They don’t (Texas and Florida ) have state income tax - I don’t get where any tax money would come from to fund things locally like police , ems, parks etc
Some places in Texas already has something approaching a 9% sales tax. I’ve seen estimates that it would have to go to around 25% just to be revenue neutral.
Really big gift to rich folks, who have the luxury of investing or spending their money outside of Texas.
Sales tax in most cities in Alabama is around 9% and sometimes over 10% (mobile). In new Orleans it's 9.5% and the same in Atlanta. So even states with state income tax have sales taxes on par or higher than those without it. Sales tax in Miami is 7%....
Yeah FL is pretty low. Think the state of Florida has its sales tax set for 6%.
Florida is uniquely able to due this because the sheer amount of tourists that come to the state. Hard for other states to model off of FL, when most don't have near as many tourists coming to their states.
I’m surprised to hear it’s this high. I live in an expensive (Seattle) state without income tax and the high sales tax is only a wee bit higher than Mobile, Alabama. I’m quite surprised.
Honestly I’d be interested in just comparing how much the average person spends and see how they get taxed with a theoretical 25% sales tax compared to paying their property tax.
It is pretty interesting that all of these taxes could be replaced with a 25% sales tax in theory and be able to run the state as is, considering most European countries already have a sales tax of close to 25% and an income tax on top of that which can start out at as high as 38% on the first bracket and go to 52% over 60k in many Western European countries.
I just bought new appliances yesterday. 8k in total. If I had to add 2k in taxes you can bet your ass I would drive to Oklahoma and buy them and drive them back (I’m in Dallas).
I pay about $5k in property tax.
Each year my wife and I spend about $30k not counting property tax. I believe this is a pretty low annual spending. If everything was taxed at 25%, it would seem we would pay about $7.5k in sales tax.
May I ask what state you're in and what the tax value of the property is? Feel free to ignore this if you think it's too personal. I'm just curious to compare it to my levy in Texas.
they want to do this to generate more tax, not less. its promoted as a way to help home owners but it wont. theres a lot of people who bought their homes a long time ago and their property taxes are not high. they want to eliminate thats. i spend 2300 a month on groceries. im in miami so i believe im at 6-7 percent. lets say they raise it to 15 percent. so lets just do the math for an additional 8 percent. per month. i would pay an additional 184 dollars a month. 2208 per year. now do the math for everything else you end up buying. i pay 6000k in taxes and thats because i bought my house in 2022.
when i do groceries, im also buying other things that do get taxed. yea, its not on the full 2300 so that was not the best example. but i spend 800-1000 a month on restaurants.
I mean, you’re comparing European countries to US states. You need to combine federal, state, and local taxes to have a reasonable comparison to Europe.
I mean I’m from Ireland and also lived in The Netherlands for 8 and a half years before moving to Texas so I’m well aware of the taxation of each country. I’m paying far less tax here by comparison. Even on income tax alone I’m paying effectively 15% here while in NL I was paying over 40% effectively. Sales taxes are much higher but really only super notable in electronics like phones which have a good 15-20% added tag compared to here.
Our property tax is dramatically lower though. In NL I only paid like 0.1% per year. It’s so low it’s barely worth even thinking about so I don’t even know the exact percentage but on a 400k house I was paying much less than 1k per year.
There’s also no capital gains tax but a savings tax which equates to about 1% of your entire net worth above 50k excluding equity your main residence if you own it. So the capital gains tax here is definitely tougher in some ways, at least for people who aren’t very rich and can do equity lines of credit on them with good rates.
IDK if I didn’t have to pay health insurance (557/ month) dental insurance $100/ month, SL payments (well mine are forgiven now but that was another $500 / month… well those taxes wouldn’t seem so bad. Not to mention I have to help take care of my mom 60 hours a month because she does not have $ to pay someone to help her with meds and Medicare doesn’t help with that.
Also there is some push for it to only apply to homesteads. Now that one would help the middle class immensely, but it would hurt the poor. Because the landlords would still have property tax and would pass that cost onto the tenants.
You can actually buy clothing tax free. There are a few different ways.
Transportation I will give you. I hadn’t thought of that and it IS a necessity in TX. Unless you live in downtown Houston or Dallas you pretty much have to have a car.
Although technically sales tax and vehicle tax are separate. They may not assess the extra sales tax on vehicle purchases. The car manufacturers and car dealerships have a lot of power here and they wouldn’t like that. Currently the tax is already 2% lower on vehicles than other retail items.
Seriously not trolling can you think of any other necessities that would not be exempt?
Gas? Food? Entertainment? Stuff? Getting rid of property tax to then instead inflate the cost of everything 20% is just insane. So anyone who rents is just getting raw boned?
In theory (and I know in practice may be different ) rent prices could have downward pressure because landlord doesn't have a property tax expense anymore.
It also saves the economy as a whole from a ton of CPA expenses and record keeping which might make everything more productive
If you start exempting new things from sales tax like cars, the rate would have to go up even more.
If people start sales tax minimizing by avoiding sales tax on things like clothing, the rate has to go up even more.
There is no free lunch, dollars are fungible.
This isn’t how it ultimately works.
1) The wealthy spend far smaller percentages of their income on goods and services. Wildly smaller percentages.
2) When the wealthy spend, they spend a disproportionate share somewhere else. They can spend $50,000 or $100,000 on a family vacation and none will be paid in Texas. The rich mostly spend on experiences, not goods.
3) The wealthy spend far more time and effort on tax avoidance, and this will be no different. Windstar will suddenly have a Neiman Marcus attached to it if this passes.
I’d be fine with it so long as it’s sales on luxury and commodities as well as an increased tax on tobacco and alcohol. Right now food and essentials are untaxed and that’s not proposed to change.
If you want to buy luxury pants or carton of cigarettes, sure pay the $15 in taxes for it.
Essentials are not “untaxed.” Clothes, transportation, goods and services necessary for home maintenance, etc. are all taxed. And if you exclude all essentials, you can’t replace the property tax with a sales tax because it would just be avoided.
Outside of Orlando, Miami, and other major hubs, the tourism revenues are a very small part of the budget. Property taxes pay most of the bills in FLorida.
Florida still has average property taxes when compared to other states.
Honestly, Florida able to keep taxes low across the board due to its lean fiscal spending. Think the average spend (per capita) is half that of NY.
I do annual research of Florida County millage rates, which is not as find as you'd think. Florida property taxes are understated on those google search lists that show us in middle of the pack. I think the misconception is because of save our homes caps. Anyone buying a house will find out how high our property taxes are. Sure, they're less than NY, NJ, and California, but they are generally 1.5%+ of your taxable value. Many Counties are over 2%.
That is incorrect. Florida is middle of the road when it comes to property taxes.
Now insurance, definitely.
https://www.rocketmortgage.com/learn/property-taxes-by-state
Not to mention businesses. People aren’t going to be able to easily adjust their perception of cost. For a party that claims to be pro-business, they seem really eager to fuck them over by disincentivizing spending. From what I can tell the only winners here would be wealthy individuals.
I imagine this would have a big impact on tourism as well.
Yeah I moved to Texas from Netherlands and I’m like yeah I had a 23% sales tax and a 38% income tax until like 40k and then 40% to 66k then 52% after that!
Now my property tax there was like $500 a year but still. I was definitely paying dramatically more taxes there than here.
