When my wife and I were buying a house, we were thinking that one benefit of owning is that our monthly payments would be fixed, even in an inflationary environment. What we missed is that as inflation ran up the nominal value of our home, that would run up our insurance and property tax payments.
The Evil of the Residential Property Tax By Ryan McMaken "Residential property taxes attack one of the most fundamental needs and assets in a person's life—i.e., housing—in a way the income tax does not. As the central bank's monetary inflation drives up home prices, property tax burdens increase as well."
this territory is moderated
We all gotta live somewhere, right? Renting isn't ideal for everyone, some prefer to be renters to the bank for the long term and I get it, I was sold on property for many years and wasted so much time looking for opportunities, saving up cash and luckily I discovered Bitcoin and didn't blow my wad on some shithole fixer-upper just to "get my foot on the property ladder"
Property is such a massive opportunity cost though yet people don't realise it, I speak to my friends and family and they are all still of the frame of mind that they own it, that it always goes up and its the best investment you can make, and most of them if not all are pretty shit at math, so trying to show them the calcs is even a waste of time
I don't own property, I am reluctant to do so in my country, I wouldn't want to tie myself to the direction its going and people who are immoveable, tied to places by the property are easily influenced, easily taxed, and easily made to tow the line
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I was so shocked when a friend repeated the old "housing always goes up" line. This was someone who lived through the Great Recession.
I share your view that real estate is not a great investment (although it has accidentally worked out well for my family so far). We think about it in the same rental terms that you used: How do we get the best living situation for our family within our monthly budget?
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I expect governments in search of revenue will continue to try to extort property owners. Especially as property values continue to rise while fiat collapses.
We have definitely seen it in Canada. Vacant property taxes, foreign buyer taxes, additional taxes on newly built homes, land transfer taxes, and now in Toronto they have luxury home tax on properties sold over $3M. Of course that will get expanded to homes over 2.5M and then 2M all while housing prices are increasing and eventually the government will consider your 850ftsq shoebox townhome stacked on top of someone else's shoebox as a luxury property.
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Canada's got to pay for its new UBI somehow. You can't just medically assist everyone to death.
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how do we get out of this mess?
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Refugee to El Salvador
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Great take and I share the same view
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Similar dynamic with income taxes too. No need to necessarily increase the rates, just move people up the ladder so they fall into a higher bracket.
In a backwards sort of way, maybe this is what is meant when saying “you will own nothing and be happy”. (Since paying fewer taxes)
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I knew about "bracket creep" (great term), because Rothbard called Reagan out for it. If I had thought about it, I would have realized that monthly house payments aren't immune from inflation. There are just too many ways that inflation screws us to keep them all in mind.
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I think the brackets should be reversed the more your produce the less you pay the more you rent seek the more you should pay. Doctors shouldn’t be taxed at 50% for being productive and saving the lives of people while money managers work the system and only pay 15% for just allocating other peoples’ money.
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What if, and hear me out here, we just lowered them all to 15%?
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Close the loopholes a 15% flat tax makes sense.
But I think the tax should be a consumption tax on goods and services. Yeah it will suck for producers and consumers but if you grow your own food and make your own products then you would never pay tax. But getting rid of income tax all together will instantly boost productivity and not punish high earners for producing.
People living in western nations if you don’t want to pay taxes you can leave. Denounce your citizenship leave the country set up shop somewhere and make it happen. You have the option to leave and be a free human on this planet but most would die in a week without modern amenities. Even those Alaskan bush people go to town to get goods services and Mates so they can breed.
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Fyi, those "Alaskan bush people" are fake and many Alaskans pay no taxes without going to such lengths.
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Remember that pre-1900 rates of 2 - 4% were common. In WW2 in 1944, the top bracket was 94%. War is ridonculously expensive. Many caveats, but if 0% is not an option we should all want to see 1.5% rather than 15%.
15% still incentivises the use of accountants, inefficient reporting & corporate structures to shield themselves from paying. Sounds utopian, but the world would likely be a lot more peaceful and productive if it were single or decimal digits. People & companies would just pay and get on with building cool stuff.
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My preferred number is 0. I was trying to point out that we don't have to bicker over who should pay more. We could unite under everyone paying less.
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Have you heard Scott Horton's thought experiment about how we would react if the USSR had implemented this exact tax system?
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I couldn't find where I had heard it.
