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Re: Is this fair or discrimination?
Old 08-05-2006, 10:17 AM   #21
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Re: Is this fair or discrimination?

Well, I was taught to believe in Econ the role of good government is to intervene when markets fail. Private transactions can fail to capture the cost of externalities (like the people dying of cancer downstream of the factory). So, for example, why pay for schools? That future generation competes with the future of other countries, keeps us a wealthy nation, and pays for the social security check in the mail.

Affecting behavior through tax law is not inherently evil. But it can be abused and used for cover. I'm aware of the fact that the "death tax" debate is pretty tortured, there aren't any small corner stores being shut down because only 10 million can be passed onto future generations without a tax trigger. :P

But prop 13, I gotta defend it. Put aside the widower, just look at my neighborhood. We are just about the median. Standard 3 bedroom homes in north county San Diego, plumbers, construction workers, teachers, policemen - you know, solid Millionaire Next Door middle class types. If Prop 13 didn't exist, our tax burden would have increased by over $3,000 a year in the last 4 years, bringing the total property tax bill up near $6,000. While I and the majority of this board could afford that type of increase, I don't believe most people in my community could. There is a cost to having unstable communities and high turnover.

Now what does CA do to compensate for the obvious shortfall in property tax revenue? We have Melloroos or local "community" taxes, usually in the form of bonds that the homeowners pay off over a 25-30 year period. Ours are about $160 a month. But that money is locally controlled, and we can see exactly what we get for it (upkeep of open spaces, funding of the local elementary school, the local park with pool, tennis courts etc.). I believe this is a more efficient way to take care of the common need then sending it to the capital.

What works for CA might not work for other states, and vice versa. We really don't have a problem with lack of growth here, trust me. I believe CA is too large to have that much tax dollars administrated centrally, a smaller state probably doesn't have that problem. But you must understand we are now dovetailing into larger personal views of States Rights (Jefferson) vs. Federalism (Hamilton). I'm a big States Rights fan at this point, I believe the pendulum has swung too far towards central control. And the best way to swing power back is to shift the money (tax dollars) as local as possible.

So jes' you reckon' I got mah smooth bore .60 huntin' rifle ready fo' all y'all carpet baggers if you try an' come take away mah prop 13!
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Re: Is this fair or discrimination?
Old 08-05-2006, 10:20 AM   #22
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Re: Is this fair or discrimination?

Quote:
Originally Posted by Texas Proud
Actually, I do not have any problem paying my school taxes... it is part of being a citizen IMO... I was just pointing out that I am paying for something that benefits someone with kids, not me...
But, and I'm not claiming that this actually is the case, isn't the concept of public education that it benefits the community as a whole by creating a populace that is educated and prepared to take its place in the workforce?
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Re: Is this fair or discrimination?
Old 08-05-2006, 10:24 AM   #23
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Re: Is this fair or discrimination?

Exactly.
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Re: Is this fair or discrimination?
Old 08-05-2006, 10:29 AM   #24
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Re: Is this fair or discrimination?

I wonder if the government taxed all your equities yearly based on their current market price (even if you owned them for 20 years and haven't sold them) would you think that is fair? *
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Re: Is this fair or discrimination?
Old 08-05-2006, 10:30 AM   #25
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Re: Is this fair or discrimination?

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Originally Posted by riskaverse
I wonder if the government taxed all your equities yearly based on their current market price (even if you owned them for 20 years and haven't sold them) would you think that is fair? *
Excellent point! Should we do this to encourage equity turnover and prevent portfolio stagnation?
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Re: Is this fair or discrimination?
Old 08-05-2006, 11:11 AM   #26
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Re: Is this fair or discrimination?

Quote:
Originally Posted by riskaverse
I wonder if the government taxed all your equities yearly based on their current market price (even if you owned them for 20 years and haven't sold them) would you think that is fair? *
Doesn't Florida already do this to its residents?

I don't know about you guys, but many people incorporate tax planning into their investments. Just look at the resurgence of dividend investing since the 2003 EGTERRA legislation, and watch for impressive 2008 volatility when cap gains rates are reduced for the lower income brackets.
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Re: Is this fair or discrimination?
Old 08-05-2006, 05:56 PM   #27
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Re: Is this fair or discrimination?

Quote:
Originally Posted by Leonidas
But, and I'm not claiming that this actually is the case, isn't the concept of public education that it benefits the community as a whole by creating a populace that is educated and prepared to take its place in the workforce?
Look at what the schools are pumping out now a days... I do not think we will have the edge sometime in the future... long after I am gone, but we are not producing the best minds today.

