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Comment by ceeplusplus | Hacker News Reader

Sure, but if you're going to compare taxes you have to compare the effect of Prop 13 on property valuations, as that's basically a tax but with the revenues going to existing property owners rather than the state.

> but my experience living in TX is it is definitely not a low-tax state

Dunno, I'd take property taxes (i.e. taxes on consumption of real estate) over income taxes. Particularly since income taxes are progressive whereas property taxes are a flat percentage. Even if I paid $2k/month in additional property taxes, the difference in income taxes would still make TX cheaper.

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Including prop 13 as a tax is extra, like including private school as a tax in places where the schools are bad. Possibly relevant to cost of living, but not a measurable tax.

The killer with high property taxes is that you have to keep earning more as your property increases in value, or there is a real risk of you falling behind. Similarly if you are ever unemployed you might prefer a tax proportional to your income. Obviously this also makes retiring early even more difficult. But there’s a system to suit every need, I guess.

> The killer with high property taxes is that you have to keep earning more as your property increases in value, or there is a real risk of you falling behind

Not if the municipality has a fixed budget and all property values are rising in the municipality. The mill-rate changes so that you only pay more taxes if your property has gone up relatively more than other properties in your municipality. See thread here: https://news.ycombinator.com/item?id=32528916

Also if your property value has gone up, you have gained equity, so that may offset increased taxes (depending on divers factors).

> Not if the municipality has a fixed budget

In an area where property values are rising, other costs typically increase as well. Municipalities can't often provide the same services on a fixed budget any more than businesses can do so.

> Also if your property value has gone up, you have gained equity, so that may offset increased taxes (depending on divers factors).

This doesn't help unless you borrow against the increase in equity. Otherwise it just means less money in your pocket monthly.

> The killer with high property taxes is that you have to keep earning more as your property increases in value, or there is a real risk of you falling behind

That's a feature, not a bug. The entire reason California's real estate market is so dysfunctional is that people are disincentivized from selling due to Prop 13, so you have people living in oversized houses paying a tiny fraction of the property tax their neighbors are.

You "falling behind" means someone else gets a fair shot at living in the area without being disadvantaged by a 10x higher property tax.

Ideally the property would never increase in value in the first place, because we'd build enough housing to prevent that.

>Ideally the property would never increase in value in the first place, because we'd build enough housing to prevent that.

This is the key takeaway from all of my experiences reading about and owning property. We'd all be much better off if we built a ton more housing, but that doesn't fall within the Overton window and so likely will not happen.

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