Got our wealth tax bills this week.

[frogstar0]

Last edited Mon Sep 2, 2024, 11:48 AM - Edit history (2)

We got our school tax bills this week. THIS IS A WEALTH TAX! So when anyone claims that we cannot tax wealth, remind them that if they own a home they pay a wealth tax.

[LuckyCharms]

1. Why is it a wealth tax?

[Hassin Bin Sober]

5. Because you pay taxes on the value (including unrealized gain) of your property.

[LuckyCharms]

6. But as stated by another poster below...

essentially everyone, whether they own or rent, ends up paying.

If it were to be based on income, rather than property, then school districts would have to administer that, which would be arduous for municipalities.

[Hassin Bin Sober]

10. So it's a regressive wealth tax. Doesn't change the fact it's a wealth tax. It just makes it all that more common

The point is we can and do tax unrealized wealth - the fact landlords lay the taxes off on a tenant is a different issue. (I mean, the landlords actually pay the taxes if we are being technical)

I assume it’s not your argument we “will all be paying” if we tax estates valued over $100 million dollars?

[LuckyCharms]

11. My school taxes are based on an assessed value of $3,200, and it's been that way since 1978 with no change.

The unrealized gain on the value of the property over that time period is not recognized, nor taxed.

However, I get your point.

Technically, it is a wealth tax because it is based on either the home value itself, or the assessed value for tax purposes.

But in my case anyway, my assessed value has never changed. The only changes have been in the tax rate which adjusts yearly due to budgetary needs of the school district. So in that sense, I'm not actually being taxed on my "wealth".

To me, it's semantics, and it is done this way (rather than being based on income or some other metric) for ease of administration.

[Hassin Bin Sober]

14. That seems weird to me. There is an entire industry of law practice based on fighting increased assessed values.

One of our longest serving aldermen was just sentenced to two years in the federal slammer for helping wealthy clients fix their assessed property valuations - for a kickback of course.

Consider yourself fortunate.

[LuckyCharms]

16. It's weird to me as well.

First of all, my house was obviously NEVER worth just $3,200.

So, that means that the assessed value when initially established decades ago was based on some formula related to the tax base. It seems like a rather arbitrary number, the proceeds of which are determined by an annually adjusted rate, while keeping the base constant.

That's the way it is for everyone in my town. Most homeowners never see a change in their assessed value.

[frogstar0]

17. I have no clue how your state does it but NY State has an equalization rate for each town or city.

The asses value is multiplied by the ER to get something approximating current value.
We also have had county wide reassessments from time to time. Not perfect but at least closer.
Also does not matter if your assessment has not change in 30 years if it still is accurate relative to other property in the area. Yeah, never completely right as values change, sometimes dramatically.
The point is that we do tax the middle class, and all property owners, on their biggest, or on one of their biggest item of wealth. Remember when the school/property tax started land and building were the principal item of wealth.

[LuckyCharms]

18. Then for school taxes, what do you think they should be based on, rather than property?

[Voltaire2]

31. Income.

The theory of property tax goes back to agrarian societies where land was equivalent to income.

[LuckyCharms]

33. Would that taxing process be administered by the school district?

[Voltaire2]

36. It should be statewide and provide equitable

funding for all students in all communities. Better yet it should be national and provide equitable funding for every student in the country. And really it should be global and provide equitable funding for all students in the world. I’ll wait for the galactic federation before advocating that transition.

Maybe we ought to stop spending 10x every other nation on military shit.

[jimfields33]

44. The only way that will happen is if we stop protecting

each nation financially. Heck we still have military in Iraq!!!!! And Afghanistan is a big portion of our annual military budget (which I don’t mind). But if we want to stop military budgets, we need to stop going to countries and giving military assistance. That’s the only way to stop the bloated system.

[dpibel]

59. How big?

You don't mind the spending in Afghanistan?

And it's a "big portion of our annual military budget"?

Can you find me some support for that allegation?

Because, last I knew, the US was pretty much quit of Afghanistan.

[jimfields33]

63. I meant Ukraine. Sorry about that.

If you add up all the bases in Europe, Asia, Middle East, and heck the Horn of Africa we even have a large base and huge military presence. Africa isn’t even being threatened by any other country. What a waste of money.

