Tangentially related: I wonder what will happen in SF/NYC when more of the office leases have expired and the corporate property tax base erodes? How will the cities fund themselves?
Presumably by hiking residential tax rates and converting office space to residential, but the latter could take a long time…
the last City and County of San Francisco budget I was aware of, was more than $1B for one year.. that is 'B' billion. And, good luck with your accounts receivable invoice for services rendered, small business.. more than one year to settle on a contracted service worth about $600k at the time, with no disputes. first hand story
do not hold your breathe waiting for SF/NY to run out of money somehow
> I wonder what will happen in SF/NYC when more of the office leases have expired and the corporate property tax base erodes?
Large metropolises will manage potential budget shortfalls how they will.
More importantly, after large commercial leases expire, commercial property owners and their management companies will adjust their commercial rents until companies and institutions find value. While some concerns go remote-only, others will implement hybrid or even full RTO. The price and associated tax revenue on these commercial leases will stabilize and, more than likely, increase as the economy increases.
The expiration of corporate leases will not usher municipal financial apocalypse as many observers seem to speculate. Rental market corrections unavoidably will lag pandemic economic contraction (leases take time to expire) and such contractions hardly signal the end of commercial and corporate interests in renting urban real estate.
"Thus, in New York, the median employee in the stock market sector who earns $440,000, according to the State Auditor’s Office"
As someone who works in this sector, this does not look True. An investment Banking VP with 10+ years experience at a bulge bracket probably brings in this much in income however this is not the median worker. There is a huge workforce of admins, Ops, legal, IT that work in the sector and bring it down. Also there is a large amount of burnout/turnover/layoffs in these jobs so that in any given year someone is not getting their full bonus.
This article is pretty vague, and in fact down right sloppy when it comes to making numeric comparisons. It casually mixes up taxable income with gross income, which are two significantly different things (tax rates only apply to taxable income). Then it talks about population losses from cities, without taking into account those who remained in the same state, or losses due to coronavirus fatalities. It casually tosses out claims like "New York, where the cost of living is exorbitant" yet nowhere does the article compare cost of living in New York state vs other states, since the article is actually about taxes.
There's more, but I'll leave with this contra-article. California is indeed a high tax state for the very high income people, but it's actually very reasonable for middle and lower class income earners.
"Yes, Texans actually pay more in taxes than Californians do"
Exactly. You can't compare taxes across states if you're only including income taxes but excluding property taxes. Texas property taxes are ~2.5% for me (and they adjust annually), while CA property taxes are (famously) capped at 1% of the purchase price.
Zillow home value index is not accurate at all in my experience. And Texas does not require property sale prices to be public, unlike most other states.
I do not understand how this can be true, given the vast differences in government expenditures across the nation, especially due to things like water and energy costs, maintenance costs from freeze/thaw cycles, and the elephant in the room, underfunded government retiree benefits such as defined benefit pensions and retiree healthcare.
Also, I would much rather pay a higher nominal property tax because my property is worth more than pay a higher nominal property tax because the property tax rate is higher.
>The government spending grows to fit available revenues
This is trivial from the fact that the government is not a for profit entity.
>and available revenues grow to fit whatever the taxpayers can still bear
This is also trivial because taxpayers and voters sufficiently overlap.
However, some governments have borrowed more from the future than other governments, and just like a business with more debt service has less to spend on other expenses and/or has less profit, a government with more debt service has to spend less on infrastructure/services and/or has to increase taxes.
But my point is more that governments (ideally) collect taxes based on projected spending (a budget), so of course spending will roughly match up with collection. Although, in reality, governments spend far more than they collect via off the books retirement benefits for government employees.
Haven’t heard about it before, but this sounds great, not sure why it’s infamous. Sadly, though, things like that overall very rare, hence why I said “almost never”.
> But my point is more that governments (ideally) collect taxes based on projected spending (a budget), so of course spending will roughly match up with collection.
I think it’s the other way around: the budget is planned around expected tax revenues, instead of tax revenues being planned around budget. This is actually a huge difference: when there is a revenue windfall, extra funds are spent on pork or vanity projects, instead of returning them to people who they were taken from.
As an Oregonian, I think the reason it’s infamous is that Oregon schools are terrible and many people blame the kicker for taking surplus budget that could have been spent on schools and giving it back to the taxpayers instead. It also gets a fair amount of criticism for proportionally distributing funds based on how much a person paid in taxes, so the wealthiest get the most money back.
Can’t say how much the kicker really does impact these things, but I can say that when you compare state funded resources between California, Washington and Oregon, Oregon’s usually come out looking worse. For example, if you take a road trip up i5 from Los Angeles to Seattle, you’ll notice that the rest stops in Oregon are far worse than those in California or Washington. It does seem that there’s an austerity in Oregon absent in those two states, and I can’t help but wonder if it’s imposed by the requirement to send back the surplus.
There is basically no significant correlation between school spending and performance. If anything, worse performing schools tend to be better funded on average. Thus, there is no reason to expect that increased school funding will translate to better performance. I hope that it makes you feel slightly better about the surplus tax not going to schools.