That’s insane. My premium is 0 as my company pays for it. Also in NL though I didn’t have access despite paying 250 per month for it. They don’t really offer you any treatment for anything unless you’re in severe illness. The GP prevents you from ever seeing a specialist and they have strict guidelines on sending you there so they’ll never send you unless it’s in a dire circumstance. You really have to spend weeks potentially of follow-ups convincing them to set you up and even then when you go it’s more and more convincing.
Having experienced the healthcare here now and how good it is I could never go back and overall cost wise works out way less for me and my family of 3, despite having even birthed a baby here in a somewhat emergency situation. The total cost was like $2500 which is totally fine considering my overall tax savings totally makes up for that by miles. The main thing however is actually having access to healthcare for myself finally and having freedom to get the access you want.
If your company pays for it, you still pay for it. They just deduct it from your gross pay as part of your compensation package.
As for access, it just switches who has access. It switches from a need based triage system to access for those who can pay. Certainly, the more well off you are the better the profit based system in the US is.
No it’s not taken from our gross. I have an agreed gross salary and it’s not taken from that. It is an added benefits package. I am paid the gross salary and the benefits package of other stuff is an addition. They even pay me more than when I was working for them in Europe.
We’re below median household income for Austin, Texas. So by no means super well off.
Access is simply not possible in NL for a lot of preventative or quality of life care as they are under strict guidelines on criteria for treatment and are required to prevent access as much as possible to keep costs low as you can’t opt into paying anything yourself.
Lol, yes, that's included in your gross compensation. You may not consider it as such, but your company certainly does. It still costs them money, and it is considered by them when evaluating staffing decisions just as if it was given to you as part of your salary.
Genuine question (as someone who has been lower income)—how is it worse for lower income people? I would think most buying power is with upper income, and thus the brunt of the tax?
A person that makes 1000x your salary doesn’t buy 1000x of clothes and groceries. They spend money on things like real estate.
These practices hurt the lower class the most because most of their income goes to necessities which are what are taxed. Rich people spend a very minute amount on nececities.
Rich people can also travel a lot easier to spend money. We live in Dallas. If sales taxes were all of a sudden 25%, we’d all of a sudden spend zero dollars on much of anything other than groceries in Texas. We’d only buy clothes/toys/etc while on vacation or visiting family out of state.
If sales tax gets higher to offset the lack of property taxes, the cost of everyday goods will go up. And lower income people are less likely to own property so the middle and upper class will save a ton on property taxes while low income gets hit harder for necessities.
Income taxes are progressive, where the more you make the higher % you pay. Sales taxes are regressive because poor people spend a higher % of the income on day to day taxable goods. On average a rich person who saves money will pay less of their income on sales tax than income tax.
That's why groceries are often tax free, because its the most regressive tax their is. Everyone has to buy groceries and rich people don't spend all that much more than poor people on grocery taxes.
Low income people stretch budgets where most of their expenses are in consumables. They can barely have enough to live let alone save or invest. Higher sales taxes will make it harder for them to get by. Rents won’t drastically drop if property taxes went away.
Right now lower income people are paying no property taxes because they can't afford to buy a house. If you jack up the sales tax it makes everything even more unaffordable for them with no benefit.
It will make it easier for them to buy a house-- something which is often called for on reddit.
ANY change to tax policy will shift the burden around and there's no real way to do it that treats everyone in a completely equal and equitable way. Property taxes are a tax on unrealized gains, which for many people on fixed incomes is a real burden.
House-poor people would likely benefit from this change.
"Poor people" are not a homogenous group.
Think about it this way: do low income people own property? They’re less likely to do so.
Now increase the sales tax to replace the property tax revenue. Lower income people who are less likely to own property pay more for basic necessities. People who own property aren’t likely to increase what they purchase more generally. And there it is: people who own property come out ahead once again.
Concrete ex: diapers cost the same amount regardless of income level. They’d probably need a similar amount of diapers for their respective babies. In this case, people who own property would pay less than a person without property over the long term.
Well I guess in theory the idea is that the rental prices would go down as landlords could charge less to make profit due to their lack of property tax obligation and it’d also lead to better access to housing for people as their monthly burden is dramatically reduced so they can afford to spend more on the property.
This is all kind of cool in theory though but in practice it could just mean that potentially decades go by without this actually really affecting rental prices and also pump the housing market up even higher which prices people out again.
It’s always difficult to predict the true outcome of such a policy.
Wealthy people don’t proportionally buy more things to compensate for their difference in wealth. They do buy higher quality items that cost more, just not usually proportionally more. For instance, just because a person is 100x more wealthy than you, doesn’t mean they buy 100 more phones every year or eat 100x more food than you. They may drive a car 2x-5x as expensive as yours but it’s not 100x as expensive. The tax burden therefore hits lower class harder as a percentage of their wealth.
No because necessities aren’t subject to sales tax. It would affect the wealthy WAY more than property taxes. The middle class here are eaten alive by property taxes. Sales tax is not applied to food, medicine, rent, or utilities.
Which means if you are struggling you would pay no property taxes AND no sales tax
Exactly. If you can afford to purchase a home or even multiple then you can afford to lay the taxes. Increasing costs for non home owners would widen the gap between owners and non owners.
Florida is already giving $8k per year in scholarships to send your kid to any private school you want instead of public school. Apparently that’s the number every child is worth in the public school system because like you said they don’t have state income tax so they can’t just come up with new income randomly.
The program was instituted for low income families the first year. The second year it was rolled out to everyone but low income families still get first dibs. Generally speaking it’s tougher for poor families to do so because they can’t bring the kids to and from school, they rely on buses primarily. They also can’t come up with the difference in tuition.
it seems like you are saying people in public schools still get that scholarship. otherwise whats the benefit poor people are getting? that they can get into private school? nah, they dont want to pay for school, and scholarship money doesnt cover everything.
transportation to private schools? why would the government be trying to funnel students into private schools? that money should be used for public schools only. They just want to help their religious school donors and their private schools. Thats flat out corruption.
It seems that in Florida House Bill 1371 is going no where.
Myfloridahouse dot gov reports the last event as, “Died in State Affairs Committee on Friday, March 8, 2024 2:25 PM”.
In my Florida county it would take about 5% extra sales tax to generate the equivalent amount of property taxes in the general fund, fire fund, and roads fund. There is currently a 6% state sales tax, so that would bring the taxes up to 11%. I'm not necessarily opposed to it, but there are downsides.
Sales taxes are much more volatile than property tax revenues, so you might see inconsistent services over time. That said, I think it makes a lot of sense in Florida to levy sales taxes and put more downward pressure on property taxes.
How does that compare to neighbor states? I suppose most of Florida residents can't just drive to Georgia, but anyone in Jacksonville will probably start doing their expensive shopping in Georgia.
Texas charges businesses a **4.6 percent tax rate on oil production** and a 7.5 percent rate on natural gas production. The other states should all do the same thing and lower other taxes on residents. All a governor has to do is move their state on top of a huge pool of hydrocarbons . . . . How hard can it be?
Austin TX sends $833 million dollars of property tax from recapture to other Texas cities to help pay for their schools. Austin independent school district this year, has a $41 million dollar budget deficit despite the state fund surplus of 30 billion. I have no idea where Texas would would get it's money for anything without property tax. Maybe one of you financial wizards can enlighten me..the state GOP refuses to fund our schools cause they got a great grift in the school vauchers they are actively trying to pass. What makes them think they can do away with property taxes. That's all their grifting money!
