February 21, 2010

Solution to California’s Budget Woes: Tax Renters

Let’s face it, California’s budget is a mess.

It’s revenues are mostly from income, which means that in bad times a vicious cycle develops (layoffs->lower tax revenue->government layoffs->reduced consumption->layoffs->etc).

It’s expenses are locked in by voter initiatives. Now, as we know, California has the smartest people in the world – and that’s why voters pass propositions that result in situations where schools are required to have after school programs like teaching juggling and sushi rolling, while cutting teachers for basic programs. Innovative!

But there’s hope. Because California, especially the Bay Area, has the smartest people in the world, there’s a lot of innovation. Like the highly innovative Prop 13 – which enables companies to pay less property taxes than some homeowners, and enables some homeowners to pay 1/10 the property taxes than their neighbors. Coming up with a tax scheme that only impacts families in the future and immigrants to the state, while creating a landed-class, is definitely the kind of out of the box thinking that the state is famous for.

So now, let me share with you this fantastic proposed solution to California’s budget woes from the Mercury News’ message forums:

Tuesday, 2/02/2010 – 9:32 a.m. PST — Why don’t they just start taxing renters?
dlawrence

Renters are using the same services as homeowners, so why don’t they just pass a renter’s tax?  Maybe that would get a lot of the lazy people off their butts and get them to buy a house and really be a part of their community – rather than just a transient drain on their neighborhood until they move on to some other short-term situation.  There are so many renters out there that there must be a way to monetize them.  Maybe pass a residency tax that affects everyone, but if you’re already paying property tax, you get exempted from the new residency tax.  Then, force landlords to get a SSN from all renters and make sure the IRS has their address – just to make sure that the illegals don’t get away without contributing to their society the way homeowners have been doing for years.

Oh my god! This is an even better idea than the tuition tax, and other taxes on children, floated on this site earlier! Why aren’t we taxing lazy renters?

But wait, there’s more!

Tuesday, 2/02/2010 – 6:55 p.m. PST — Stay in school, then
dlawrence

Take a walk through most communities that are rental-majorities.  Sure the majority of renters would love to participate in ownership but *news flash* they’re uneducated or undereducated for this region.  Maybe if they started applying themselves and showing some initiative, then they’d start making the kind of money it takes to own something.  Also, *news flash* if you can’t afford a house in this market and you want one, you’re definitely in the wrong place.  Move to the hills of Tennessee or something.  Houses here are afforable now, and available to anyone who has a good education and is willing to invest in a long-term future and not live month-to-month.

Is it really a privilege to own property? Didn’t the homeowners pay taxes on the money that they earned to buy that property (think double-taxation)?  Aren’t most of them under water on their mortgages (you don’t need to think about that one)?  Doesn’t it take money to maintain that property to what the community and renters deem appropriate levels (think code enforcement)?  Don’t homeowners need to maintain insurance in case some dumb_ss falls on their doorstep (think lawyers)?  Maybe with your logic, there should be a tax placed on getting sick – because that’s about as much of a privilege as what you’re alluding to.  No, ownership is a right if you have the initiative and guts to do it – and nobody should tax a right.

Renting is a privilege more than ownership. Renters use up a huge chunk of community services and they don’t pay squat for it – and then they get to deduct a portion of their taxes because the landlord already paid property taxes that they’re benefitting from.  That’s just stupid.

Seriously. Mountain View’s a great example – it’s very affordable now, yet 50%+ plus of the population still rents. Those people should be deported!

But wait, there’s more!

Tuesday, 2/02/2010 – 6:40 p.m. PST — HomeyDogg doesn’t even know what clue means
dlawrence

First of all, I’m not a ‘sir’, but I suppose a predjudiced person such as yourself might assume I’m a ‘sir’ because I made what you feel are good arguments.  I shudder to think what you would have called me if I had made no sense.