Basically, imagine a world where the United States had been conquered by the Soviet Union and there had never been a US income tax. The conquering Soviets wanted to punish the capitalist Americans so they implemented a series of fines for people who made profits. Naturally, they would fine greater earnings more than lesser and they'd punish speculation especially hard.
I forget all the details, but the point was that the current tax system is consistent with a complex communist punishment.
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Residential property taxes attack one of the most fundamental needs and assets in a person's life—i.e., housing—in a way the income tax does not.
With the same success I could say that the income tax attacks food in a way that the property tax does not.
More importantly, income tax attacks your ownership of the fruits of your own labor, and therefore your self-ownership. Unacceptable! See "Income tax: the root of all evil" by Chodorov.
Now land is different. No human has created the land itself, so the land tax is much more compatible with libertarianism. See Geolibertarianism for example; a movement that wants the land tax to be the only tax.
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If you produced food, clothing, shelter, etc for yourself, instead of earning wages and buying it, then the income tax wouldn't play any role. However, property taxes would essentially force you to get a wage paying job in order to not have the house you built for yourself taken away by the state.
My Christmas wish is that you lot could just take the extra step and realize that all taxes are unjust and unnecessary, rather than devoting so much energy to arguing about what the right kind of taxes are.
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But that scenario is grotesquely unrealistic. You're writing on SN, so you have at least bought either a computer or a phone (somehow I don't believe you've produced it in your backyard). You're obviously paying for Internet access as well. Even if you produce all the energy on site from solar panels, I strongly doubt that you've produced the panels themselves, and so on. So yes, you have to get a wage paying job (the horror, the horror!).
And my Christmas wish is that you lot could realize that whatever defense arrangement will replace the government isn't going to be free and probably will require annual subscription just the same. Case in point: the biggest private domain name service, the Ethereum Name Service, wants annual payments, which are essentially property taxes. Yes, there are name services that don't do that, such as Unstoppable Domains, but also there are countries without property taxes.
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We do realize that private defense costs money. In fact that's exactly the alternative we advocate for.
Our objection isn't to paying for stuff. Our objection is to theft. It's a pretty straightforward distinction.
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Is it though?
You've bought the house, meaning that you went to a criminal gang ("government") and explicitly asked them to list yourself in their ledger. You knew full well that "owning" the house specifically means being listed in that criminal gang's registry. You were well aware that the rules of that criminal gang involve you regularly paying them a fee. You knew the whole deal pretty well, except for the part where the fee scales with inflation. But the criminals weren't even trying to hide that condition from you, you simply missed it on your own. And now as the criminals come to collect their fee you claim that you're a victim of theft. But in this case I don't think you are.
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I do like "coming to the nuisance" type arguments, generally. In the case of governments, I'm not very persuaded by them though. I don't think there's an obligation to honor agreements with organizations that regularly engage in non-voluntary interactions (see estoppel).
I would say that at some point they began extorting the owner of that property in a clearly non-consensual manner, but the owner never lost the right to transfer ownership of the property sans a government claim on it. So, there never was any right to tax the property which renders current taxes illegitimate.
Your line of thinking is why I don't get super worked up about existing taxes though. I chose to live where I live, partly because of its lower tax incidence. That doesn't change my view that an ideal system wouldn't condone coercive relationships.
This does touch on something I've often wondered about. If a seller voluntarily requires that I pay my property taxes as a condition of the sale, and that I must require the same of anyone I sell to, is there a libertarian way out of that agreement or is that property forever subject to property taxes?
Feel free to disregard that last part, if it doesn't interest you.
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I don't think there's an obligation to honor agreements with organizations that regularly engage in non-voluntary interactions (see estoppel).
OK, but when mafia comes to collect a fee that you've agreed to that act itself isn't theft, although mafia may be involved with some other thefts.
I would say that at some point they began extorting the owner of that property in a clearly non-consensual manner, but the owner never lost the right to transfer ownership of the property sans a government claim on it.
Here's a European perspective (US is a whole different can of worms): that's not at all how things developed. Originally when a bandit conquers a territory, he exercises sovereignty over it, meaning that he's now the king and owns all the land. But he can't manage the whole country all by himself so he enfeoffs most of his lands to his homies (earls, dukes, beys, whatever). These lands are now called fiefs and his homies are called his vassals. Fiefs are kinda unlimited term rental properties; the rent is paid with horsemen ready for combat at the king's call.