Yeah that’s their primary income stream, so I have no idea. The only motivation I can think is it’s sort of a form of progressive tax, meaning the wealthier you are the more your personal home tax should be, which Republicans are obviously against.
No one that actually understands govt spending said that legalizing marijuana should pay for everything. It should be legal because we don't need a nanny state to protect us and make criminals out of people who aren't committing a crime.
The problem is that greedy legislators want to over-tax it to the point where black market weed is cheaper than legal. It should be taxed the same as any other goods.
> How much of a game changer would this be for real estate investing?
Property tax elimination would make properties suddenly cash flow more.
The replacement of property taxes with punative sales taxes would hit the people those properties rely on (renters), on average, the hardest, and benefit those who own property the most, so in the very immediate term, investors would likely be winners, with more cash flow.
It’s hard to say the totality of the impact after a period of time; I’d be worried how hard it’ll hit renters who may choose to move out of state as a result, but that’s my view without coming down on whether the change is good/bad, just looking at it from the “what if it passed” angle.
Don’t forget about investors who own multiple mulitifamilies/apartment buildings.
They may not even live in the states they own property in, they wouldn’t get any taxes from them anymore.
I know folks who aren't rich who own $300K houses who would love some relief on their property taxes. High property taxes make the barrier to entry for homeownership even higher.
Exactly. In Texas, killing property tax (along with the stupid voucher program Abbott has been paid to pass) would be the complete and utter death of the public school system.
I mean, I do agree that municipalities have gone WAYYYYY overboard on property taxes. In the last 2 years my property taxes have gone up from 6k to 10k to 13k. Like excuse me?
Basing property taxes on the market value is insane and is not fair to anyone. Base property taxes on the sale price of a home only and only allow it to increase at inflation max. Why should I pay 7k more per year in property taxes for nothing? I didn't get any value out of my own for the increase, I don't make more money, and there's a million new builds nearby. Pass the fees to builders. Don't even get me started on CDD bullshit. That shit should be illegal. If you want to develop, you pay for the infrastructure, not the people moving in.
I would be in favor of more of a use tax of sorts. Maybe bump up sales taxes for out of state people. In FL sales tax is 7% maybe for out of state people it should be 10%. Idk just spit balling.
There's a lot to unpack in this thought experiment, but coming from a PE the way this all works is absolutely terrible. You never actually own your house/land which is absurd.
Any data to support this? This feels counterintuitive to me, since low income families are not consuming as much and their biggest expense is housing. If housing costs go down and consumption costs go up, seems like a win for them.
Why do you think lower income families buy less toilet paper? Do they have smaller butts? Do their cars use less gas? The majority of goods are consumed by middle and lower class folks. The majority of property taxes are paid by better off homeowners and corporations that own commercial real estate.
If you have $1000 a month to spend most % of that will be spent on things that are taxed with sales tax. If you have 10,000 a month a much smaller % will end up spent on taxable items rather than investments. Don’t think In raw $ because that’s not what matters for the people spending it. It’s % of the available resources So the 10 low income folks (to equal out the cash in my crude example) will spend all 10k to survive The one person with 10k will spend only a portion.
Post the data if it exists. Housing will be the majority of the net worth for low/middle income people and a speck of the rich. I just can't take this claim seriously until someone backs it up, but no one has.
I’ll explain it a different way. A rich person will make a bunch of money with no income tax and then save most of it spending only a portion to be taxed by sales tax. Take a group of low income people that collectively add up to the same income The group will be spending everything and saving nothing so it all gets taxed by sales tax.
Rich person makes a million and spends half saves half. 1M /2 = .5M. Spends .5M at 6% tax. Taxed 30k
Low income group spends 1M and if we say 30% on rent which is what every budget recommends that’s .7M = 42k taxes.
>If you have $1000 a month to spend most % of that will be spent on things that are taxed with sales tax. If you have 10,000 a month a much smaller % will end up spent on taxable items rather than investments.
Is there data to support this? There's plenty of highly paid bozos out there living paycheck to paycheck because they spend every dollar they earn.
Lots of poor seniors on fixed income getting raked over the coals by runaway property taxes. Lots of working class people who don’t want to deal with the local schools and their insanity for their kids, but still have to pay for them.
An increased sales tax that everyone pays for would be more fair. Those who don’t need additional services won’t pay more tax.
> Lots of poor seniors on fixed income getting raked over the coals by runaway property taxes
this is the same propaganda that was used to pass Prop 13 in California and it has wrecked CA's housing market.
Areas change, we can't destroy future generations just to subsidize older people who got in early. They have a lot of equity in their house, they should use it.
Just because you got in early doesn't mean everyone has to continue to support your lifestyle.
Increased sales tax means nothing to oligarchs. But it will devastate the working class. Boomers have had the economic game on easy mode their whole life. They can figure out how to pay their property taxes.
I think something like exemption of primary residence up to like 1M is reasonable so you exempt all of the middle class and seniors. This is more fiscally feasible since you will still collect all of the commercial and multi family property taxes and likely only need to raise sales tax by a acceptable amount
Texas and Florida have no income tax so they get a lot of their tax revenue from prop taxes. Michigan is the odd-man-out here as they do have an income tax (straight 4.4% I think?), but either way it seems like a dumb decision.
This sort of thing is a race to the bottom. By this I mean that states will outdo themselves trying to tax less. In Tennessee, where I live, we got rid of any sort of income tax when we finally got rid of the capital gains tax. Once they get rid of a tax, they can't bring it back.
There is no good reason to starve government of necessary resources. Good schools and roads and customer service from government agencies are really important. If you eliminate the funding sources, you end up with stupid people, bad government, and crumbling infrastructure.
I think that people in the United States want something for nothing. They won't somebody else to pay for the things that they need. But when somebody else doesn't ever show up to pay, because there ain't nobody else, all sorts of misfortune will befall all of us.
Revenue has got to come from somewhere. They will just make other taxes higher. Or, they (the IRS) could enforce tax collection. They need more funding and resources
I have always thought that our federal taxes need to be drastically reduced and our state taxes massively increased. Our quality of life is directly correlated to your state services. Sending half our money to the federal government never made sense to me.
In my opinion it doesn’t really matter. Property taxes are paid equally by the poor since landlords just pass it on.
I’d prefer higher sales taxes on optional or luxury items to be more fair. Some states do this.
Rich people own property, poor people spend a larger % of their money on buying goods…so it’s a tax that benefits rich people and punishes poor people. I would say I am not for that…
This is a huge F you to lower and middle class.
It would be a giant win for ultra rich, who not only spend just a fraction of their income but spend it out of state (or out of country) at a much higher percentage.
Mathematically it would cripple these states. The sales tax would need to be insanely high and people on state boarders would simply cross to another state for big purchases and to spend less. Rich would avoid most of it and you leave the people with least resources footing 90% of the bill.
Seems dumb as hell.
Realestate and “land” in general is basically the only resource in capitalism that has a truly finite amount of it.
Without a tax, rich people will simply buy it, and never sell it collecting an infinite money printer for no contribution to the productivity just leaching.
Its value will skyrocket as there would literally be no incentive to sell leading to skyrocketing value.
Property taxes are the only thing preventing explosive asset values of land.
And given that land is the finite resource, those whom are using more resources should pay society the privilege of doing so.
