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I am all for Andy Cuomo running for New York Governor - hooray. Broadly speaking he has been a steadfast supporter of progressive ideas, he's not my dream candidate but he should be fine I guess. But during his announcement of his intention to run he spoke about the jewel in the crown of his economic plan:

From the Times Union:

“Cuomo knows that property taxes are going through the roof and that these tax increases are forcing people out of their homes and driving them out of the state,” Newsday quotes the Cuomo source as saying. ” Cuomo ’s property tax cap will be a central part of his economic plan because he knows we cannot get New York’s fiscal house in order without holding the line on the spending and tax hikes that squeeze New York families and stifle economic growth.”

this is ridiculous...lets talk a bit about this on the other side

This proposal shows no understanding of the property  tax at all.

This sort of capping is what has sent California into an economic tailspin. Economic rent flow that is not taxed is simply capitalized in the market price of the site...aka the rich get richer. The everyday Joe and Jane New Yorker whose property taxes are going up is doing so because the wealthiest landowners have such low carrying costs. So, capping the land component of the property tax -- which is really what appreciates, simply gives land owners a gift!  Capping simply is a gift to the wealthy land owners and speculators. The best solution is a tax on land values alone, slowly phased in while down taxing taxes on buildings/structures with a deferral of taxes (with interest) for those who are hard pressed until they cash out.

Originally posted to stillman on Mon May 24, 2010 at 10:37 AM PDT.

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Comment Preferences

    •  interesting and i agree (1+ / 0-)
      Recommended by:
      neroden

      but "behind a firewall" and no link ain't gonna cut it.

      Die with your boots on. Gonna try? Well stick around. Gonna cry? Just move along. The truth of all predictions is always in your hands. - Iron Maiden

      by Cedwyn on Mon May 24, 2010 at 10:40:33 AM PDT

      [ Parent ]

      •  fair enough (4+ / 0-)
        Recommended by:
        Cedwyn, HeyMikey, neroden, LI Mike

        just found another link! FIXED! thanks.

      •  From the horse's mouth (2+ / 0-)
        Recommended by:
        Cedwyn, neroden

        Cuomo's campaign site has a PDF including the property tax cap pledge. Still reading through it to try to find actual details, instead of pre-announcement leaks by anonymous aides.

        •  Found the details. (3+ / 0-)
          Recommended by:
          Cedwyn, neroden, BachFan

          It looks bad.

          Really, really bad.

          The cap is the lesser of inflation (presumably CPI) or 2%. So, if inflation runs at 3%, school budgets would be forced to shrink by 1% in real terms. Because, yes, the cap applies to school taxes. It applies to fire districts, too.

          Exceptions require approval of the relevant board plus a 60% popular vote.

          Terrible, horrible, no good, very bad idea.

          I mean, yes, NY property taxes are high. As Cuomo's PDF points out, as a proportion of property values, upstate NY taxes are the highest in the nation. But if you want to fix the problem, don't do so by unthinkingly copying the kind of policy that has turned California into an ungovernable state.

          Since when did low taxes become equated with fiscal responsibility? The opposite is true: fiscal responsibility is about making sure that you have enough tax revenue to cover your spending.

          •  OK, that's it, opposing Cuomo for now. (1+ / 0-)
            Recommended by:
            sullivanst

            This is a disastrously stupid proposal.  Let's publicize this and maybe Cuomo will change it.

            In my area, the board will approve the exceptions every time, and the 60% popular vote will be... achievable.  But the rest of the state will get hammered, and my area will become more and more unaffordable (but still attractive due to good schools, fire protection, etc.)

            -5.63, -8.10. Learn about Duverger's Law.

            by neroden on Mon May 24, 2010 at 01:04:12 PM PDT

            [ Parent ]

            •  Ironically it'll probably become more desirable (0+ / 0-)

              in contrast to the rest of the state.

              Having a functioning fire department is normally considered important. And I know my school district could stick a funding request for a moon shot in the budget and it'd pass comfortably: this part of Long Island appreciates the value of education.

              I was even disappointed when Nassau County decided to "Join Ed's Tax Revolt", despite kind of expecting that kind of BS from Republicans. From a Democrat, who's otherwise supposed to be a fairly decent Democrat? Most discouraging.