Now the earls/dukes/etc can't manage their fief all by themselves either so they sublet it to the next level (thanes/counts/whatever). In the end there is a complicated multi-level tree of vassal-liege relationships. The ultimate owner ("lord paramount") is usually the king, but sometimes the Pope (mostly symbolically). There were all sorts of weird cases: The Duke of Cornwall is still somehow the lord paramount of his duchy instead of the British king but whatever. There were also allodial lands which seem to be the closest to your notion of land ownership but today they don't exist anymore.
Contrary to what you've said, originally the vassal-liege relationship was a personal bond. Your renters were literally going to protect your back on the battlefield! The idea that fiefs could be bought and sold came later, and was offensive to the old chivalric mindset. The Crown did not insert taxation into a pre-existing fief market.
So, there never was any right to tax the property which renders current taxes illegitimate.
The modern term "property" applied to real estate describes a fief with the State being the liege. And that isn't exactly a secret. The original military meaning of the vassal-liege relationship is lost not because the government is now meek and doesn't lord it over people, but on the contrary, because the modern government asserts its right to conscript everybody regardless of whether they have fiefs or not.
is there a libertarian way out of that agreement or is that property forever subject to property taxes?
The key question is who enforces the agreement. If it's the government, then it will require the taxes anyway. If it's a blockchain, then yes, forever: just like Opensea's NFTs are forever encumbered with royalty payments to the artist upon every trade.
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when mafia comes to collect a fee that you've agreed to that act itself isn't theft
If you only agree because of a threat of violence, then it is still theft.
There's way too much to get into with all of the historical stuff and I freely grant that these things get complicated if you trace them sufficiently far back. To me, the relevant question is whether the agreement is based on a threat of violence or not. Your historical exposition is full of violence and threats of violence, which carries little weight with me as a basis for thinking about ownership rights.
I think if we continued this conversation long enough, we'd discover the heart of our disagreement is over what rights are and what they're for. I favor the system of property rights that I do because I believe it is sufficient to resolve conflicts over scarce resources without resorting to violence. We may simply have different preferences on this point.
Most taxes are morally wrong and paying a fee to live in ones own house (i.e., property tax) is one of them. Real estate as investment doesn't make sense since it should be a depreciating asset like a car but it has worked so well for so long that it will take time to be replaced by better forms of store of value (e.g., bitcoin) Progressive income tax is also evil, punishing people when they produce more create wrong incentives, it would be more fair to agree on a 5-10% tax that everybody pays and that's it, much simpler and favoring productive work Tobacco, gambling and alcohol taxes make more sense if the rational is to limit harmful behaviors but how to justify death tax (i.e., inheritance tax)? Adding them all up in some countries people pay about 80-90% of their yearly income in taxes, let's think about that for a while...
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The beautiful part is that government evil no longer applies to Bitcoiners.
Everything is constantly getting cheaper over time. Housing, food, transportation. It's a beautiful thing to watch.
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government evil no longer applies to Bitcoiners
In some respects this is true, but it's a long battle to escape all of it.
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All taxes are evil but the most evil is probably the inheritance tax.
The most just tax is probably the property tax. It is the governments territory after all and you are renting a portion of it:)
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I would say that the least evil (different from least unjust) taxes are those that are most easily avoided. Property taxes are almost completely unavoidable.
The least unjust taxes, I would say, are those levied against anti-social behaviors.
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I think if a tax is easily avoided it becomes unjust, or unequal. The property tax is probably the simplest of all and thus just if a tax can be just.
The problem i found with taxing "anti social behavior" is who gets define what that is. Some people want to be left alone. Im sure the greatest people in history who achived great things would be considered anti-social by their peers but that's a different discussion. I mean Satoshi Nakamoto can be considered anti social? Something to think about maybe.
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There is no just theft. All taxes are theft. There should be a subscription we can pay for government services. No more enslavement
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if a tax is easily avoided it becomes unjust, or unequal
Unequal, yes, but so what? Consider something like an alcohol or cigarette tax. No one needs to consume these products. In fact, people are better off (imo) if they don't consume them. How does their avoidability make it more unjust to tax them?
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Might oughta start reading your state and federal constitutions and your states property tax code so you can start filing suits like many are doing now. Slowly working on mine in between other obligations
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Is this a formal movement? What are the specific grounds people are resting their suits on?