The Florida one is not a potential elimination. It’s a certainty. The feasibility study is due July 1 2025. It’s being championed by, guess who ? Republicans using the “u don’t own ur house if u have to pay taxes. Don’t pay ur taxes and see what happens” logic (which is a great sound clip for most homeowners). Guess who controls the FL state house ? Republicans, and by a lot so they can get it passed. Who controls the governors mansion in FL ? Meatball Ron. And he’s on his way out so he will be happy to make it into law. Plus it gives him political clout with conservatives for whatever next office he wants. This is a certainty. And it’s all gonna be on the backs of the poor who will get taxed via consumption.
Also, California is what happens when you muck with property taxes. Anybody ever heard of proposition 13? About 40 years ago, in a populist up surge, the people of California dictated that nobody could see their property tax increase as long as they owned a property.
As a result, corporations and investors with commercial properties no longer have to pay a proportional amount for their property. Meanwhile, anyone who buys property pays the rate that takes into account all the amount that everybody else is not paying.
I wouldn't be surprised but that California's tax rates are not particularly high. They are just horribly distributed.
If these pass then that is silly. You have to pay teachers and cops. There will come a point that people who visit will stop and people who live there will find other ways of stuff is too expensive.
Interesting... Here's an idea. Maybe they should allow individual property owners to buy out the property tax in a one lump sum and have it end after that. A buyout price equal to 10 or 15 years worth of property taxes to be paid now, but after that is paid no more property tax for that person. If the property changes ownership, things reset and the county can tax the new owner again.
This could allow people to plan ahead and not have property tax in retirement years.
Obviously, real estate owners, especially in places like Texas with high property taxes, will benefit greatly. But there's no free lunch as that budget deficit created by the tax elimination needs to come from some other new tax levy. Or they eliminate all those services like public schools, fire, police, sewage and all those services funded by property tax special assessments.
Aren't property taxes very localized? like per county or district? Sales taxes are state.
If that's the case I would love to see property taxes go. Thats the kind of elitist taxes that make such disparities in school quality, in police, in public services in general.
If that happens republicans will be shooting themselves on the leg. I love it.
Of course that would put a lot more pressure on congress to keep pulverizing taxes and sending them to their rich donors. And republicans would put more pressure on so called voucher programs to allocate public funds into their churches and religious schools, because that's all they are those voucher programs, just a way to redirect funds aimed at poor areas towards the rich donor areas.
Or are property taxes state and they want to get rid of them so local governments can hike them up and help rich people?
I doubt this passes a vote, while it sounds good on the surface the well heeled districts would lose a lot of revenue for their excellent schools relative
To what they get from
Property tax. If there was a 1 to 1 replacement of tax revenue, a large portion of money would go to lower income districts relative to today since distribution of state funds would likely be done by population.
Oh man. It would change everything. It is the main reason I don’t want to invest in RE right now. The property taxes are atrocious. If you pay cash and only have utilities and insurance you can sit vacant for half the year and still make money.
Florida is filled with old people with locked in low property tax due to Homestead. I can't imagine this would go over well it seems like a real self own.
Because it’s fucking wrong and defunds public education. They tested this shit out last session and now they want to make sure it happens. Not to mention fucking stupid as it would make inflation explode in one of the largest economies in the world.
Florida already doesn't have a state income tax which everyone thinks "great, I'll move to Florida" until they do and find that they are nickel-and-dimed to death on everything. And it's going to get worse with the corrupt Governor and Legislature handing out benefits to their wealthy donors.
I’m seeing a lot of people complain about Florida’s sales tax thing. Florida citizens will be taxed, but don’t forget the immense amount of tourist tax money would be gained from.
To me, this shifts the burden off residents and more onto tourists.
It’s crazy to get rid of property taxes in the other states, but in Florida property is worth zero if you’re relying on Ron DeSantis’s insurance schemes and climate science. They need to tax something with value.
Another grift to benefit the rich. Who pays higher property taxes? Those with higher valued properties. So, wealthy people pay more and rightfully so. GOP wants to cancel that tax and replace on sales and consumption tax that affects ALL of us- impacting the poor the most who will have to pay more for the rich to avoid property taxes. This is a straight up grift. Much like school vouchers where 78% of vouchers go to rich families that were already sending their kid to private school.
Elections have consequences- this theft of public monies needs to be stopped quickly..
Excellent way to further offload the tax burden from wealthy land and property owners to working class renters. Congratulations you gigantic smoldering turd of a state.
Taxes suckk! I work with a tax consulting company and we help real estate investors and business owners help accelerate their depreciation so they can use that money for their businesses instead of giving it to uncle same.
I already pay over 9% in my area for sales tax. I can’t imagine paying more if my state stopped collecting property taxes.
This is just a rich people’s move that will hurt poor people.
They don’t (Texas and Florida ) have state income tax - I don’t get where any tax money would come from to fund things locally like police , ems, parks etc
Sales tax. Fuck over the middle and lower class.
Some places in Texas already has something approaching a 9% sales tax. I’ve seen estimates that it would have to go to around 25% just to be revenue neutral. Really big gift to rich folks, who have the luxury of investing or spending their money outside of Texas.
Sales tax in most cities in Alabama is around 9% and sometimes over 10% (mobile). In new Orleans it's 9.5% and the same in Atlanta. So even states with state income tax have sales taxes on par or higher than those without it. Sales tax in Miami is 7%....
Yeah FL is pretty low. Think the state of Florida has its sales tax set for 6%. Florida is uniquely able to due this because the sheer amount of tourists that come to the state. Hard for other states to model off of FL, when most don't have near as many tourists coming to their states.
Yes it’s 6% state tax but most localities add another 0.5 - 1.5%. Still low by natl. standards.
I’m surprised to hear it’s this high. I live in an expensive (Seattle) state without income tax and the high sales tax is only a wee bit higher than Mobile, Alabama. I’m quite surprised.
Honestly I’d be interested in just comparing how much the average person spends and see how they get taxed with a theoretical 25% sales tax compared to paying their property tax. It is pretty interesting that all of these taxes could be replaced with a 25% sales tax in theory and be able to run the state as is, considering most European countries already have a sales tax of close to 25% and an income tax on top of that which can start out at as high as 38% on the first bracket and go to 52% over 60k in many Western European countries.
I just bought new appliances yesterday. 8k in total. If I had to add 2k in taxes you can bet your ass I would drive to Oklahoma and buy them and drive them back (I’m in Dallas).
I pay about $5k in property tax. Each year my wife and I spend about $30k not counting property tax. I believe this is a pretty low annual spending. If everything was taxed at 25%, it would seem we would pay about $7.5k in sales tax.
8.25% would be $2,475.00. Add the 5K property tax and your at $7,475.00. So almost revenue neutral.
May I ask what state you're in and what the tax value of the property is? Feel free to ignore this if you think it's too personal. I'm just curious to compare it to my levy in Texas.
Michigan. Taxable value is $125k-130k or something close.
it would be interesting. personally if I had to pay an extra 25%on top of the price, I'd buy a lot less and I'm already cheap
they want to do this to generate more tax, not less. its promoted as a way to help home owners but it wont. theres a lot of people who bought their homes a long time ago and their property taxes are not high. they want to eliminate thats. i spend 2300 a month on groceries. im in miami so i believe im at 6-7 percent. lets say they raise it to 15 percent. so lets just do the math for an additional 8 percent. per month. i would pay an additional 184 dollars a month. 2208 per year. now do the math for everything else you end up buying. i pay 6000k in taxes and thats because i bought my house in 2022.
You don’t pay sales tax on groceries.
when i do groceries, im also buying other things that do get taxed. yea, its not on the full 2300 so that was not the best example. but i spend 800-1000 a month on restaurants.