    •  Just take a look at the Indiana model... (5+ / 0-)
      Recommended by:
      Cedwyn, neroden, esquimaux, BachFan, pyegar

      You'll see precisely what property tax caps will get your state: increases in sales taxes, the cost of licenses and plates...the works. It leads to regressive tax policies across the board.

  •  Property Tax cap is what started SC's tailspin (3+ / 0-)
    Recommended by:
    Cedwyn, neroden, pyegar

    Interestingly, our budget shortfall the last three years has come to almost precisely the lost revenue from the cap.

    And all Republican candidates for Governor are running on the platform of cutting Corporate and Property taqxes - AGAIN!

    "If I can't dance, I don't want to be part of your revolution." - Emma Goldman

    by CamillesDad1 on Mon May 24, 2010 at 10:54:12 AM PDT

  •  It's not going to happen just because (1+ / 0-)
    Recommended by:
    Cedwyn

    he thinks it should.  That's campaign talk.  The legislature that he will be confronting is sick beyond repair and getting worse by the day.  He'll get nothing from them.


    The religious fanatics didn't buy the republican party because it was virtuous, they bought it because it was for sale

    by nupstateny on Mon May 24, 2010 at 11:06:54 AM PDT

  •  At least he is adressing property tax. I live (1+ / 0-)
    Recommended by:
    VClib

    on LI with a quarter acre piece of property and a 1200 sqft house and my taxes are almost 6K. I was taught to live within my means and so should the state. When I was layed off I cut way back on spending even if it hurt. The problem is no one wants to do the cuts as they look bad. The only one with a pair of balls was Patterson because he knew this was the end for him.

    If we all just stopped voting would they all just go away?

    by longislandny on Mon May 24, 2010 at 11:12:32 AM PDT

  •  Lets just tax the wealthly landowners. How (0+ / 0-)

    about cutting taxes and let people keep the money they earn?  I know it is a novel concept.

    •  i couldn't agree more (0+ / 0-)

      down tax taxes on productive work and uptax land values which no single person creates. It is insanity that if you spend your time and your dime to improve your home that your taxes go up yet the abandoned building or vacant lot sits idle with virtually no taxes on it.

      •  In the early 70's my parents bought a (1+ / 0-)
        Recommended by:
        VClib

        house on the water. Back then the taxes were an heard of $3000. They are now over 22K per year. Can someone tell me why. The school district closed schools so it can't be te school taxes. They get the same services as every one else. And btw they are not rich. The house had to be sold because when you are retired you can't pay 2K a month for taxes.

        If we all just stopped voting would they all just go away?

        by longislandny on Mon May 24, 2010 at 11:39:41 AM PDT

        [ Parent ]

        •  How can they afford that? How can they ever sell (0+ / 0-)

          the house with that much tax on it?

        •  you have hit the nail on the head (2+ / 0-)
          Recommended by:
          HeyMikey, neroden

          because others who find ways to skirt paying their fair share of taxes, regular people who don't have that access end up paying the bill.

          I don't know where in LI you are but I can tell you that when big box stores get put up they often get 25 year tax abatements. Your parents end up paying for things like that. When empty lot owners sit on properties and the like the local government seems to have little choice. But if they switched the property tax to the value of the land suddenly a whole lot more property would go into productive use. LI has definitely been poorly managed in this regard.

          •  Taxes on LI are very high and the (1+ / 0-)
            Recommended by:
            neroden

            North Shore because it is considered a good place to live is exorbident. They were one of the lower taxes in their neighborhood. Taxes on the Gold Coast house are more than the national average for salaries. Rents in the Hamptons go for 50K for 1 month, I wonder if the home owners claim all that rental income.

            If we all just stopped voting would they all just go away?

            by longislandny on Mon May 24, 2010 at 12:10:11 PM PDT

            [ Parent ]

        •  Actually, it is partly school taxes (0+ / 0-)

          The school districts have been losing state funding, so they've been raising property taxes to make up the difference.... they're also required to provide more and more services.  Unfunded.

          Similar problem: In NY the counties are required to pay for a large part of Medicaid, out of property tax.  In every other state, Medicaid comes out of the state budget.

          Of course the main reason, for your parents, is that houses on the water have vastly increased in value over time.