As for austerity, given the between-state variation, what money is spent on is way more important than how much of it is available. As it turns out, Oregon actually rakes in more money (per capita) in state and local taxes than Washington, so one should rather expect Washington to be the austere one. In fact, Oregon could send every resident a check for $1k every year, and still have 10% more money available per capita than Washington. That’s why I’m rather skeptical about governments claiming to need more money in order for X not to suck: first I want to hear an answer to “why X sucks less in state Y, which spends less money on X than you?”.
That would result in deflation and deflation would require negative interest rates. Germany had a debt brake before the pandemic and their interest rates were the lowest and even negative on government bonds. The same is true of other countries like Switzerland.
If you want your government to stop the endless debt expansion you're going to need negative interest rates.
~2.8% for me! And that pie gets bigger every year, even with appraisal protests, my property value is outpacing inflation (9% gains per year). Income taxes are relatively fixed to your salary at least. My property tax (and sales tax) bill grows annually.
While pay taxes is a pain, having a society where people pay different property tax rates creates many problems. Imagine not wanting to move near your new job because your monthly property tax bill would double. Many of California's problems are related to prop 13. At least they recently removed the provision that you could pass your low property taxes down to your children and grand children. We were building up a nice landed aristocracy. Corporations, of course, can live for a very long time and are also covered by prop 13.
I get, maybe somewhere between. I see your nj username, you probably know what its like for people once retired paying $20k for property taxes, its a big temptation to leave.
> Imagine not wanting to move near your new job because your monthly property tax bill would double.
Imagine having to move because your monthly property tax doubled.
Our property taxes are assessed every three years, and the price of my home has gone up significantly in the four years since I bought it. These are unrealized gains; my income has not gone up a penny. But, when the assessment is made, my property taxes will skyrocket.
Imagine having to pay more for bread. Or milk. Or anything else.
It is simply inflation. If we accept it in all other places of life, and renters are expected to accept it, why should land owners not be expected to accept it?
If your income has not gone up in 3 years, and the purchasing power of the currency you earn income in has gone down, then you simply have to accept you will be able to purchase less. Or figure out a way to make your income go up.
Also, participate in city/county/state governments and elections to make sure current leaders are limiting excessive spending from future taxpayers’.
The difference with property is that its not a consumable. In an ideal world you pay off your mortgage then you dont have to worry about housing costs much, allowing you to budget on real expenses for things you consume. If you buy a house and then the area gets more popular and expensive should you pay more even though its the same house? This is especially important for retirees. Worse if you lose you job you stop paying income tax but you have to pay property tax still. I get it if you're a regular worker paying rent its a different world but hopefully one day you'll understand.
> I get it if you're a regular worker paying rent its a different world but hopefully one day you'll understand.
Understand what? Why would I think certain portions of the population should be exempt from certain types of inflation?
Life is consumable. The utilities, streets, city hall workers, inspectors, everything that makes the world go round. Everything decays and needs to be brought back to order, over and over again.
If the argument is that poorer people should get assistance to not be so poor (including retired people), then sure, give them cash. But I do not see why a retiree should get any more consideration for where to live than a poorer immigrant family who has not had the opportunity to save a down payment and has to rent.
I'm not sure what we're arguing about here. I dont live in CA, I said I was jealous of Prop 13. I think there are benefits to capping property tax rises. Only a quarter of households rent and I support any measure to help everyone buy.
I understand it is a big problem. It would be great if when property values shoot up then the rate would be reduced, keeping the payment about the same. Have the revenue go up a little over time.
Property taxes mostly pay for schools. I read a story about funding schools in Utah. The way it was done in this district was that the district was responsible and could be trusted not to waste money. They figured out what the budget they needed each year, it was approved, and then the tax rate was set to cover the budget. This would be a great situation to live in because when property values go up a lot over a few years but the cost to run the schools don't go up much, the school district lowers the tax rate instead of trying to find ways to spend all the extra money they are getting.
That article isn't too convincing since they claim that most of the reason for Texas having a higher effective rate for lower income is sales and excise tax - but the sales tax is 9% in California and 6.25% in TX (~8% with local taxes), not to mention gasoline taxes, etc.
Property taxes are higher, but housing prices are lower in TX than CA. From what I've seen they are a bit of a wash (tax rate is double, but housing prices are 50% or less).
And in the methodology section it says "The report also includes the effect of indirect consumption taxes: the sales and excise taxes that are paid initially by businesses rather than individuals". So it looks like they assumed those taxes are passed through to consumers when in fact they aren't, at least not 100%.
"Property taxes are higher, but housing prices are lower in TX than CA. From what I've seen they are a bit of a wash (tax rate is double, but housing prices are 50% or less)."
This was true years ago, but the cost of housing in Frisco TX and San Diego CA are about the same now. If anything, San Diego may have an edge because it has many older, smaller properties that keep the overall cost down compared to the newly built up mcmansion land of Frisco.
That contra articles is very deceiving. The cited data most certainly do not say that “Texans actually pay more in taxes than Californians do”. This is very much false, so false and contrary to common knowledge in fact that you should have went back and asked yourself “wait, is it actually true, or is someone trying to pull a fast one on me?”.