But, I agree with this statement in concept... but if it is such a good investment, why are we not doing the same for college or technical training?? Not that I would want this, but why stop at high school??
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Re: Is this fair or discrimination?
Old 08-05-2006, 06:01 PM   #28
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Re: Is this fair or discrimination?

Quote:
Originally Posted by Laurence

But prop 13, I gotta defend it. Put aside the widower, just look at my neighborhood. We are just about the median. Standard 3 bedroom homes in north county San Diego, plumbers, construction workers, teachers, policemen - you know, solid Millionaire Next Door middle class types. If Prop 13 didn't exist, our tax burden would have increased by over $3,000 a year in the last 4 years, bringing the total property tax bill up near $6,000. While I and the majority of this board could afford that type of increase, I don't believe most people in my community could. There is a cost to having unstable communities and high turnover.
SO, the people who are just getting into the work force... the young policeman, the young plumber, the young teacher.... they should just suck it up and pay more because they are just younger Nope, they can not even afford the houses.. so buy something two or so hours commute...

And let's go back to ECO... if the price of the houses rose so high that a teacher or plumber could not afford the taxes.. then they could sell, pocket a HUGH windfall and buy a cheaper house farther... and this would mean that there would be MORE houses up for sale, which would reduce the price in the first place...
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Re: Is this fair or discrimination?
Old 08-05-2006, 06:05 PM   #29
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Re: Is this fair or discrimination?

Wab and I agree on this issue. The net effect for CA is that housing prices are distorted and they are starving their schools.
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Re: Is this fair or discrimination?
Old 08-06-2006, 06:31 AM   #30
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Re: Is this fair or discrimination?

Here I've had to learn a lot about the baroque mosaic that is Italian taxation. The property tax part is interesting and could be salient to this (hijacked) discussion.

There are 3 interesting factors:
1.) There is a 3% 'sales tax' upon purchase. So that takes care of part of the equation that is linked to price. The % goes higher if it is for a second home or for a 'luxury' home (based on certain characteristics).
2.) THEN there is a yearly tax assessment (6/1000 or thereabouts, each town is different) but not based on actual value; it's based on a theoretical 'income' calculated by the features of the house (volume, amount of land, garage, etc.). People living in more modest-scale houses will always pay less even if by some fluke when they bought they paid more than their neighbor did for a bigger/older house.
3.) then the icing on the cake that could further protect oldsters in smaller homes: there is an exemption for any yearly tax under a certain amount;* folks here in the smallest homes often pay little or nothing.

I can't imagine an approach like this catching on in the US, but to me it seems more fair because it recoups something both from sales prices and from ongoing residence.

UNfair is the garbage tax, which is paid separately and is based on m2. The assumption is, bigger house => more people => more garbage. All trash is collected from dumpsters that are found every couple of blocks.

The most 'fair' system that I've heard of in the States and in parts of Northern Europe: buy city bags at $x/bag.. if it's not in a city bag it doesn't get picked up. That would only work if there's sidewalk collection in areas of single- or two-family homes, not with tons of multi-unit buildings. IIRC, in Boston they would do sidewalk collection but not for apartment complexes, who had to have private trash contractors.. That wasn't fair for apt. bldg./condo owners who'd paid prop. tax and then had to pay again for private trash pickup..

On the original topic, I'm a fan of universal health care, so to me, if an employer provides access and subsidies, they should do so in a spirit of retaining good employees and not penalize those who are older or with families. But I think the selling-off is contrary to the spirit of the benefit; once you go there, then yeah, the company should just raise everyone's salary by $x/month and get out of the health-care providing biz.

Quote:
it is unfair that my insurance premiums might be more than 1/2 that of a married couple or even more unbalanced when they also have kids.
LG4NB.. yeah! Not the employer's fault... this is a very annoying aspect of HMOs. In my case 2 individual plans cost less than the family plan, but I couldn't buy a second single plan for DH.. had to go "family" at an increased cost.. which was the same for the two of us as it was for my business partner plus his wife and 2 kids that were running to the doctor literally every 2 weeks for doses of antibiotics for ear infections and cases of strep.* Go figure...
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Re: Is this fair or discrimination?
Old 08-06-2006, 01:01 PM   #31
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Re: Is this fair or discrimination?

Well, I believe the legistlature is starving our schools, we agreed to the CA lotto because 50% of the revenue was supposed to go to schools. Technically it did, but then they just siphoned off the original funding, like a shell game.

But yes, I'd be happy to do away with property taxes alltogether and go to a larger sales tax in CA. Exempt food and you have a pretty fair system.
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