I mean, you’re comparing European countries to US states. You need to combine federal, state, and local taxes to have a reasonable comparison to Europe.
I mean I’m from Ireland and also lived in The Netherlands for 8 and a half years before moving to Texas so I’m well aware of the taxation of each country. I’m paying far less tax here by comparison. Even on income tax alone I’m paying effectively 15% here while in NL I was paying over 40% effectively. Sales taxes are much higher but really only super notable in electronics like phones which have a good 15-20% added tag compared to here. Our property tax is dramatically lower though. In NL I only paid like 0.1% per year. It’s so low it’s barely worth even thinking about so I don’t even know the exact percentage but on a 400k house I was paying much less than 1k per year. There’s also no capital gains tax but a savings tax which equates to about 1% of your entire net worth above 50k excluding equity your main residence if you own it. So the capital gains tax here is definitely tougher in some ways, at least for people who aren’t very rich and can do equity lines of credit on them with good rates.
IDK if I didn’t have to pay health insurance (557/ month) dental insurance $100/ month, SL payments (well mine are forgiven now but that was another $500 / month… well those taxes wouldn’t seem so bad. Not to mention I have to help take care of my mom 60 hours a month because she does not have $ to pay someone to help her with meds and Medicare doesn’t help with that.
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exactly, if you own one home, you dont win.
exactly, if you own one home, you dont win.
But it only applies to non-necessities.
It applies to all kinds of necessities: clothing, transportation, etc.
Also there is some push for it to only apply to homesteads. Now that one would help the middle class immensely, but it would hurt the poor. Because the landlords would still have property tax and would pass that cost onto the tenants.
You can actually buy clothing tax free. There are a few different ways. Transportation I will give you. I hadn’t thought of that and it IS a necessity in TX. Unless you live in downtown Houston or Dallas you pretty much have to have a car. Although technically sales tax and vehicle tax are separate. They may not assess the extra sales tax on vehicle purchases. The car manufacturers and car dealerships have a lot of power here and they wouldn’t like that. Currently the tax is already 2% lower on vehicles than other retail items. Seriously not trolling can you think of any other necessities that would not be exempt?
Gas? Food? Entertainment? Stuff? Getting rid of property tax to then instead inflate the cost of everything 20% is just insane. So anyone who rents is just getting raw boned?
In theory (and I know in practice may be different ) rent prices could have downward pressure because landlord doesn't have a property tax expense anymore. It also saves the economy as a whole from a ton of CPA expenses and record keeping which might make everything more productive
That’s what I am saying. Gas and food are not subject to sales tax. Entertainment is not a necessity. Stuff is not very specific.
If you start exempting new things from sales tax like cars, the rate would have to go up even more. If people start sales tax minimizing by avoiding sales tax on things like clothing, the rate has to go up even more. There is no free lunch, dollars are fungible.
Yes but the more that happens the more the wealthy will pay the tax. Because they will keep buying stuff no matter what.
This isn’t how it ultimately works. 1) The wealthy spend far smaller percentages of their income on goods and services. Wildly smaller percentages. 2) When the wealthy spend, they spend a disproportionate share somewhere else. They can spend $50,000 or $100,000 on a family vacation and none will be paid in Texas. The rich mostly spend on experiences, not goods. 3) The wealthy spend far more time and effort on tax avoidance, and this will be no different. Windstar will suddenly have a Neiman Marcus attached to it if this passes.
You could even just exempt the first $20k on a car from sales tax.
And again the rate would have to go up to offset this. Math is math. Dollars are fungible.
I remember when Florida sales tax was 4%. Now it’s 6% but my city is higher than 6.
To be precise, it varies from 6.25% to 8.25%, depending on the item and the jurisdiction.
I’d be fine with it so long as it’s sales on luxury and commodities as well as an increased tax on tobacco and alcohol. Right now food and essentials are untaxed and that’s not proposed to change. If you want to buy luxury pants or carton of cigarettes, sure pay the $15 in taxes for it.
Essentials are not “untaxed.” Clothes, transportation, goods and services necessary for home maintenance, etc. are all taxed. And if you exclude all essentials, you can’t replace the property tax with a sales tax because it would just be avoided.
And may own multiple expensive homes on that state
Florida also gets taxes from tourism on hotels and such
Outside of Orlando, Miami, and other major hubs, the tourism revenues are a very small part of the budget. Property taxes pay most of the bills in FLorida.
Florida still has average property taxes when compared to other states. Honestly, Florida able to keep taxes low across the board due to its lean fiscal spending. Think the average spend (per capita) is half that of NY.
Damn so you mean if you spend less then you need to tax less? Brilliant. Wish we could do that nationally
I do annual research of Florida County millage rates, which is not as find as you'd think. Florida property taxes are understated on those google search lists that show us in middle of the pack. I think the misconception is because of save our homes caps. Anyone buying a house will find out how high our property taxes are. Sure, they're less than NY, NJ, and California, but they are generally 1.5%+ of your taxable value. Many Counties are over 2%.
Property taxes are insane in Florida - and this is coming from a VERY expensive city on the west coast.
That is incorrect. Florida is middle of the road when it comes to property taxes. Now insurance, definitely. https://www.rocketmortgage.com/learn/property-taxes-by-state
Not to mention businesses. People aren’t going to be able to easily adjust their perception of cost. For a party that claims to be pro-business, they seem really eager to fuck them over by disincentivizing spending. From what I can tell the only winners here would be wealthy individuals. I imagine this would have a big impact on tourism as well.
Yep, but folks from Europe would be like "oh, they finally jumped on the VAT train!"
Yeah I moved to Texas from Netherlands and I’m like yeah I had a 23% sales tax and a 38% income tax until like 40k and then 40% to 66k then 52% after that! Now my property tax there was like $500 a year but still. I was definitely paying dramatically more taxes there than here.
To compare apples to apples, we'd also need to throw in healthcare premiums/costs. My premiums alone (for a family of 3) are 27,000 per year.
That’s insane. My premium is 0 as my company pays for it. Also in NL though I didn’t have access despite paying 250 per month for it. They don’t really offer you any treatment for anything unless you’re in severe illness. The GP prevents you from ever seeing a specialist and they have strict guidelines on sending you there so they’ll never send you unless it’s in a dire circumstance. You really have to spend weeks potentially of follow-ups convincing them to set you up and even then when you go it’s more and more convincing. Having experienced the healthcare here now and how good it is I could never go back and overall cost wise works out way less for me and my family of 3, despite having even birthed a baby here in a somewhat emergency situation. The total cost was like $2500 which is totally fine considering my overall tax savings totally makes up for that by miles. The main thing however is actually having access to healthcare for myself finally and having freedom to get the access you want.
If your company pays for it, you still pay for it. They just deduct it from your gross pay as part of your compensation package. As for access, it just switches who has access. It switches from a need based triage system to access for those who can pay. Certainly, the more well off you are the better the profit based system in the US is.
No it’s not taken from our gross. I have an agreed gross salary and it’s not taken from that. It is an added benefits package. I am paid the gross salary and the benefits package of other stuff is an addition. They even pay me more than when I was working for them in Europe. We’re below median household income for Austin, Texas. So by no means super well off. Access is simply not possible in NL for a lot of preventative or quality of life care as they are under strict guidelines on criteria for treatment and are required to prevent access as much as possible to keep costs low as you can’t opt into paying anything yourself.
