and in my mind that is good. Having a large percentage of
the
population paying little or no tax is not healthy in that those people
have no real ownership of the government. Through shear numbers they
can
maybe vote in people who will hand them more services, even mone
y, but they have put nothing in. Sales taxes give them some
ownership.

Now whether or not to mix the two, have one or the other, have
graduated
income taxes or flat taxes, how many entities--federal, state, county,
city get a piece of you, is all food for political debates--and not
much
to do with the list. Property tax--which usually is used for
schools--is
fair game, but is hardly fair taxation. It often works out that those
getting the fewest services end up paying the biggest piece of the pie
and
with apartments usually taxes way lower than houses, the burden is
often
not shared at all fairly. I will also argue that there really are no
business or corporate taxes. Those all end up being paid by
individuals.
OK, if a company does most of its business overseas it may look like
someone else is paying the freight, but surely foreign companies
exporting
to the U.S. are paying their taxes with consumer dollars as well.

I don't know the details of Prop 13 but let me guess that part of the
problem with the taxation was the ridiculous inflation of property
values
in California (whole West Coast--East coast too for that matter).
While I
have little sympathy for someone who pays a million for what would be
a
200k house elsewhere, I do sympathize with those who bought the 200k
house
and now find it taxes as a million dollar property. That million
dollar
value is useless unless you are willing to sell and move, and I
suspect
many are not.

Last summer visited my grad school mentor and he recently retired
after a
carreer in San Jose California and moved to Sharp's Chappel
Tennessee--
BECAUSE of taxes. So some California people might argue with being
undertaxed. Property taxes have caused a serious revolt here in
Indiana
and the legislature is currently trying to pass a cap (1% of assessed
value) with a 1% increase in sales taxes because of the uproar. In
other
words--raising property taxes anywhere is not going to win you
friends.

Too long and too off topic, but I'll try and send this anyway.

Rick

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Forum for Physics Educators
Phys-l@carnot.physics.buffalo.edu
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_______________________________________________
Forum for Physics Educators
Phys-l@carnot.physics.buffalo.edu
https://carnot.physics.buffalo.edu/mailman/listinfo/phys-l