          -5.63, -8.10. Learn about Duverger's Law.

          by neroden on Mon May 24, 2010 at 01:00:40 PM PDT

          [ Parent ]

  •  Tax Caps=Whack (1+ / 0-)
    Recommended by:
    neroden

    While NY does needs a leader who can sort out the late Roman-Empire style government, a property tax cap always begs the question: what do we tax in its stead?

    Previous writers are all on the mark: California, Indiana, South Carolina, Florida  all force their local governments to spike or drop the property tax. The revenue has to come from somewhere. The "state?"

    Well, that's all of us. Sales taxes or other regressive taxes? They crater first in bad times, when poor people have an even harder time paying them.  Income taxes? sounds delightful, but tax receipts in Cali and New Jersey are disappearing at the top end of the scale.

    If we want government to really work, we need money. Property, especially landed property is a gift that keeps on giving.

    New York towns already have property tax classification and the STAR program, and it hasn't stopped the rot.  

    Reform what we have with a tax on community-created land value, rather than playing to the crowds or chasing away more jobs.

    Find the Power in the Land

    by Joshua911 on Mon May 24, 2010 at 12:59:13 PM PDT

  •  Dear Mr. Cuomo and NY Democrats, (2+ / 0-)
    Recommended by:
    HeyMikey, pyegar

    repeat after me:

    PROP-O-SITION THIR-TEEN.

    Is there anyone ANYONE, who will step up and have the GUTS, SPINE or BALLS to raise taxes on the rich??  Or was FDR the last socialist hero?

  •  As a Californian who opposed Prop 13 (1+ / 0-)
    Recommended by:
    ozajh

    I'm going to stand up and say it has had some beneficial effects.

    The problem with property taxes is that they have no relationship to someone's liquid income. And the problem in California is that ordinary people who bought houses that were well within their means were having property taxes skyrocket due to no action they were taking, and for that matter, due to no new benefit they were getting. The neighbor sold a house for an amazing profit - but the people who stayed behind got kicked in the teeth with higher assessments.

    When property values are doubling every 5 years, the effect on property taxes is as bad as health insurance.

    And imagine having your property tax bill go up by 10% when you've just lost your job.

    Advantages of prop 13 include more stable neighborhoods - it creates a disincentive to move, and people can stay in houses even as the neighborhood gentrifies. In California, where the most typical reason for sky high increases in property value is because of growth, where the city is marching into open space, this has been very helpful to many people.

    So let me suggest this:

    1. There's no reason schools, fire, etc need to be funded by property taxes.
    1. Income taxes have the amazing advantage of taxing income people actually receive (with rare exceptions).
    1. The problem with income tax and sales tax is that they're more volatile. And, it's challenging for a legislature to put extra money away in a rainy day fund, even though this is a much smarter and fairer way to collect tax.

    One disadvantage of Prop 13 is that people pay different rates on similar properties. On the other hand, everyone moves in knowing what their bill will be.

    The biggest disadvantage has been that commercial property is highly undervalued, and since Prop 13 only reassesses on sale, it's easy for commercial properties to be wholly owned by corporations, who can sell themselves over so slowly as to pretend the property has never been sold. The net effect has been to lessen the burden on commercial property at the expense of residential property and on ordinary taxpayers. If instead one were to assume that corporate-owned properties were constantly sold, it would lead to a better overall result.

    Fry, don't be a hero! It's not covered by our health plan!

    by elfling on Mon May 24, 2010 at 02:46:12 PM PDT

    •  Your argument is valid (1+ / 0-)
      Recommended by:
      elfling

      for natural persons (and I will go so far as to agree with one transfer-to-partner, but no more).

      The biggest problem with Proposition 13 in California doesn't lie there.  It lies in commercial property, where special corporate entities have been set up solely to own specific proprties.  Transfers of ownership then take place at the business level rather than the property level, so the tax level never resets.

      This is going to be the gift that keeps on giving for the wealthy plus the immortal (think corporations).

      •  I agree (0+ / 0-)

        That's why I suggested that we just assume that any corporate-owned property is sold every year or every few years.

        If you wanted, you could leave a loophole that individually owned commercial properties were not reassessed. This could protect mom-and-pop owned restaurants and stores, for example.

        Fry, don't be a hero! It's not covered by our health plan!

        by elfling on Mon May 24, 2010 at 08:54:26 PM PDT

        [ Parent ]

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