Here is the crux of the issue: the graphs and the source do not say that the non-wealthy Texans actually pay more money in taxes. Instead, they contribute higher share of total tax revenue. This is not the same thing as actually paying more in taxes.
Imagine a state where every single residents pays exactly one penny in taxes. In that state, bottom 20% pay exactly 20% of the tax revenue, and top 1% pay only 1% of the tax revenue. By the article’s logic, in that state the non-wealthy residents would pay even more taxes than the ones in California. It is, of course, absurd.
You cannot look only at the shares in the revenues, you need to also look at the size of the revenues to judge. As it turns out, Texas pulls in around $8.6k per capita in state and local taxes, compared to California’s $13k. That means that even though middle 60% of Texans contribute 10% of the revenues, compared to 9% of revenues contributed by middle 60% of Californians, they actually pay a third less in taxes in actual dollars.
In short, the article is pure misinformation, deceiving people for political gain, typical for today’s media. Where are the fact checkers?
It's even worse than that, nearly the entire difference cited is based on property taxes but they use a property for comparison that doesn't exist in California, but does in Texas. As a percentage of home value, property taxes /are/ higher in Texas, but home values are also massively lower (1/3rd or less) in almost all of the state, which means that /actual taxes paid/ for property tax are nearly identical to sometimes less in Texas, /and/ because housing is cheaper, it's more affordable to actually own a home instead of renting forever at lower income quintiles.
Anyone who actually looked at the data and concluded that living in California instead of Texas was a better financial deal for someone who is not a high income earner is either stupid or lying.
Definitely true. As a tax lawyer I've met plenty of Californians moving back to CA from TX because the promised land of tax salvation was actually more expensive, and plenty of Texans who moved to California excepting tax shock and were pleasantly surprised when their total tax bills were several thousands lower in CA.
In addition to paying more in taxes in TX, they got less in government services for the taxes they did pay, insanely invasive government, and had to pay more for generally everything except beef (which is great if you love steak).
> and plenty of Texans who moved to California excepting tax shock and were pleasantly surprised when their total tax bills were several thousands lower in CA.
Can you explain to me how is this possible? Like, an realistic example scenario.
Housing in Austin is the same price as it is in the LA area but our property taxes are way lower in CA thanks to Prop 13, so even with state income tax you come out ahead in SoCal. This is true even with the SALT cap, though single income earners will not see as much of a benefit moving to CA.
Also, the FUD about CA income taxes always ignores the calculation of tax liabilities in a progressive scheme, so the tax burden is always wildly overstated.
OTOH, if you're willing to move to less nice parts of TX you will save money on taxes compared to CA. But you'll find out pretty quick why housing is cheaper there.
> Here is the crux of the issue: the graphs and the source do not say that the non-wealthy Texans actually pay more money in taxes. Instead, they contribute higher share of total tax revenue.
Did we read the same article? Because that isn’t what it said, look at the graph again:
Yeah, the numbers are extremely sloppy. Even for the basics, like coming up with the marginal tax rate in NY, he uses the top federal, state, and city income tax rates and adds the social security tax to that.
But the top federal tax bracket starts at $540k and the Social Security tax cuts out at $142k, so if you're paying one on marginal income, you're not paying the other.
I agree they shouldn't have put the 53% marginal claim right next to the social security point, as the max-marginal people will be well past the cap, but the 53% max marginal rate might still be true?
37% federal + 1.45% FICA (medicare) + 0.9% medicare surtax + 10.3% NY state + 3.8% NYC = 53.4+%
He does use or mention a lower effective tax rate. Even though he points out a 53% on-paper tax rate, he mentions 42% as the effective tax rate in the next paragraph. This does seem closer to the truth.
He also specifically says that case-by-case numbers are more complicated and vary, so it's not fair to argue that the numbers are extremely sloppy. He has made an attempt to use well-researched average numbers that appear to rely on actual rates people pay, not the theoretical marginal rates. Mentioning the marginal rates is a rhetorical device he uses, not the rate he uses to illustrate the scenarios.
The numbers are more than sloppy, they are (technically) flat-out wrong. New York State imposes income tax on out-of-state workers based on a convenience of the employer test. (The law was passed when workers started leaving NYC for nearby states when people discovered they could work from home before the pandemic.) So in many cases, even if you don't work in New York, you still get to pay New York State income tax, unless you check a bunch of (rather arbitrary) boxes.
The law itself, IMO, should be struck down by the interstate commerce clause. Additionally, it's the wrong fix: if New York wants to retain citizens, they should reduce the tax burden to compete with neighboring states, not attempt to legally overreach and clutch money as hard as they can.
> should be struck down by the interstate commerce clause
I’m not sure I understand why you suggest the interstate commerce clause. But regardless, didn’t the Supreme Court refuse to take up the case earlier this year when New Hampshire unsuccessfully sued Massachusetts over this same issue?
It seems that the concept is allowable, at least according to current law.
