David Custis Kimball - blog

Economics, History, Human Affairs, Real Estate

The real problem with repealing the tax benefits of Prop 13 is that since 1978, the value of CA’s real estate has increased due to this law and the incentive to own property.  It would seem not a stretch that you don’t own any property.. so you just want to benefit from another’s misfortune of your own making … a win -lose proposition.  This would not help the economy of CA.

Here in FL we have a 3 percent cap on our home taxes, but that doesn’t prevent them from raising the rate.  If you own another building, the tax is evaluated every year for the market value of the building.  I owned a rental property  where the tax base of 2.5 percent was being raised about $40k per year, until the crash … and now they raise the rate… so the taxes stay high.  But this has kept the value of homes lower.  For example, a corner house in the same neighborhood, same size lot, same age is going for about 200 percent less that it sold for in 2005.  A $700k single family house, 1600 sf is going for $200k today … from a bank ‘short sale’ because the property is being taxed and insuranced out of all proportion.  Home insurance can be $5000 per year and manditory if you have a mortgage.  Taxes accelerated to about $8000 to $10,000 per year when the house sold for the $700k.   The only good news is that FL has NO income tax.

Years ago, in 1978 I was looking for a home near Cambridge, MA.  Basically, I could find building for about $30,000.  Wow, that’s cheap I thought; then I realized that property taxes in ‘Taxachusetts’ were 10 percent of the market value … wow that’s $3k … so I kept renting at $247 a month in a rent controlled flat in Cambridge, Sousa Sq., Now, in 2007, I return with my daughter to college and my dog to the park.  Where I see and talk to former workers at my dear old company … who sold out of Cambridge and moved to Billerica, AS&E.  I heard and confirmed that properties now were $500k to $700k for an old place in Cambridge, but the property taxes were $1,500 per year … wow … if I had only bought at $30k and survived to see the lowering of the taxes…. see -saw .  Value and taxes …. if you raise them, people will flee, if you lower them property values will soar … and will attract those who can land a good job, etc.  But who wants to fix up anything if the tax rate is 10 percent, 5 percent, or anything over 3 percent.

So CA has had a downturn, but not a catastophe as is caused by FL’s ONLY home taxes capped at 3 percent.  And everything else, sky’s the limit.  But no INCOME tax.  Or is your group going to be marching here next… another crisis, another economy to rape.

You might want to be reasonable and try a 2 percent tax on all property per year … for the next 5 years and then it would go back to status quo.  Thereby current owners wouldn’t panic and feel they have to sell.  Of course if you have George Soros or another gangsta who wants to buy it up, and you can hope to minipulate it down once you own the place, then good luck, as your Obama’s Rahm stated ‘Don’t let a crisis go to waste”, adding that that’s especially important for the ones that you create.

So if you’re not part of the gang that has the billions to buy up the property and you’re not going to make a few million$ yourself, I would recommend being a ‘stooge’, ‘ignorant facilitator’ , or ‘obliging idiot’, as where your economic policy would seem to be taking you.

Why Californians Are Marching on Sacramento on March 4th, 2010Share Today at 7:49amOn March 4th, 2010, Californians are marching on the state capitol, Sacramento, to tell politicians we are sick and tired of dysfunctional state government that can’t balance its budgets and cuts huge economic…