[dpibel]

64. Here is some startling news for you!!!!

Africa is actually not a country!!!

Jeeze, Jim. I agree with you that the U.S. military budget is a shame, a sham, and a fraud.

But I don't need to say silly things to support that position.

Then again, my better angels tell me to say: "Who among us has not made the easy typo of "Afghanistan" when we meant "Ukraine"?

You carry on apace!

As ever, I stand in awe of your improv skills.

[jimfields33]

65. The Horn of Africa is made up of a group of countries.

Of course you focus on that because my point is 100 percent accurate. I’m glad that’s all your focus was on. I misspoke on that, but my response was my factually correct.

[dpibel]

67. More news!!

Did you know that the Horn of Africa has kind of huge strategic importance in terms of shipping and naval warfare and such?

Damn, Jim! This stuff is so tricky!!

I'm not sure what "but my response was my factually correct" means in standard English.

You apparently overlooked that part of my reply that says I agree with you on the military budget.

But I don't have to overlook things like facts and reality in order to hold that belief.

Again, your gig is really amazing, and I congratulate you for carrying it on for so long.

[Voltaire2]

71. We spend zero on Afghanistan. We got out in 2021.

And yes we should start turning over the 1000 or so foreign military bases we operate to the countries they are in.

[spooky3]

28. That's very unusual. In many (most?) jurisdictions, properties

Last edited Sun Sep 1, 2024, 04:07 PM - Edit history (1)

Are periodically reassessed (in our county, yearly) and taxes are increased. The millage (tax rate) can also go up.

In VA we also pay a car tax annually. If you hold a car 10 years or so, you can pay as much in taxes as you paid for the car initially. It’s another wealth tax.

[Voltaire2]

30. Sounds like California.

The modern anti tax campaign started there and it crippled school funding.

[PeaceWave]

23. Not in California...Yet another plus about living in this glorious state!

[jimfields33]

2. Wealth tax? I don't consider my property taxes a wealth tax.

Perhaps go into more details.

[Voltaire2]

32. It is literally a tax on unrealized wealth.

I don’t know how to make this clearer. The assessed value of your property is an estimate of its current value. The property tax is a percentage of that assessed value.

[jimfields33]

42. Well. I believe it a tax to pay for schools, police,

Fire, garbage and other county needs.

[Voltaire2]

43. How does that make it not a wealth tax?

[jimfields33]

50. It just doesn't. There is nobody on earth who says it is.

[dpibel]

52. You should find out

what "wealth tax" means.

It could help you!

OTOH, wilful misunderstanding has its own rewards, I guess.

[jimfields33]

53. Why would I? It's one of vice President harris' platform initiative.

I have full confidence in future president Harris.

[dpibel]

60. Why would you?

Maybe so that you would not fail to make sense in your comments.

Unless, of course, that is the idea!

[dpibel]

61. BTW

You are very, very good at what you do.

I stand in awe of your skills.

[lindysalsagal]

3. I think you're saying wealth taxes are normal? The GQP shouldn't complain about taxes?

Hope I'm correct on your meaning.

[frogstar0]

73. Yes, not new, not weird, not undoable

Just pointing out that most regular people, who are home owners, already pay a tax based on the value/wealth they have in their homes. This is not new, not weird, not undoable.

[getagrip_already]

4. Even renters pay for schools...

Through their rent, which covers the property and school taxes.

Those costs are passed through by landlords.

Sure, they are based on assessed value, but that isnt a wealth tax any more than income taxes.

[ret5hd]

8. ergo (in my humble opinion)

taxes on the assessed (open market?) value of other assets isn’t a wealth tax either.

and elon can pass his costs on to HIS landlords (ie the russians).

[getagrip_already]

9. True...

If you put an asset tax on financial holdings, it wouldn't be any different than property taxes.

We typically only tax realized gains though on financial assets though, not paper value.

Of course this a system designed by and for those with sizeable financial assets.

[spooky3]

29. When my old house didn't sell and I had to rent it out, the rent

Didn’t cover all the actual costs of owning the property. I had to pay the property tax regardless. So it isn’t technically correct that renters pay the property tax in every case.

[Voltaire2]

34. They can only pass through what the market allows.

Right now that would be anything they want.

