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Comment by aphextron | Hacker News Reader

>"Cheap real estate"

And the highest property tax rate in the nation.

Because of the highest property tax in the nation.

This is a feature, not a bug. It’s very difficult for the wealthy to hide their property. There are also a number of ways to reduce the tax rate on one’s primary residence. Combined effect of this is surprisingly progressive, closer to a wealth tax.

Another effect high property taxes, is that most existing homeowners feel some pain when real estate prices soar and therefore there is a large contingent of voters who want to make sure that supply keeps up with demand so that their taxes don’t go up.

By contrast, where I live (in San Francisco), the existing homeowners make out like bandits when the government policies are punitively exclusionary towards outsiders. Soaring home prices mean nothing but good for homeowners when their taxes are both very low and virtually frozen at the original purchase price by prop 13.

Don't forget the joy of parcel taxes, city and county sale taxes, and other ways of bleeding you out to make up for the people who aren't paying their fair share because of Prop 13; which you still have to pay even if prop 13 doesn't help you because you were born in the wrong decade.

Pricing people out of their own homes they used to be able to afford is "fair"?

I'm struggling to see how someone who got $1MM+ in free equity would be priced out of a home they could previously afford; or how the current system that prices people who grew up here out of the entire area is somehow more fair.

Work your whole life and live in a moderately priced home. Housing prices around you drastically shoot up for reasons outside of your control while you're in your 60s. Not fair to be forced to move at that point I think.

It's a good thing you're not forced to move at that point, then. If your home value goes up, you've got a lot more equity you can borrow against. There are many investment vehicles at that point that are very low risk and will cover the meager 1% property tax (less in CA) you'll be paying.

Higher tax rates, but fairer than California. Your neighbor isn't paying lower taxes than you just because they bought 10 years ago when the property was cheaper.

High property taxes are one of the most liberal policies of Texas. It's a progressive tax that is largely shouldered by rich landowners and the revenue form a large part of budget for public school systems.

I'm not sure why people in California love our regressive Prop 13 tax rebates that largely benefit the wealthy and are a cause of huge budget deficits. Prop 13 is the most Republican policy we have in our state.

If high property taxes are liberal - why wouldn’t high taxes on other forms of wealth be beneficial?

When did I say high taxes on on other forms of wealth wouldn't be beneficial? I totally support taxes on wealth to build social programs.

Does that include taxing employee equity based on how it is valued based on each round of funding?

Would you also be okay with taxing someone based on how much they had in savings and mutual funds?

> Does that include taxing employee equity based on how it is valued based on each round of funding?

This already happens, except as a tax on income rather than wealth. Exercising options in a private company that has increased in value will result in a tax bill. And you can't sell shares to pay that bill (usually) because the company is private.

That’s exactly my point. Property tax is a tax on wealth. You are not taxed on options until you exercise them. You also can’t sell part of your house to pay taxes on it. You also aren’t taxed on the increase in your stock portfolio until you sell it.

I think equity, even relatively illiquid equity, should be wealth taxed (at least on amount >$50m). I am sure there will be novel financial tools to provide liquidity to pay this tax if this was the case. At the same time it might discourage bubbles in valuations (eg weworks).

Why carve out equity that should have a wealth tax associated with it differently based on the type? I would think that intellectually consistency would demand that either we tax all equity based on unrealized gains the same whether it is stock, equity in a business or real estate property.

I am not carving out equity. I think everything should be wealth taxed. I also think there should be a large deductible.

Except property taxes for landlords are lower. Multi-family residences have a much lower property tax rate. A neighbor left the extra front door on his home as he remodeled just to keep that massiv discount.

Edit: This is just another example of supposedly progressive rules that create a nice safe wall between upper middles and don't have to works.

That's all relative because there is no state income tax so if you are a high-income person then Texas is paradise, even with high property taxes. Also guess who makes all the executive decisions in terms of where to put the jobs? Executives aka rich people.

Fair point, but my wife and I bough at $1600 sqft home on a nice large lot in a decent neighb when we were in grad school (College Station, TX). We paid $120K and had P+I of $400. Sure, taxes added a couple hundred bucks, but it was still a fraction of California. We interviewed at Livermore labs during that time and the same home was about $1M.

We stayed here (she still at university as a professor), and I left to co-found a startup. Still pretty cheap real estate, affluent & educated population (of all political leanings), and endless supply of smart folks to hire. And BBQ. I'll take it.

Though I love California too, just returned from a week in Big Sur and then the wine country. It's just must cheaper to visit :)

Isn’t Prop 13 an enormous issue (with real estate owners not paying taxes on the true value of their property) in California?

Prop 13 basically just limits increases in taxes from purchase time. So it benefits existing land owners at the expense of future land owners.

And it also benefits speculators - makes it cheaper to hold onto property for longer.

It's in the top 5 but not the highest.

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