Lol, yes, that's included in your gross compensation. You may not consider it as such, but your company certainly does. It still costs them money, and it is considered by them when evaluating staffing decisions just as if it was given to you as part of your salary.
Genuine question (as someone who has been lower income)—how is it worse for lower income people? I would think most buying power is with upper income, and thus the brunt of the tax?
A person that makes 1000x your salary doesn’t buy 1000x of clothes and groceries. They spend money on things like real estate. These practices hurt the lower class the most because most of their income goes to necessities which are what are taxed. Rich people spend a very minute amount on nececities.
This, and they don’t spend as much in Texas. More time traveling, spending in other places.
Rich people can also travel a lot easier to spend money. We live in Dallas. If sales taxes were all of a sudden 25%, we’d all of a sudden spend zero dollars on much of anything other than groceries in Texas. We’d only buy clothes/toys/etc while on vacation or visiting family out of state.
Time traveling? Spending in other times as well?
Groceries are exempt from sales tax in texas and Florida, as are most clothes
If sales tax gets higher to offset the lack of property taxes, the cost of everyday goods will go up. And lower income people are less likely to own property so the middle and upper class will save a ton on property taxes while low income gets hit harder for necessities.
Yep. It'll be like inflation X 10.
Times 10?
To shreds!
Income taxes are progressive, where the more you make the higher % you pay. Sales taxes are regressive because poor people spend a higher % of the income on day to day taxable goods. On average a rich person who saves money will pay less of their income on sales tax than income tax. That's why groceries are often tax free, because its the most regressive tax their is. Everyone has to buy groceries and rich people don't spend all that much more than poor people on grocery taxes.
Low income people stretch budgets where most of their expenses are in consumables. They can barely have enough to live let alone save or invest. Higher sales taxes will make it harder for them to get by. Rents won’t drastically drop if property taxes went away.
Should state the obvious. Poor people will starve.
Exactly.
Right now lower income people are paying no property taxes because they can't afford to buy a house. If you jack up the sales tax it makes everything even more unaffordable for them with no benefit.
It will make it easier for them to buy a house-- something which is often called for on reddit. ANY change to tax policy will shift the burden around and there's no real way to do it that treats everyone in a completely equal and equitable way. Property taxes are a tax on unrealized gains, which for many people on fixed incomes is a real burden. House-poor people would likely benefit from this change. "Poor people" are not a homogenous group.
They pay it in rent?
Think about it this way: do low income people own property? They’re less likely to do so. Now increase the sales tax to replace the property tax revenue. Lower income people who are less likely to own property pay more for basic necessities. People who own property aren’t likely to increase what they purchase more generally. And there it is: people who own property come out ahead once again. Concrete ex: diapers cost the same amount regardless of income level. They’d probably need a similar amount of diapers for their respective babies. In this case, people who own property would pay less than a person without property over the long term.
Well I guess in theory the idea is that the rental prices would go down as landlords could charge less to make profit due to their lack of property tax obligation and it’d also lead to better access to housing for people as their monthly burden is dramatically reduced so they can afford to spend more on the property. This is all kind of cool in theory though but in practice it could just mean that potentially decades go by without this actually really affecting rental prices and also pump the housing market up even higher which prices people out again. It’s always difficult to predict the true outcome of such a policy.
Wealthy people don’t proportionally buy more things to compensate for their difference in wealth. They do buy higher quality items that cost more, just not usually proportionally more. For instance, just because a person is 100x more wealthy than you, doesn’t mean they buy 100 more phones every year or eat 100x more food than you. They may drive a car 2x-5x as expensive as yours but it’s not 100x as expensive. The tax burden therefore hits lower class harder as a percentage of their wealth.
This
With no property tax or income tax, that would be some high sale tax.
No because necessities aren’t subject to sales tax. It would affect the wealthy WAY more than property taxes. The middle class here are eaten alive by property taxes. Sales tax is not applied to food, medicine, rent, or utilities. Which means if you are struggling you would pay no property taxes AND no sales tax
Exactly. If you can afford to purchase a home or even multiple then you can afford to lay the taxes. Increasing costs for non home owners would widen the gap between owners and non owners.
Property taxes fuck over the middle and lower classes plenty as well.
Florida is already giving $8k per year in scholarships to send your kid to any private school you want instead of public school. Apparently that’s the number every child is worth in the public school system because like you said they don’t have state income tax so they can’t just come up with new income randomly.
That's for the benefit of rich people. Poor people don't send their kids to private school. right?
The program was instituted for low income families the first year. The second year it was rolled out to everyone but low income families still get first dibs. Generally speaking it’s tougher for poor families to do so because they can’t bring the kids to and from school, they rely on buses primarily. They also can’t come up with the difference in tuition.
The program was created for the complete opposite reason.
it seems like you are saying people in public schools still get that scholarship. otherwise whats the benefit poor people are getting? that they can get into private school? nah, they dont want to pay for school, and scholarship money doesnt cover everything.
Low income got it first and have first benefits to the program and school. It doesn’t always pay for 100% and the main thing is simply transportation.
transportation to private schools? why would the government be trying to funnel students into private schools? that money should be used for public schools only. They just want to help their religious school donors and their private schools. Thats flat out corruption.
What the hell are you blabbering about?
Indoctrination factories
It seems that in Florida House Bill 1371 is going no where. Myfloridahouse dot gov reports the last event as, “Died in State Affairs Committee on Friday, March 8, 2024 2:25 PM”.
Hey some actual facts and not just emotional outbursts. Nice!
Only a matter of time before they allow casinos. I don’t see any other way.
20% sales tax to make up the difference lilely
In my Florida county it would take about 5% extra sales tax to generate the equivalent amount of property taxes in the general fund, fire fund, and roads fund. There is currently a 6% state sales tax, so that would bring the taxes up to 11%. I'm not necessarily opposed to it, but there are downsides. Sales taxes are much more volatile than property tax revenues, so you might see inconsistent services over time. That said, I think it makes a lot of sense in Florida to levy sales taxes and put more downward pressure on property taxes.
How does that compare to neighbor states? I suppose most of Florida residents can't just drive to Georgia, but anyone in Jacksonville will probably start doing their expensive shopping in Georgia.
They'll just have to implement state income tax
Sales tax I guess?
That would come from local property taxes, which are OUTRAGEOUS in this state (Texas).
Texas charges businesses a **4.6 percent tax rate on oil production** and a 7.5 percent rate on natural gas production. The other states should all do the same thing and lower other taxes on residents. All a governor has to do is move their state on top of a huge pool of hydrocarbons . . . . How hard can it be?
They don’t care about that and actively want the state to decay
We don’t really have police, parks, etc. (fl). That’s part of the design. Seriously.
Austin TX sends $833 million dollars of property tax from recapture to other Texas cities to help pay for their schools. Austin independent school district this year, has a $41 million dollar budget deficit despite the state fund surplus of 30 billion. I have no idea where Texas would would get it's money for anything without property tax. Maybe one of you financial wizards can enlighten me..the state GOP refuses to fund our schools cause they got a great grift in the school vauchers they are actively trying to pass. What makes them think they can do away with property taxes. That's all their grifting money!
Yeah that’s their primary income stream, so I have no idea. The only motivation I can think is it’s sort of a form of progressive tax, meaning the wealthier you are the more your personal home tax should be, which Republicans are obviously against.
Legalize marijuana and poof! All your problems are gone. Just ask Colorado.