Non-objective arguments. The regions that the people are moving away from seem to be high cost of living regions. The regions that they are moving to seem to be low cost of living regions. Tax does not seem relevant there.
Tax is just one part of the cost of living picture. A couple percent state income tax difference isn't really a big deal with the feds take a much bigger cut but when you consider the long tail of $6 gas, sin taxes on your smokes, tax on prepared food, government fees, etc, taxes can add up to a noteworthy fraction of said picture.
After speaking with many people in and around real estate in TN,it seems that a move to Nashville from CA / Chicago, NY, etc. could save quite a lot in taxes.
Yes the cost of living is lower, yes you can get a house with yard for the price of an apartment, food is cheaper, etc..
However for many leaving there for here, eliminating state income tax, and especially with SALT tax thing that changed some years ago ( https://taxfoundation.org/tax-basics/salt-deduction/ ), they seem to save $30,000 in taxes (?) or so on average I think the numbers have been.
If you have fancy cars / boats etc that are subject to personal property tax per year you may find saving thousands there as well.
Certainly this is not the same for $10 / hour fast food workers or billionaires with fancy tax vehicles.
Granted, services and things are different - so no way to make it not apples to oranges - but tax is indeed relevant to a set of people that consider ~30k / year to be a big deal.
> "Republicans felt that residents of the least socially protective states should not indirectly fund the welfare state and the spending implemented by Democrats in the coastal states."
Perhaps they "felt" that way, but the reality is that tax money generally flows from these coastal states to the red states. If anything, one could argue that SALT was a tool to help balance that out.
From a macro perspective this state of affairs seems to challenge both conservative and liberal beliefs about the effects of government taxation and expenditures.
Ugh, what an awful article. The author, putatively a Floridian, conveniently twists the data to support his thesis:
* He calls Florida a "Republican state". It's about as swingiest a swing state can be right now, and has been such for decades.
* He calls Virginia another "Republican state", I presume because it has a Republican governor. It also has voted for Democratic presidential candidates going back some years. It's also a swing state, but certainly less so than Florida is.
* Worst of all, he cuts off the data to obscure the important point of the Rockefeller data, which is that (as I wrote elsewhere) it's not so much "blue states", but NY/NJ/CT/MA that subsidize the rest of the country. They played the same role a century ago when MA was about as safe a Republican state as any in the country while NY was with OH the most important swing state.
Tax money flows that way because blue states are home to more wealthy citizens than red states, which are home to poorer citizens. Federal social programs tend to do just that, what a shocker. What SALT did was to give those wealthy citizens in blue states a tax break on their state's social programs and replace those funds with federal tax dollars coming from others.
There are plenty of poor people in these “wealthy” states. It’s not all just wealthy people that live in California, what a shocker. There are 40M people in California, I wouldn’t be surprised if there were more poor people in absolute terms in California than, say, Mississippi with a total population of less than 3M. The “state welfare” programs that are for some reason maligned (whereas Federal welfare programs aren’t for some reason) largely go to help poor people in these states. That’s my point about balancing: I’m not saying either is necessarily good or bad, both are trying to theoretically help people in need. SALT allows CA more wiggle room to help it’s own poor given that it is net negative on Federal money out vs. in (in part because people think that that somehow magically means everyone is fine there).
The difference is that California's state programs are there because California voters approved of them, more or less. California also has representation when it comes to federal programs. However, the states from which federal tax dollars subsidize California state programs through the SALT deduction do not have representation when it comes to California's state programs.
Those states however have disproportionate representation in both the House and Senate. So it’s not as simple as one having a say and the other not. Additionally, SALT isn’t exclusive to CA, any state with income taxes benefits from it (and most states do have income taxes). I think if you were to zoom out to the country level in a hypothetical international tax sharing scheme, where the voting mechanics were similar to the Senate and House, you’d probably flip sides, thinking of course it makes sense that a country should have some flexibility to protect its revenue (while still for the record delivering the highest contribution) vs. having a vote that isn’t really representative of its population nor contribution to some international tax pool. Because again, even without SALT, these states were often still providing the largest contributions, and often paying the highest taxes. This was fairly obviously a vindictive move here, that passed in the same bill that had massive wealthy tax cuts. It’s not like this money was now “finally able to get to the poor citizens of wherever” or something.
> Additionally, SALT isn’t exclusive to CA, any state with income taxes benefits from it (and most states do have income taxes)
Many states have income tax, but prioritize low taxes and spending. Those states don't see as much benefit from the SALT deduction. And make no mistake, when it comes to SALT, the real winners are the wealthy, not the poor.
> when it comes to SALT, the real winners are the wealthy, not the poor.
Right, which is why it happened parallel to the wealthy tax cuts. This "protected" that constituency from the effects of removing SALT (plenty of high earners in CA still ended up ahead if I recall correctly), went largely to offset other tax cuts (meaning no meaningful "programs benefits"), and thus ironically enough arguably negatively affected the middle class beneficiaries the most -- the kind of people that would have most benefited during specific rare events, for example when selling their home.
>Perhaps they "felt" that way, but the reality is that tax money generally flows from these coastal states to the red states.