Just because you are a renter, and probably paying less in rent than the property owner is paying in property taxes for your little unit, doesn’t mean it’s right or fair.  Watch the news – most property owners are completely screwed in this economy and the renters are reaping all the rewards of their hard-earned investment.  The property owner is just trying to make ends meet and usually being taken advantage of by the deadbeat renters out there who could care less what happens to their community because they’ll just be moving out once they miss enough rent payments, do enough damage to burn through their security deposit, or have too many bill collectors or bounty hunters stalking them at their residence.  Grow up.

Indeed. Did you know that in the California Constitution it guarantees that landlords will have profits? Oh wait… it doesn’t? WE NEED A PROPOSITION FOR THAT, STAT!

(BTW, most major landlords have their tax rates set in 1978… so… uh…)

But wait, there’s more!

Tuesday, 2/02/2010 – 10:12 a.m. PST — I don’t think that’s
dlawrence

I don’t think that’s completely true – I know of a lot of landlords that had their property taxes go up year-over-year yet they had to reduce rents because of the poor economy.  If their taxes went up, yet the renters are paying less, then something that was ‘factored in’ all of a sudden got ‘factored out’.  Since most rental real estate is a money losing proposition, and rents are still a heck of a lot lower than the relative cost of ownership, renters are getting a great deal.  They should be taxed to help ‘spread the wealth’ and pay their fair share of the services they’re using.  Everyone knows that renters have more police calls per capita than homeowners, and crime rat
es are higher in predominantly renter-heavy neighborhoods than owner-occupied neighborhoods, so why not tax them to pay for the services they’re using?  Homeowners have been paying huge amount of tax and carrying the burden of public services forever – yet many of those services go to people who don’t own a home and pay property taxes.  Why is that fair?  I say tax them and the problem will be solved.

Also, if they’re getting a ‘renter’s credit’ then how is that fair?  Get rid of the renter’s credit and make them pay their fair share.

Finally – this gets to the heart of how we can solve California’s budget woes: tax the poor.

If we tax the rich, they’ll leave! Local stores like French Laundry will layoff thousands. But if we tax the poor, they’ll leave! And then we won’t have poor people to support, or to look at!

Win-win!

Uh oh… there’s a dissenting view on the site:

Tuesday, 2/02/2010 – 10:25 a.m. PST — Sick of Prop 13!
JBeez

My neighbors bought their house 30 years ago during a time when home values were more in line with salaries. Now, they are only paying $1700 a year in taxes receiving a pention and sucking from Social Security that I may never see! How are they contributing to our schools and other programs? I pay close to $20,000 a year in my property tax and I live right next door with a similar house. How is that fair? They are taking from our community and giving nothing back! When are we going to change Prop 13 so we can STOP taking from our children? What is wrong with CA? STOP prop 13!!! Even if we only increased their taxes by 3% this state would be in a better situation!

Three words: Socialism Loving Nazi.

It gets worse…

Tuesday, 2/02/2010 – 3:17 p.m. PST — And another thing on Prop 13
JBeez

Thank you “your daddy” and shame on you Fat Granny for making such an uneducated comment about “rich yuppies” paying too much for homes!  That is the most rediculous thing I have heard!  We are living here because we are entrepreneuers and if it weren’t for us, you wouldn’t have some of the programs that we do!  Also, as “your daddy” stated, why can’t I live in the area I grew up?  I want my kids to grow up in a nice area so I had to pay this price!  Do you realize Fat Granny and all you other people who are for prop 13 that in 1978, before prop 13 we had a surplus!  Since then, we have had to cut public services, raise other taxes (CA sales tax is amoungst the highest in the nation!), drop school funding (we went from #5 in the nation to #40 in 1985 and is still dropping), road maintenance is down and because you empty nesters wont move we now have ugly tract homes covering our east foothills to make room for new homebuyers!  You see… property taxes are how we pay for things where we live.  Because of Prop 13 limited the sales tax to 1% of the assessed value of each property; and  limited annual increases in assessed values to the lesser of 2% or the increase in the cost of living for the year, with the exception that upon the sale of a property, the assessment would be updated to the transaction price. The effects of this have been a huge impact on the well-being of Californians.  If you can’t understand what I am saying, let me explain… THAT CAUSED HOUSE PRICES TO SOAR! Not rich yuppies paying too much for homes.