[patphil]

7. I own a house, but I don't feel like I'm paying a wealth tax.

My taxes support community services like water, sewage, fire dept, police dept, road maintenance, building inspectors, and schools. Just to name a few.
It's hardly a wealth tax; more like a tax to insure the community can function.
Even renters pay tax indirectly through their rent payments to their landlords who do pay tax directly.

Here's a definition of a wealth tax:

https://taxfoundation.org/taxedu/glossary/wealth-tax/

[PSPS]

12. Any tax, regardless of what it is or what you call it, is used to "insure the community can function."

[patphil]

56. Very true, but a wealth tax is based on net worth.

Most other taxes are based on either income and/or property.

Examples of Wealth tax: You have 20 million dollars in stocks and bonds. An income tax would be based on any dividends you get from them. A wealth tax would be based on the value of the stocks and bonds themselves, plus any dividends.
A wealth tax would be levied on the value of your possessions, like art work, jewelry, precious metals, etc. Income tax would only be levied on the sale of such items.
There is a big difference between them. A wealth tax includes everything that adds to your overall wealth. Income and property taxes are just a piece of the whole.

[Voltaire2]

62. Oddly enough the tax code considers the increase

in value of your real estate, when you sell it, to be capital gains, just like stocks and bonds.

[PSPS]

70. That's fine with me.

A confiscatory wealth tax on amounts over a billion dollars sounds about right. If the oligarch doesn't want to pay the tax, let them deduct amounts they invest in their businesses or employees or other productive use and not just buying public policy as they do now. Nobody needs more than a billion dollars.

And there's still the matter of the $23 trillion (2015 figure) hidden in offshore accounts.

[frogstar0]

19. But you do.

All the things you mentioned are paid for by taxes. It could be income taxes, tariffs, sales tax etc. It is a choice where the tax is applied and collected. In my state and most ....I think.... it is some combination. Funds come from town, county, state and federal government. Property taxes are based on property ie wealth.

[patphil]

58. You're talking about a piece of a person's net worth.

A wealth tax is based on the whole thing. That's the very definition of a wealth tax.
Stocks, bonds, jewelry, artwork...everything of significant value goes into a wealth tax by definition.
Go back to my 1st post and read the definition.
All tax is based on some portion of a person's wealth, but a wealth tax goes much further and includes everything.
It's an entirely different thing.
The very rich invest in things that aren't included in normal taxes. It's easier to hide wealth and avoid tax. A wealth tax eliminates the loophole.

[frogstar0]

74. Right but....

I understand that property tax does not tax all wealth, but it taxes something bases on its money value, or wealth. So it is a wealth tax. Sales tax is a sales tax even though it does not get charged for every sale.

[Voltaire2]

35. It is irrelevant what it is used for.

A wealth tax is a tax on your wealth, and that can include anything of tangible value.

[ProfessorGAC]

46. Not Understanding That

All taxes do what you describe.
Income tax, the hypothetical wealth tax, excise taxes on gasoline ....
They all support government functions.
The end result isn't a determinant of what kind of tax it is.
A wealth tax would provide for the sane sort of services you describe.

[LetsGetSmartAboutIt]

13. It's worse than that actually

Property taxes keep less wealthy people from being upwardly mobile.

They should not finance schools this way because if the property values are low the tax base is small and that gives less money to the schools which affects the educational opportunities of the residents and just adds to the obstacles to becoming more wealthy.

I know someone who went to school in a wealthy area and you could get a pilots license as part of your high school education, among many other things.

Schools in France have enough money to provide actual meals using local products and professional chefs to make sure they have the cultural benefits and better nutrition to help them.

I believe they use a national income tax for schools that is then divided by student population across the country.

So beyond being a wealth or in this case an asset based tax ( based on an asset that appreciates and can be handed down so is not a always reflection of the current owners ability to pay an increasing tax ) it is not equally beneficial to the community and is a tax for schools that a person may or may not use themselves.

I was home schooled and have never had children of my own so all the "school tax" I have paid as property taxes, were for the benefit of society to have an educated population and I'm ok with that.

I'm pretty sure the school tax system was originally partially to keep minorities down or more specifically former slaves by tying educational quality and opportunity to property values and still let the rich benefit from better schools because for some reason the property of the wealthy is worth more than that of people in less affluent areas.