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It's not a formal movement. It's just a large number of people who have figured out, either by "waking up" and/or general concern about the state of our country, that there is more that can be done than those people previously realized (like me) and they have decided to learn court process and start taking matters into their own hands because 99% of lawyers will not be able to really help you. One of the reasons prohibition ended was because of the backlogs of lawsuits filed by citizens, they realized they had to give up. This is what we all need to be doing.
There are many grounds for the suits: state/federal constitutions, statutory laws, and case law. It does require a lot of reading and there is semantic deceit you must learn to read through, but it's there. A well-known case in some of these groups is that of Steve Emerson out of Florida who sued for property taxes, won ~$38 million and (I think) free utilities for life. His case was sealed, but he has been spreading the word for years about the laws and much of his free information has made its rounds.
Learning this stuff gives you the tools to combat much more than that. It's pretty eye-opening. If you're interested, look up the "Alphonse Faggiolo" Telegram group, but there are also other law groups that branch off from there teaching much of the same stuff. Alphonse is very good at this stuff and I bet he will likely win his case, but he's not the only one.
And none of this is sovereign citizen garbage. This is real law.
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That's very interesting. I'm always surprised when I find out about these kinds of things, because I generally feel like I've got a good handle on what the "liberty movement" is up to.
Can you post any of the information you've come up with in ~libertarian? I bet people would be pretty interested.
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There have been many times I've tried to convince people to start learning stuff and take matters into their own hands, but I am met with apathy. Unfortunately also from some of the biggest believers in liberty: bitcoiners.
Regardless, if I get some time today, I'll make a post about it.
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Please do.
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Are you saying you agree with California's Prop 13, which fixes property taxes to the value of the last transfer plus a 2% per year increase regardless of the actual increase in property value?
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No, I think property taxes should be abolished.
However, if the state is going to appraise my property and tax me on that assessment, then I should be able to sell my property to them at that price.
In one of Heinlein's books, he describes a society where each person gets to list the value of their property. That's the value that gets taxed on, but they also have to sell if anyone offers them more than that.
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Hmm, how would you respond to the rather traditional view that property taxes are less distortionary than income and sales taxes because real estate is less elastic? e.g. People, jobs, and sales can move, but the land can't. If we accept that taxation is a reality to contend with (death & taxes and all that), shouldn't we use the least distortionary tax possible? Texas, for example, favors property taxes over personal income taxes, and I think it's good policy.
Not trying to be contrary or anything, just genuinely curious how you'd respond to this commonly held view
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Knee-jerk answer: Could be. Don't give a shit.
More reasonable answer: According to mainstream macroeconomic theory, the only non-distortionary tax is actually a uniform head tax. So, if that's what you really care about, replace all taxes with a fixed lump-sum tax that everyone pays.
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Its more of a thorny problem to solve then it first appears.
Imagine you live in a hypothetical town that had no property taxes, and instead simply divided the annual budget equally among citizens. So a $50M budget and 5000 citizens results in a $10K yearly tax per person.
However this opens up more questions then it solves....if you own .15 acres of land and I own 100,000 acres of land are we equally using the same ratio of town services?
Perhaps the "right answer" would be to have a much more narrow definition of "town services" and have everything else pay-per-use (ie. pay for police protection, pay for fire protection, etc)
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My point isn't that a head tax is the "right" form of taxation. It's that it is considered the least distortionary.
I think it's clear that it's a particularly bad form of taxation, actually, and it should make the other person acknowledge that distortion isn't really what they care most about.
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Property prices rise, fiat collapses. Taxes go up.
Putting American's on the hampster wheel. They are brilliant.
Lever up puppet!
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Yep, it's probably not called "bracket creep" with property taxes, but it's the same phenomenon.
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It's really frustrating when a article doesn't present a solution or call to action. Just more doom shit I already know.
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The implied solution to bad policies is to repeal them.
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Repealing a fundamental tax to a community without a replacement has never worked and will never work.
This is why Libertarians lose. They just want to repeal but not replace. It always needs to be 100% pure. Instead of a incremental improvement we get nothing. Just more crying and complaining.
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Not liking our solutions is different than us not having any. There are places that don't have property taxes, btw, so it's not metaphysically impossible to get by without them.
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You think you really own property? What happpens when you stop paying the rent they call taxes?
Trust me. I get it.
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