Not true.
First, the state of California (to use as example) does not pay a cent to another state or to the federal government. It is residents of California that pay federal taxes, which in turn provide funding and services to states and individuals.
Second; the Rockefeller Institute (<https://rockinst.org/issue-areas/fiscal-analysis/balance-of-...>) shows that, as of 2018 (the last time I checked this data; I see that 2019 is now available), the 10 states at the bottom of the per capita list—that is, the states that benefit from the most federal spending per person compared to how much each person pays in federal taxes—are
2016/2020 Hillary/Biden-voting states: VA, NM, MD, HI, 1/2 of ME
2016/2020 Trump-voting states: KY, AK, AL, WV, MS, 1/2 of ME
It's not so much "blue states" as frequently claimed, but taxpayers of four very wealthy Northeast states (the Tri-State area plus Massachusetts) that account for the vast bulk of citizens paying more than they receive from the federal government. After them come CO, NE, UT, and MN, of which half voted for Hillary/Biden and half for Trump. All other states are net beneficiaries of the taxpayers in the top eight (and, again, really, it's the top four).
This is all I need to know. Typical "toxic libertarian" drivel. No taxes, no rules, no laws, everyone for themselves.
I've read many an article in the last two years about the imminent demise of Blue states and NYC, but the reality is that Manhattan average rent just hit $5K a month:
You want to guess why? Because people are willing to pay premium to live in a civilization, among people who value education, science, and progress, and where I don't have to go shopping at Target with some gun nutjob exercising his "god-given" right to carry a cannon everywhere. No thank you - I'd rather pay higher taxes. Enjoy your Wild West.
Taxes are the problem. The are the root cause of every racial and societal equality in the USA (Well that, and neighborhood associations and their racist beginnings).
I think trying to limit it to taxes ignores the many other reasons why average Americans are fleeing states like California and New York. Business climate, high crime, low prosecution, homeless issues, etc.
This focuses on income tax only. That's a terrible way to look at things.
What about property tax? Home prices? Car insurance? House insurance? WAGES? Etc.
I looked at moving from Illinois to Florida last year and decided against it. I couldn't afford it. No state income taxes are a trap!
EDIT - I should probably mention that I cannot think of a possible justification for living in Florida if you aren't within 5-10 miles of the ocean, and that definitely affects the cost of everything. Growing up, I had relatives that lived along a river in northern Alabama, and it was an amazing, fun place to be. Boating, hiking, biking, swimming, etc. Rock outcroppings so you could jump 20 feet down into the water. The interior of Florida has nothing comparable to offer.
You literally cannot imagine that someone might not care that much about outdoors? And you’re posting on a site mostly frequented by computer people? That’s pretty closed minded.
The writer makes a pretty big mistake assuming that upon moving from NY to FL, a person can keep earning the same income as he did in NY. This is the exception, not the norm. The norm is for people to get a paycut because of the (weaker) market in FL, and pretty significant ones at that, easily amounting to 15+ percentage points. This is true for software, but I do not know if it's the same for other occupations. I do have a healthy suspicion that it's true and perhaps more drastically so for other occupations, in which case the author's mistake is magnified in the general case.
If you combine that fact with the fact that some expenses such as schooling and online shopping are actually quite uniform across the nation (private schools seem to cost around the same whether you are in the Bay Area or elsewhere, and public schools are free across the nation; ditto for Amazon/other online shopping which I assume comprises a healthy chunk of people's spending nowadays), the only savings come from housing (able to own a house vs not at all in CA and NY) and grocery (is gas much cheaper in the NY vs FL case? It certainly is in the CA vs FL case).
Most people's retirement portfolios comprise ETFs and such that pay out the same whether you are in CA or FL, so I suppose people get more bang for their retirement buck by moving out of CA/NY, but that has been true even before the pandemic.
So the picture is more complicated, and I do not believe people can expect to get 2 months earnings back in their pockets by moving cross-country. Any counterarguments to this line of reasoning?
The migration data compares July 2021 to early 2020.
A lot of that out migration has reversed at this point (in fact, more than reversed), as people realize that super hot weather might be nice in certain days of the year, but it really sucks during the rest, bad schools are still bad, bugs suck, and there was a reason they weren’t living in flung out car first suburbs in the first place.
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[ 2.9 ms ] story [ 187 ms ] threadPresumably by hiking residential tax rates and converting office space to residential, but the latter could take a long time…
do not hold your breathe waiting for SF/NY to run out of money somehow
Large metropolises will manage potential budget shortfalls how they will.
More importantly, after large commercial leases expire, commercial property owners and their management companies will adjust their commercial rents until companies and institutions find value. While some concerns go remote-only, others will implement hybrid or even full RTO. The price and associated tax revenue on these commercial leases will stabilize and, more than likely, increase as the economy increases.
The expiration of corporate leases will not usher municipal financial apocalypse as many observers seem to speculate. Rental market corrections unavoidably will lag pandemic economic contraction (leases take time to expire) and such contractions hardly signal the end of commercial and corporate interests in renting urban real estate.