I'm also seeing now that I am in retirement my income has dropped but my property taxes have been increasing and will at some point force me to sell property that I can't afford taxes on or it will be taken anyway. So it's also a regressive tax in that way.

Just my opinions, some facts may be off but most of it is accurate as far as I know.

[House of Roberts]

15. Don't mortgagees pay 100% of property taxes

even if they hardly have any equity? How is that a ‘wealth tax’?
That’s a ‘future wealth’ tax, it seems to me.

[frogstar0]

20. You mean......wait for it.....

A tax on unrealized capital gain?

[BrianTheEVGuy]

22. Yep

If the value of your house goes up, your property tax will as well… regardless of what your income does and without regard to whether or not you’re selling your house.

If Dave the electrician and Maddy the plumber can pay — and at a much higher level of their income than Kamala’s proposal would do for fat cats — why can’t Elon?

[PeaceWave]

24. This isn't how it works in California.

In California, Proposition 13 limits a property owner’s property tax to 1 percent of the assessed value. For example, an owner of a home assessed at $500,000 will pay a property tax of no more than $5,000.

But, it gets way better. In order to provide property owners with protection against strong fluctuations in property prices, Proposition 13 mandates that a property’s owner's property tax can not increase by more than 2 percent from one year to the next.

The result is that a lot of long time California homeowners have seen their homes go up multiple times in value while their property taxes have remained relatively low.

[DetroitLegalBeagle]

55. Michigan is similar

Property tax increases is capped to inflation or 5%, whichever is less. People who have owned their home for decades typically have extremely low property taxes. After a change in ownership, the taxes are uncapped the following year. So many new homeowners, particularly if they purchased a home from a long time owner, can get a massive property tax increase if the value of the home has risen dramatically since the last time the house changed ownership. Good realtors and mortgage agents will warn home buyers of this and give them an estimate. Others fail to mention this to the detriment of the new home owner.

[Sparkly]

78. Dave the electrician and Maddy the plumber made bad real estate investments?

[spooky3]

40. It's even worse than that. What Elon and friends are whining about

is that they may entirely own a stock or some other asset that they could sell today for X dollars, but they bought it for X-100 dollars. The proposal might be that they be taxed on the difference even if they don’t sell (unrealized capital gain).

But homeowners are annually taxed on the fair market value (or some other measure of the worth of their property), not on the gain or increase. In value since they bought it.

[haele]

25. The mortgage escrow account pays the property taxes and insurance.

I'm pretty sure once the mortgage is paid off, one can get another escrow account just to pay taxes, insurance, and perhaps a bit extra for a home and appliance warranty or account for emergency house expenses.

But property taxes are always paid, whether one has a mortgage or not. Ours are due in December of the current year or May of the next, if we want to split it, which some people do if they're expecting a tax refund.

[ProfessorGAC]

47. We Split Our Payments

But, that's because there's no savings in paying it all at once.
We can pay half in April, the other half in August.
But, if I paid the whole thing in April, it's the exact same total.
Especially now that banks are actually paying interest, it's actually cheaper to pay in halves even if just by several dollars.

[Voltaire2]

37. Depends on your mortgage. And it is irrelevant.

You are paying the tax, it is rolled into your mortgage.

Surprisingly, many older people own their homes outright. Their property tax can be the largest expense they have.

[House of Roberts]

45. What 'depends on your mortgage'?

I've paid off three notes on my home, the first mortgage, the second mortgage, and then half the value of the home in my divorce, and now own it outright. Neither the property taxes nor the insurance was ever 'rolled into my mortgage'. They were always paid independently of the house payment. If it is irrelevant then why do I have to pay it?

[Voltaire2]

48. Right. So you put enough down that the bank didn't add an escrow requirement to the mortgage.

Like I said, it depends on your specific mortgage, and it is irrelevant. Either way you are paying the property tax.

[House of Roberts]

68. My ex paid a down payment on the initial purchase of the home

but she bought it from an individual directly without going through a mortgage lender, so no escrow requirement. On the second mortgage, there was enough equity the credit union didn't require one, and on the third, my equity was 50%, so she didn't need one either.
My point was that early in a mortgage, the mortgagee has little to no equity, hence little to no wealth, yet is responsible for the full amount of the property tax, on property not yet owned. It doesn't matter whether there is an escrow requirement. THAT is what is RELEVANT.