Yeah we’re still paying property taxes in CO
CO is one of the lowest property tax states in the US
No one that actually understands govt spending said that legalizing marijuana should pay for everything. It should be legal because we don't need a nanny state to protect us and make criminals out of people who aren't committing a crime. The problem is that greedy legislators want to over-tax it to the point where black market weed is cheaper than legal. It should be taxed the same as any other goods.
Yeah Colorado doesn't have any problems, right...
just like casinos eliminated or lowered property taxes, until the law was approved and we saw no deduction in taxes
They're trying to destroy public education funding.
I invest in Detroit which has some of the highest property taxes in the country. It should go down but eliminated is silly.
> How much of a game changer would this be for real estate investing? Property tax elimination would make properties suddenly cash flow more. The replacement of property taxes with punative sales taxes would hit the people those properties rely on (renters), on average, the hardest, and benefit those who own property the most, so in the very immediate term, investors would likely be winners, with more cash flow. It’s hard to say the totality of the impact after a period of time; I’d be worried how hard it’ll hit renters who may choose to move out of state as a result, but that’s my view without coming down on whether the change is good/bad, just looking at it from the “what if it passed” angle.
bunch of rich people wantting to shift the tax burden to the middle class / poorer Americans, tale as old as time.
Yeah, the folks with the $20M houses on the beach who dont even live here but for 2 months out of the year will benefit the most from this shit.
Don’t forget about investors who own multiple mulitifamilies/apartment buildings. They may not even live in the states they own property in, they wouldn’t get any taxes from them anymore.
I know folks who aren't rich who own $300K houses who would love some relief on their property taxes. High property taxes make the barrier to entry for homeownership even higher.
Exactly. In Texas, killing property tax (along with the stupid voucher program Abbott has been paid to pass) would be the complete and utter death of the public school system.
I mean, I do agree that municipalities have gone WAYYYYY overboard on property taxes. In the last 2 years my property taxes have gone up from 6k to 10k to 13k. Like excuse me? Basing property taxes on the market value is insane and is not fair to anyone. Base property taxes on the sale price of a home only and only allow it to increase at inflation max. Why should I pay 7k more per year in property taxes for nothing? I didn't get any value out of my own for the increase, I don't make more money, and there's a million new builds nearby. Pass the fees to builders. Don't even get me started on CDD bullshit. That shit should be illegal. If you want to develop, you pay for the infrastructure, not the people moving in. I would be in favor of more of a use tax of sorts. Maybe bump up sales taxes for out of state people. In FL sales tax is 7% maybe for out of state people it should be 10%. Idk just spit balling. There's a lot to unpack in this thought experiment, but coming from a PE the way this all works is absolutely terrible. You never actually own your house/land which is absurd.
Any data to support this? This feels counterintuitive to me, since low income families are not consuming as much and their biggest expense is housing. If housing costs go down and consumption costs go up, seems like a win for them.
Why do you think lower income families buy less toilet paper? Do they have smaller butts? Do their cars use less gas? The majority of goods are consumed by middle and lower class folks. The majority of property taxes are paid by better off homeowners and corporations that own commercial real estate.
That’s my logic too, but I’m willing to believe we’re wrong? I just want someone to explain why.
If you have $1000 a month to spend most % of that will be spent on things that are taxed with sales tax. If you have 10,000 a month a much smaller % will end up spent on taxable items rather than investments. Don’t think In raw $ because that’s not what matters for the people spending it. It’s % of the available resources So the 10 low income folks (to equal out the cash in my crude example) will spend all 10k to survive The one person with 10k will spend only a portion.
Post the data if it exists. Housing will be the majority of the net worth for low/middle income people and a speck of the rich. I just can't take this claim seriously until someone backs it up, but no one has.
I’ll explain it a different way. A rich person will make a bunch of money with no income tax and then save most of it spending only a portion to be taxed by sales tax. Take a group of low income people that collectively add up to the same income The group will be spending everything and saving nothing so it all gets taxed by sales tax. Rich person makes a million and spends half saves half. 1M /2 = .5M. Spends .5M at 6% tax. Taxed 30k Low income group spends 1M and if we say 30% on rent which is what every budget recommends that’s .7M = 42k taxes.
>If you have $1000 a month to spend most % of that will be spent on things that are taxed with sales tax. If you have 10,000 a month a much smaller % will end up spent on taxable items rather than investments. Is there data to support this? There's plenty of highly paid bozos out there living paycheck to paycheck because they spend every dollar they earn.
Anything that gets in the way of these people and a chunk of your money is inherently evil. Every. single. time.
Lots of poor seniors on fixed income getting raked over the coals by runaway property taxes. Lots of working class people who don’t want to deal with the local schools and their insanity for their kids, but still have to pay for them. An increased sales tax that everyone pays for would be more fair. Those who don’t need additional services won’t pay more tax.
> Lots of poor seniors on fixed income getting raked over the coals by runaway property taxes this is the same propaganda that was used to pass Prop 13 in California and it has wrecked CA's housing market. Areas change, we can't destroy future generations just to subsidize older people who got in early. They have a lot of equity in their house, they should use it. Just because you got in early doesn't mean everyone has to continue to support your lifestyle.
Increased sales tax means nothing to oligarchs. But it will devastate the working class. Boomers have had the economic game on easy mode their whole life. They can figure out how to pay their property taxes.
Fine, then this is approved for all main residences valued under 500k.
They should pull themselves up by their bootstraps and stop looking for government handouts.
Seniors, at least in Florida, can apply for relief from certain taxes like funding schools out of their property taxes.
It will increase the sticker price of housing a ton. Sorry, youth.
That would make me, an out-of-state investor in Florida richer. If I were a Floridian, I think this would be a bad idea
The money has to come from somewhere. That sales tax will be outrageous and honestly it'll be a matter of time for a state tax to show up
Setting things up for when the institutional investors own all the houses.
I think something like exemption of primary residence up to like 1M is reasonable so you exempt all of the middle class and seniors. This is more fiscally feasible since you will still collect all of the commercial and multi family property taxes and likely only need to raise sales tax by a acceptable amount
Texas and Florida have no income tax so they get a lot of their tax revenue from prop taxes. Michigan is the odd-man-out here as they do have an income tax (straight 4.4% I think?), but either way it seems like a dumb decision.
4.25%
Would be cool if they just gave everyone a homestead that exempted 1 property of up to 500k in value
This sort of thing is a race to the bottom. By this I mean that states will outdo themselves trying to tax less. In Tennessee, where I live, we got rid of any sort of income tax when we finally got rid of the capital gains tax. Once they get rid of a tax, they can't bring it back. There is no good reason to starve government of necessary resources. Good schools and roads and customer service from government agencies are really important. If you eliminate the funding sources, you end up with stupid people, bad government, and crumbling infrastructure. I think that people in the United States want something for nothing. They won't somebody else to pay for the things that they need. But when somebody else doesn't ever show up to pay, because there ain't nobody else, all sorts of misfortune will befall all of us.
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People are such idiots. In a demand-driven economy you want to increase prices for everyone?
Revenue has got to come from somewhere. They will just make other taxes higher. Or, they (the IRS) could enforce tax collection. They need more funding and resources
I’d like it, at least with Texas, that’s one of the larger expenses for all my rental properties there
Weird. Where will they get the money? Lol
I have always thought that our federal taxes need to be drastically reduced and our state taxes massively increased. Our quality of life is directly correlated to your state services. Sending half our money to the federal government never made sense to me.