There's more, but I'll leave with this contra-article. California is indeed a high tax state for the very high income people, but it's actually very reasonable for middle and lower class income earners.
"Yes, Texans actually pay more in taxes than Californians do"
https://www.sfgate.com/news/houston-texas/article/texans-pay...
CA: $788,679 [0] * 0.73% [1] = $5757.3567
TX: $315,235 [2] * 1.69% [3] = $5327.4715.
[0]: https://www.zillow.com/ca/home-values/
[1]: https://smartasset.com/taxes/california-property-tax-calcula....
[2]: https://www.zillow.com/tx/home-values/
[3]: https://smartasset.com/taxes/texas-property-tax-calculator#:....
Good luck finding a house in Austin that's 315k paying 1.69% in property taxes.
San Fransisco: $1,576,808 [0] * 1.18248499% [1] = $18,645.5179
Austin: $661,337 [2] * 2.2267% [3] = $14,725.991
[0]: https://www.zillow.com/san-francisco-ca/home-values/
[1]: https://sftreasurer.org/property/secured-property-taxes
[2]: https://www.zillow.com/austin-tx/home-values/
[3]: https://www.homecity.com/blog/austin-property-tax/
Also, I would much rather pay a higher nominal property tax because my property is worth more than pay a higher nominal property tax because the property tax rate is higher.
This is trivial from the fact that the government is not a for profit entity.
>and available revenues grow to fit whatever the taxpayers can still bear
This is also trivial because taxpayers and voters sufficiently overlap.
However, some governments have borrowed more from the future than other governments, and just like a business with more debt service has less to spend on other expenses and/or has less profit, a government with more debt service has to spend less on infrastructure/services and/or has to increase taxes.
This is not so. Government could use the surplus revenues to pay off debt early, or to reduce taxes. It almost never does these things.
But my point is more that governments (ideally) collect taxes based on projected spending (a budget), so of course spending will roughly match up with collection. Although, in reality, governments spend far more than they collect via off the books retirement benefits for government employees.
Haven’t heard about it before, but this sounds great, not sure why it’s infamous. Sadly, though, things like that overall very rare, hence why I said “almost never”.
> But my point is more that governments (ideally) collect taxes based on projected spending (a budget), so of course spending will roughly match up with collection.
I think it’s the other way around: the budget is planned around expected tax revenues, instead of tax revenues being planned around budget. This is actually a huge difference: when there is a revenue windfall, extra funds are spent on pork or vanity projects, instead of returning them to people who they were taken from.
Can’t say how much the kicker really does impact these things, but I can say that when you compare state funded resources between California, Washington and Oregon, Oregon’s usually come out looking worse. For example, if you take a road trip up i5 from Los Angeles to Seattle, you’ll notice that the rest stops in Oregon are far worse than those in California or Washington. It does seem that there’s an austerity in Oregon absent in those two states, and I can’t help but wonder if it’s imposed by the requirement to send back the surplus.
As for austerity, given the between-state variation, what money is spent on is way more important than how much of it is available. As it turns out, Oregon actually rakes in more money (per capita) in state and local taxes than Washington, so one should rather expect Washington to be the austere one. In fact, Oregon could send every resident a check for $1k every year, and still have 10% more money available per capita than Washington. That’s why I’m rather skeptical about governments claiming to need more money in order for X not to suck: first I want to hear an answer to “why X sucks less in state Y, which spends less money on X than you?”.
If you want your government to stop the endless debt expansion you're going to need negative interest rates.
Imagine having to move because your monthly property tax doubled.
Our property taxes are assessed every three years, and the price of my home has gone up significantly in the four years since I bought it. These are unrealized gains; my income has not gone up a penny. But, when the assessment is made, my property taxes will skyrocket.
It is simply inflation. If we accept it in all other places of life, and renters are expected to accept it, why should land owners not be expected to accept it?
If your income has not gone up in 3 years, and the purchasing power of the currency you earn income in has gone down, then you simply have to accept you will be able to purchase less. Or figure out a way to make your income go up.
Also, participate in city/county/state governments and elections to make sure current leaders are limiting excessive spending from future taxpayers’.
Understand what? Why would I think certain portions of the population should be exempt from certain types of inflation?
Life is consumable. The utilities, streets, city hall workers, inspectors, everything that makes the world go round. Everything decays and needs to be brought back to order, over and over again.
If the argument is that poorer people should get assistance to not be so poor (including retired people), then sure, give them cash. But I do not see why a retiree should get any more consideration for where to live than a poorer immigrant family who has not had the opportunity to save a down payment and has to rent.
Property taxes mostly pay for schools. I read a story about funding schools in Utah. The way it was done in this district was that the district was responsible and could be trusted not to waste money. They figured out what the budget they needed each year, it was approved, and then the tax rate was set to cover the budget. This would be a great situation to live in because when property values go up a lot over a few years but the cost to run the schools don't go up much, the school district lowers the tax rate instead of trying to find ways to spend all the extra money they are getting.
Property taxes are higher, but housing prices are lower in TX than CA. From what I've seen they are a bit of a wash (tax rate is double, but housing prices are 50% or less).