[Voltaire2]

69. Yes that sucks.

I agree that property taxes are unfair in many respects. However the point of the op is that wealth taxation is common in the form of property taxes, and not some new form of taxation if it were applied to other non real estate capital.

[lostnfound]

38. That's a very good point. Nt

[Voltaire2]

41. No it is utterly irrelevant.

[BrianTheEVGuy]

21. Well you see...

Wealth taxes are okay when they’re of working people, who are entitled moochers.

Our business and industry leaders like Elon Musk, Jeff Bezos, Mark Zuckerberg and Jamie Dimon should not have to pay taxes because they’re job creators. In fact, we are fortunate to be graced with their intellect and brilliance and should probably pay taxes to them directly for their selfless service to mankind.

There is no bailout, subsidy, payment or loophole that they do not deserve. The idea that they should pay any tax on their wealth is outrageous communism.

[jimfields33]

72. In fairness, Elon musk paid 11 billion in taxes.

Is that a fair amount of tax? I don’t know. Most of us pay income tax of around 13 percent a year after deductions and other things.


I wish we could know what Elon should pay in taxes if he’s not paying enough that would be helpful.

[dpibel]

75. That poor Elon!

It's good he's got people like you to help us understand how put upon he is!

[mn9driver]

26. In Minnesota, renters get a property tax rebate check.

Based on their income and how much they paid in rent. The concept is that their rent reflects the property tax their landlord pays, and that is rebated back to the renter, making their rent more affordable.

So, not so much regressive, as some here believe, at least as far as Minnesota goes, anyway.

[pwb]

27. People who just bought a home have no real equity or wealth in their home.

Yet the tax bill is the same. Trying to put average Americans in the Billionaire Wealth trash class is a stretch.

[Voltaire2]

39. The point is completely the opposite.

For most people the only wealth they have, if they have any wealth, is the unrealized gain on their homes, and their IRA/401Ks, and both of those are taxed, with the taxes deferred on the 401ks.

Billionaires, on the contrary, are not taxed on their billions in capital assets.

[Voltaire2]

49. And also, yes the bank owns most of the wealth at first, but you get to pay the tax for the bank's share too.

It sucks, but what suck's worse is that Elon Musk can use his unrealized capital gains to borrow against, pay just about the lowest interest available on that loan, and never have to pay any taxes on that money, which has quite obviously been realized but is utilizing a special oligarch loophole to avoid taxation.

[dumbcat]

51. Yes, it's a wealth tax, but ......

.... I think most are missing one of the main points of controversy. Property tax is based on wealth, the value of the property (however it is assessed.) But all these property taxes are local or State taxes, not Federal. Most people are talking about a potential future FEDERAL wealth tax. That is a problem because the Constitution only gives the Federal Govt the authority to levy and collect an INCOME tax, not a property or wealth tax. Nothing in the US Constitution prohibits States or localities from levying such a tax.

[JT45242]

54. Regressive wealth tax for sure...

If you live outside a city in an unincorporated area, you take advantage of the roads, police, better education for your employees, etc while paying less in taxes.

Renters pay it to their landlords, usually with a nice upcharge, without any of the potential tax benefits on federal taxes because they paid it as "rent" and not taxes.

See it all the time. There was a large car dealership in the Cincinnati metro area that specifically kept its inventory in a plot of land nestled between incorporated suburbs in township only land to avoid taxes.

[maxrandb]

66. Got mine too

But since I don't have a net worth between $50M to $1B +, the balance due was $0.00

[Sparkly]

76. Congratulations!!

I'm not sure our local taxes are broken down that way, but I'm happy to pay for schools!!

(There is another enterprise in my local vicinity that I believe gets wayyyy too much grant money for doing nothing worthwhile, but I can't win that battle.)

Everything else - I'm glad to be among those who are on the paying-in side.

[Silent Type]

77. Wealth tax drives trumpsters crazy, even though it doesn't impact most of them. I'm beginning to think a tax on stock

shares is less visible, yet produces more tax revenue. But not sure any of this is doable in foreseeable future.

[OAITW r.2.0]

79. I pay my fair share, No complaints, Social compact and all.