Bungalow folks cling to lake lots - a better tax plan needed

[Long Island Mike]

Interesting idea concerning property taxes...

Admiral Beez: Interesting article and idea concerning high property taxes-I felt that I was reading a typical Long Island rant concerning property taxes-Nassau and Suffolk Counties,NY have some of the USA's highest property taxes and I agree about use of services-70 plus percent of LI property taxes are used to fund schools-I feel that there should be some discerning of usage concerning the school tax funding percentage-in that a household with three school-age children should contribute more then a retiree with no children on a fixed income should as a good example.

I agree that a gains tax is a good idea-especially if that long time property owner sells out. But I feel if the house is passed down to a family member a regressive inheritance tax can complicate matters.

I have relatives here on LI who are seniors that to make enough money to pay their tax bill and supplement their income have converted part of their house to an illegal apartment-they rent to a thirtysomething couple who would not be able to afford to stay on LI even though they have decent white-collar jobs.

Due to a housing shortage illegal apartments have become a mainstay in some communities-in more wealthy as well as lesser wealth communities.
Because of the expense of LI real estate and rentals many younger people-namely 20 and thirtysomethings-are being priced out and the term used is "Brain Drain" because these people are basically the backbone of today's emerging Middle Class.

Property taxes are a tremendous burden on everyone who owns property here on LI-the NYS Senate has approved a tax cap recently. With school tax increases that are sometimes double digits yearly-far above the rate of inflation-something needed to be done. You can vote on school taxes here on LI-but the problem is low voter turnout and the idea that by voting down the school budget in your district you are only hurting school-age children-that is how some budgets get approved-even with large tax increases.

There is a program in NYS for those who are seniors and property owners of lower income called the STAR program-but it only does so much.

It seems that I remember that Toronto was a City with a high property tax burden and that homeowners there are suffering just like Long Islanders.

I hope to see a system that is fair and funds necessary services-a local income tax to replace the property tax has been proposed here on LI. I feel that it can work-property taxes in NYC's 5 boroughs are much lower then other NYC area counties-Westchester County(Just N of The Bronx)actually has the USA's highest per capita local tax burden.

Insight and information from Long Island Mike

 

[scarberiankhatru]

That's why I say tax me if I sell it, but otherwise leave my taxes at the level simply to cover the services I use.

Yeah, but how do you do that? You can fund some things through user fees...community centres, yes, but what about emergency shelters? Do you fund the fire department by only taxing people whose houses catch fire? If someone commits no crimes or doesn't have any committed against them or their property, will they not contribute to the police department? If someone is forced to walk through a park to access their local bus route, will they be charged for park use even as people who doesn't use the park but enjoy viewing it from their bedroom window aren't charged for "use"?

Old ladies and old Admiral Beezes can get reverse mortgages from Ditech.

 

[tempperm]

Under my system, each household would pay based on a set formula that was independent of property values.

I d also like to see a taxation based on a different formula - but what should that formula be? Perhaps a more granular formula based on utility usage perhaps? Is that even possible?

 

[Admiral Beez]

Yeah, but how do you do that? You can fund some things through user fees...community centres, yes, but what about emergency shelters? Do you fund the fire department by only taxing people whose houses catch fire?

I already covered this in the very first post above...

The city should be taxing us for the services we use, plus a percentage for general city-wide services.

Plus my very next post on this topic

Property taxes should be levied solely on the amount of municipal services used by that property, along with a percentage for general city upkeep of parks, police, sewers, etc.

Services deemed necessary by our elected municipal government, or forced upon it by the Province, such as emergency shelters, fire protection, police, community centres, sewers, roads and other infrastructure, public transit snow removal, etc, would all be covered by your property taxes (plus other fees, such as auto registration) under the general category. We simply take the total cost of these services, and divide it by the number of households and businesses, and apply that tax, with a formula or system for accounting for number of people in household. We all use a portion of city services, and thus while someone without a car may not want to pay for roads, someone with a car may not want to pay for public transit.

If you don't like my proposed system, and still don't like the current system of taxing seniors out of their homes, what do you suggest?

 

[scarberiankhatru]

It's not that I don't like your proposal, it's that it could be far less fair than the current system (and you proposed it because you don't think the current system is fair). I already suggested Grandma get a reverse mortgage from Ditech if she refuses to reap the rewards of selling her house. I'd rather tax Grandma out of her million dollar bungalow than tax a family of six right out of the city.

You're worried that seniors' taxes are not tied to the services they use or their ability to pay taxes; that this isn't fair. Well, even if seniors don't use more services, the cost of what they do use rises over time...they should not be exempt from such tax increases.

I'm not a fan of divorcing municipal taxes from a household's ability to pay them - which is exactly what you're suggesting. A head tax/user fee system severely penalizes poor and middle class families and is far less fair than Grandma getting a break because she refuses to tap into a million dollar asset. Tying taxes to property values is a decent way of tying them to one's ability to pay taxes.

How would libraries be funded in your plan...would a poor family of four in a $200,000 townhouse pay four times as much as one rich widow in the Bridle Path? What if the family doesn't use the library? Are you going to measure usage of services or just guess? Would you apply some kind of household size formula to something like snow removal, which is unaffected by household size?

 

[Admiral Beez]

I'm not a fan of divorcing municipal taxes from a household's ability to pay them - which is exactly what you're suggesting. A head tax/user fee system severely penalizes poor and middle class families and is far less fair than Grandma getting a break because she refuses to tap into a million dollar asset. Tying taxes to property values is a decent way of tying them to one's ability to pay taxes.?

So Grandma worked her whole life to pay off her house, and now that she's on a limited income, the only way she can keep her house is to sign it over to a bank again? Unless we demand that people essentially re-mortgage their houses, I see no way that an "ability to pay" formula can be reached.

Ability to pay should be based on income, not assets.

 

[scarberiankhatru]

Grandma worked her whole life and is now sitting on a million dollar asset...most of the families you'd rather place the tax burden on don't have this luxury.

 

[Admiral Beez]

Grandma worked her whole life and is now sitting on a million dollar asset...most of the families you'd rather place the tax burden on don't have this luxury.

If I own an vintage car that I bought 40 years ago for $2,000 and it's now worth a $80,000, I still pay the same road and license fees as someone with a crapped out $500 Honda. In both cases the fees we pay are based on the total use of the road by everyone, divided by the number of users. Why is property tax different?

I'm not saying Grandma's property growth in value should not be taxes more than someone living in a small house. When Grandma sells or dies, her million dollar asset will get taxed along the lines of capital gains taxes. The city will still get its share of the money.

 

[unimaginative2]

I'm a big fan of a system that taxes planning gain, as in the UK. When the municipality changes a policy or builds something that increases the value of your property, you pay tax on that increased value. That could be the construction of a subway station at your doorstep or, most importantly, zoning changes. That means that a developer who buys a few houses for a million dollars and then gets zoning approval for a massive condo building will have to pay a lot for the added value generated by the city changing the property's zoning to a much higher use. I think it's a very fair system, because a zoning change like that is a windfall for a developer who has done absolutely nothing to add value.