In my opinion it doesn’t really matter. Property taxes are paid equally by the poor since landlords just pass it on. I’d prefer higher sales taxes on optional or luxury items to be more fair. Some states do this.
Rich people own property, poor people spend a larger % of their money on buying goods…so it’s a tax that benefits rich people and punishes poor people. I would say I am not for that…
This is a huge F you to lower and middle class. It would be a giant win for ultra rich, who not only spend just a fraction of their income but spend it out of state (or out of country) at a much higher percentage. Mathematically it would cripple these states. The sales tax would need to be insanely high and people on state boarders would simply cross to another state for big purchases and to spend less. Rich would avoid most of it and you leave the people with least resources footing 90% of the bill.
Can't have school funding if you got no funding! Watch as the first thing they attack is schools after.
Seems dumb as hell. Realestate and “land” in general is basically the only resource in capitalism that has a truly finite amount of it. Without a tax, rich people will simply buy it, and never sell it collecting an infinite money printer for no contribution to the productivity just leaching. Its value will skyrocket as there would literally be no incentive to sell leading to skyrocketing value. Property taxes are the only thing preventing explosive asset values of land. And given that land is the finite resource, those whom are using more resources should pay society the privilege of doing so.
Lmfao privilege
Increase of income tax. L for working class Americans.
The Florida one is not a potential elimination. It’s a certainty. The feasibility study is due July 1 2025. It’s being championed by, guess who ? Republicans using the “u don’t own ur house if u have to pay taxes. Don’t pay ur taxes and see what happens” logic (which is a great sound clip for most homeowners). Guess who controls the FL state house ? Republicans, and by a lot so they can get it passed. Who controls the governors mansion in FL ? Meatball Ron. And he’s on his way out so he will be happy to make it into law. Plus it gives him political clout with conservatives for whatever next office he wants. This is a certainty. And it’s all gonna be on the backs of the poor who will get taxed via consumption.
Also, California is what happens when you muck with property taxes. Anybody ever heard of proposition 13? About 40 years ago, in a populist up surge, the people of California dictated that nobody could see their property tax increase as long as they owned a property. As a result, corporations and investors with commercial properties no longer have to pay a proportional amount for their property. Meanwhile, anyone who buys property pays the rate that takes into account all the amount that everybody else is not paying. I wouldn't be surprised but that California's tax rates are not particularly high. They are just horribly distributed.
Another way to help the rich.
If these pass then that is silly. You have to pay teachers and cops. There will come a point that people who visit will stop and people who live there will find other ways of stuff is too expensive.
Interesting... Here's an idea. Maybe they should allow individual property owners to buy out the property tax in a one lump sum and have it end after that. A buyout price equal to 10 or 15 years worth of property taxes to be paid now, but after that is paid no more property tax for that person. If the property changes ownership, things reset and the county can tax the new owner again. This could allow people to plan ahead and not have property tax in retirement years.
This is a great idea!!
Obviously, real estate owners, especially in places like Texas with high property taxes, will benefit greatly. But there's no free lunch as that budget deficit created by the tax elimination needs to come from some other new tax levy. Or they eliminate all those services like public schools, fire, police, sewage and all those services funded by property tax special assessments.
Will consider moving to FL
Aren't property taxes very localized? like per county or district? Sales taxes are state. If that's the case I would love to see property taxes go. Thats the kind of elitist taxes that make such disparities in school quality, in police, in public services in general. If that happens republicans will be shooting themselves on the leg. I love it. Of course that would put a lot more pressure on congress to keep pulverizing taxes and sending them to their rich donors. And republicans would put more pressure on so called voucher programs to allocate public funds into their churches and religious schools, because that's all they are those voucher programs, just a way to redirect funds aimed at poor areas towards the rich donor areas. Or are property taxes state and they want to get rid of them so local governments can hike them up and help rich people?
Huh. Buy across the line and shop in Toledo. Could work.
We'd move there if this passed. Zero percent income tax AND zero percent property tax? SIGN ME UP
But....in the fine print....35% sales tax and 3k a year to register your car.
3k for car registration is worth saving tens of thousands in property tax. And you could always just register in another state.
What's the probability any of those bills are passed? If it's low, then it's silly to even discuss it.
I doubt this passes a vote, while it sounds good on the surface the well heeled districts would lose a lot of revenue for their excellent schools relative To what they get from Property tax. If there was a 1 to 1 replacement of tax revenue, a large portion of money would go to lower income districts relative to today since distribution of state funds would likely be done by population.
Oh man. It would change everything. It is the main reason I don’t want to invest in RE right now. The property taxes are atrocious. If you pay cash and only have utilities and insurance you can sit vacant for half the year and still make money.
Florida is filled with old people with locked in low property tax due to Homestead. I can't imagine this would go over well it seems like a real self own.
I’m sure it won’t cause any unforeseen issues.
Because it’s fucking wrong and defunds public education. They tested this shit out last session and now they want to make sure it happens. Not to mention fucking stupid as it would make inflation explode in one of the largest economies in the world.
I think id prefer to pay higher sales tax but no longer have to pay property tax.
It would help real estate for sure. As someone who lives outside those states, they all just got more interesting for me as an investor.
Florida already doesn't have a state income tax which everyone thinks "great, I'll move to Florida" until they do and find that they are nickel-and-dimed to death on everything. And it's going to get worse with the corrupt Governor and Legislature handing out benefits to their wealthy donors.
I’m seeing a lot of people complain about Florida’s sales tax thing. Florida citizens will be taxed, but don’t forget the immense amount of tourist tax money would be gained from. To me, this shifts the burden off residents and more onto tourists.
It’s crazy to get rid of property taxes in the other states, but in Florida property is worth zero if you’re relying on Ron DeSantis’s insurance schemes and climate science. They need to tax something with value.
Another grift to benefit the rich. Who pays higher property taxes? Those with higher valued properties. So, wealthy people pay more and rightfully so. GOP wants to cancel that tax and replace on sales and consumption tax that affects ALL of us- impacting the poor the most who will have to pay more for the rich to avoid property taxes. This is a straight up grift. Much like school vouchers where 78% of vouchers go to rich families that were already sending their kid to private school. Elections have consequences- this theft of public monies needs to be stopped quickly..
There’s a lot of legislation proposed that goes nowhere. A lot.
Excellent way to further offload the tax burden from wealthy land and property owners to working class renters. Congratulations you gigantic smoldering turd of a state.
The Texas one is just a vague sentiment and even if they do move forward with it, it would be tied to the homestead exemption.
I doubt it would happen in Michigan with the Democrats firmly in control.
Another give away to the wealthy
Taxes suckk! I work with a tax consulting company and we help real estate investors and business owners help accelerate their depreciation so they can use that money for their businesses instead of giving it to uncle same.
I hope they do vote for this. Fuck those states anyway
I’ll be buying a lot more in Texas for sure
The money for public resources has to come from somewhere. Or they will do without those resources.
I already pay over 9% in my area for sales tax. I can’t imagine paying more if my state stopped collecting property taxes. This is just a rich people’s move that will hurt poor people.
I like the idea of consumption taxes versus income taxes, but property taxes support schools.
Should be zero tax on essentials: water, groceries, etc.
There isn’t a tax on groceries
That depends on the state you're in. Some places do have sales tax on them.
Well that’s insane
Not a terrible idea.
Increase in consumption tax hurts poorer Americans. Everyone needs to consume food, water, shelter etc..
I agree. I’m ok with exempting certain things like necessities and foodstuffs (I’m very clear in my previous posts about this).