And in the methodology section it says "The report also includes the effect of indirect consumption taxes: the sales and excise taxes that are paid initially by businesses rather than individuals". So it looks like they assumed those taxes are passed through to consumers when in fact they aren't, at least not 100%.
They also exclude all tax payers over 65.
This was true years ago, but the cost of housing in Frisco TX and San Diego CA are about the same now. If anything, San Diego may have an edge because it has many older, smaller properties that keep the overall cost down compared to the newly built up mcmansion land of Frisco.
I do not understand this. Do you mean cost of housing excluding purchase price?
The cheapest 4BR/3BA in or around San Diego is $1.4M, and there is only 1. Property tax will be at least $14k per year.
https://redf.in/s4hVXR
Frisco, TX, on the other hand has a ton of 4BR/3BA, and this is a comparable new construction for $1.4M. 4x the lot size, 2.5x the interior space.
https://redf.in/hwqzX8
Here is the crux of the issue: the graphs and the source do not say that the non-wealthy Texans actually pay more money in taxes. Instead, they contribute higher share of total tax revenue. This is not the same thing as actually paying more in taxes.
Imagine a state where every single residents pays exactly one penny in taxes. In that state, bottom 20% pay exactly 20% of the tax revenue, and top 1% pay only 1% of the tax revenue. By the article’s logic, in that state the non-wealthy residents would pay even more taxes than the ones in California. It is, of course, absurd.
You cannot look only at the shares in the revenues, you need to also look at the size of the revenues to judge. As it turns out, Texas pulls in around $8.6k per capita in state and local taxes, compared to California’s $13k. That means that even though middle 60% of Texans contribute 10% of the revenues, compared to 9% of revenues contributed by middle 60% of Californians, they actually pay a third less in taxes in actual dollars.
In short, the article is pure misinformation, deceiving people for political gain, typical for today’s media. Where are the fact checkers?
But really both are sloppy.
Anyone who actually looked at the data and concluded that living in California instead of Texas was a better financial deal for someone who is not a high income earner is either stupid or lying.
In addition to paying more in taxes in TX, they got less in government services for the taxes they did pay, insanely invasive government, and had to pay more for generally everything except beef (which is great if you love steak).
Can you explain to me how is this possible? Like, an realistic example scenario.
Also, the FUD about CA income taxes always ignores the calculation of tax liabilities in a progressive scheme, so the tax burden is always wildly overstated.
OTOH, if you're willing to move to less nice parts of TX you will save money on taxes compared to CA. But you'll find out pretty quick why housing is cheaper there.
Did we read the same article? Because that isn’t what it said, look at the graph again:
https://i.redd.it/7pdcf4q65kg91.jpg
Subtitle: total state and local taxes as a share of family income by income group
But the top federal tax bracket starts at $540k and the Social Security tax cuts out at $142k, so if you're paying one on marginal income, you're not paying the other.
The top-line claim of the author is flat-out demonstrably wrong.
37% federal + 1.45% FICA (medicare) + 0.9% medicare surtax + 10.3% NY state + 3.8% NYC = 53.4+%
but I don't work in NYC.
He also specifically says that case-by-case numbers are more complicated and vary, so it's not fair to argue that the numbers are extremely sloppy. He has made an attempt to use well-researched average numbers that appear to rely on actual rates people pay, not the theoretical marginal rates. Mentioning the marginal rates is a rhetorical device he uses, not the rate he uses to illustrate the scenarios.
The law itself, IMO, should be struck down by the interstate commerce clause. Additionally, it's the wrong fix: if New York wants to retain citizens, they should reduce the tax burden to compete with neighboring states, not attempt to legally overreach and clutch money as hard as they can.
I’m not sure I understand why you suggest the interstate commerce clause. But regardless, didn’t the Supreme Court refuse to take up the case earlier this year when New Hampshire unsuccessfully sued Massachusetts over this same issue?
It seems that the concept is allowable, at least according to current law.
Maybe because that was the height of the pandemic and the city was shut down? Judging by the astronomical rent increases, even more people moved back.
Yes the cost of living is lower, yes you can get a house with yard for the price of an apartment, food is cheaper, etc..
However for many leaving there for here, eliminating state income tax, and especially with SALT tax thing that changed some years ago ( https://taxfoundation.org/tax-basics/salt-deduction/ ), they seem to save $30,000 in taxes (?) or so on average I think the numbers have been.
If you have fancy cars / boats etc that are subject to personal property tax per year you may find saving thousands there as well.
Certainly this is not the same for $10 / hour fast food workers or billionaires with fancy tax vehicles.
Granted, services and things are different - so no way to make it not apples to oranges - but tax is indeed relevant to a set of people that consider ~30k / year to be a big deal.
Perhaps they "felt" that way, but the reality is that tax money generally flows from these coastal states to the red states. If anything, one could argue that SALT was a tool to help balance that out.
A typical summation in the news media looks like this article, https://www.tampabay.com/opinion/2022/01/22/blue-states-pay-...
A typical rebuttal looks like this article, https://thehill.com/opinion/finance/502321-no-blue-states-do... IMO, it rings hollow, except for the accusation of liberals being glib.
From a macro perspective this state of affairs seems to challenge both conservative and liberal beliefs about the effects of government taxation and expenditures.
>A typical summation in the news media looks like this article, https://www.tampabay.com/opinion/2022/01/22/blue-states-pay-...
Ugh, what an awful article. The author, putatively a Floridian, conveniently twists the data to support his thesis:
* He calls Florida a "Republican state". It's about as swingiest a swing state can be right now, and has been such for decades.
* He calls Virginia another "Republican state", I presume because it has a Republican governor. It also has voted for Democratic presidential candidates going back some years. It's also a swing state, but certainly less so than Florida is.
* Worst of all, he cuts off the data to obscure the important point of the Rockefeller data, which is that (as I wrote elsewhere) it's not so much "blue states", but NY/NJ/CT/MA that subsidize the rest of the country. They played the same role a century ago when MA was about as safe a Republican state as any in the country while NY was with OH the most important swing state.
Many states have income tax, but prioritize low taxes and spending. Those states don't see as much benefit from the SALT deduction. And make no mistake, when it comes to SALT, the real winners are the wealthy, not the poor.
Right, which is why it happened parallel to the wealthy tax cuts. This "protected" that constituency from the effects of removing SALT (plenty of high earners in CA still ended up ahead if I recall correctly), went largely to offset other tax cuts (meaning no meaningful "programs benefits"), and thus ironically enough arguably negatively affected the middle class beneficiaries the most -- the kind of people that would have most benefited during specific rare events, for example when selling their home.
Not true.
First, the state of California (to use as example) does not pay a cent to another state or to the federal government. It is residents of California that pay federal taxes, which in turn provide funding and services to states and individuals.
Second; the Rockefeller Institute (<https://rockinst.org/issue-areas/fiscal-analysis/balance-of-...>) shows that, as of 2018 (the last time I checked this data; I see that 2019 is now available), the 10 states at the bottom of the per capita list—that is, the states that benefit from the most federal spending per person compared to how much each person pays in federal taxes—are
2016/2020 Hillary/Biden-voting states: VA, NM, MD, HI, 1/2 of ME
2016/2020 Trump-voting states: KY, AK, AL, WV, MS, 1/2 of ME
It's not so much "blue states" as frequently claimed, but taxpayers of four very wealthy Northeast states (the Tri-State area plus Massachusetts) that account for the vast bulk of citizens paying more than they receive from the federal government. After them come CO, NE, UT, and MN, of which half voted for Hillary/Biden and half for Trump. All other states are net beneficiaries of the taxpayers in the top eight (and, again, really, it's the top four).
This is all I need to know. Typical "toxic libertarian" drivel. No taxes, no rules, no laws, everyone for themselves.
I've read many an article in the last two years about the imminent demise of Blue states and NYC, but the reality is that Manhattan average rent just hit $5K a month:
https://www.curbed.com/2022/07/manhattan-rent-historic-high-...
You want to guess why? Because people are willing to pay premium to live in a civilization, among people who value education, science, and progress, and where I don't have to go shopping at Target with some gun nutjob exercising his "god-given" right to carry a cannon everywhere. No thank you - I'd rather pay higher taxes. Enjoy your Wild West.
What about property tax? Home prices? Car insurance? House insurance? WAGES? Etc.
I looked at moving from Illinois to Florida last year and decided against it. I couldn't afford it. No state income taxes are a trap!
EDIT - I should probably mention that I cannot think of a possible justification for living in Florida if you aren't within 5-10 miles of the ocean, and that definitely affects the cost of everything. Growing up, I had relatives that lived along a river in northern Alabama, and it was an amazing, fun place to be. Boating, hiking, biking, swimming, etc. Rock outcroppings so you could jump 20 feet down into the water. The interior of Florida has nothing comparable to offer.
But then again, shouldn't Orlando be filled with computer people and Silicon Valley with outdoorsmen?
If you combine that fact with the fact that some expenses such as schooling and online shopping are actually quite uniform across the nation (private schools seem to cost around the same whether you are in the Bay Area or elsewhere, and public schools are free across the nation; ditto for Amazon/other online shopping which I assume comprises a healthy chunk of people's spending nowadays), the only savings come from housing (able to own a house vs not at all in CA and NY) and grocery (is gas much cheaper in the NY vs FL case? It certainly is in the CA vs FL case).
Most people's retirement portfolios comprise ETFs and such that pay out the same whether you are in CA or FL, so I suppose people get more bang for their retirement buck by moving out of CA/NY, but that has been true even before the pandemic.
So the picture is more complicated, and I do not believe people can expect to get 2 months earnings back in their pockets by moving cross-country. Any counterarguments to this line of reasoning?
A lot of that out migration has reversed at this point (in fact, more than reversed), as people realize that super hot weather might be nice in certain days of the year, but it really sucks during the rest, bad schools are still bad, bugs suck, and there was a reason they weren’t living in flung out car first suburbs in the first place.