Even Warren Buffett commented on the iniquities and inequities of this system and pointed out how he bought a home in CA in the early 70’s with a current market value of $4M and was only paying $2,200 a year in taxes but bought another home in that same neighborhood for half the value in the mid 90’s and was paying $14,000 a year.  His point you ask?  The tax rate on the second house — same neighborhood, same owner, same ability to pay — is roughly 10 times the rate on the first house.  The emphasis is on “the same ability to pay”!!

This might be too hard for you to understand Fat Granny so maybe you should just go eat a dougnut!

This Socialism Loving Nazi is using facts as if they’re the truth. And he has typos.

Everyone knows that facts come from the gut. And only arguments with typos are valid.

Let’s call him on it:

Tuesday, 2/02/2010 – 7:32 p.m. PST — Are you really an entrepreneuer?
dlawrence

“Entrepreneuers” like you should be ashamed of yourself – and I hope your endeavors don’t include anything related to proper spelling, or we’ll all be in a “rediculous” situation, at least those “amoungst” us who have anything to do with what your endeavors produce.  Maybe you own a “dougnut” shop and it just doesn’t matter…

Maybe you are a rich yuppie like you portend in your writing – and studies have clearly shown that most rich yuppies are stupid, so your spelling might therefore be part of your genetic disability.  In that case I’m sorry for pointing it out.  Or, maybe you just got outgrown by this area and you’re so mad that you can’t keep up with it that your brain has stopped working.

BOOYAH. You got owned! Studies show that young people are stupid.

It’s clear what the next steps are:

1. California needs to pass a proposition to tax renters and to guarantee that landlords will have increasing profits every year.

2. California needs to pass a proposition to tax poor people. Let’s drive’em out of the state for good.

3. California needs to pass a proposition to limit voting to people who own houses and are 55 years old+,

Are you with this plan? Or are you with the terrorists?

Comments (241) -- Posted by: burbed @ 5:35 am

241 Responses to “Solution to California’s Budget Woes: Tax Renters”

  1. Lionel Says:

    Wow. The posts are so intriguingly idiotic, I assumed that RE was using a pseudonym. Then the writer claims to be female, which I’m guessing RE would not do. Which got me thinking — this must be RE’s wife!!! Who else could propose something so entirely imbecilic?

    Mrs. RE, let me explain something to you that really, really simple. As renters, we pay taxes via our rent. When my landlord gets money from me, he can actually use that to pay his property taxes. Or maintenance. Or just put it in his bank account if these other issues are taken care of. Further, the idea that renters are subsidized right now is excruciatingly mindless. The US Treasury and Fed has flooded our economy with all of tax dollars specifically to prop up home prices.

  2. Tyrone Says:

    There is no such thing as a home “owner”. If you do not have allodial title, you are nothing more than a glorified renter. Freedom was lost a long time ago.

  3. Herve Estater Says:

    > most major landlords have their tax rates set in 1978

    (bob, the following post contains many numbers, please refrain from commenting)

    That would be 1975 actually. Prop 13 was passed in 1978 but the original base value is the 1975-76 market value.

    I recommend 2009-2010 Annual Report from the Office of the County Assessor. See pages 16 and 17 for Proposition 13 information.

    The previous report showed 73,663 parcels with a 1975 base year. The latest report shows 71,929 such parcels, a 1,734 decrease. These 71,929 parcels represent 15.5% of all parcels but only 5.4% of the total assessed value.

    Now, nomadic will grace us with his comments about old people

  4. Real Estater Says:

    >>As renters, we pay taxes via our rent.

    That’s balony, for many obvious reasons. If you truly believe in that, then let the government assess a separate tax on renters, just like when you stay at a hotel, tax is separate line item. It’s the same concept. A hotel stay is essentially a short rental.

  5. rickcookie Says:

    While unfairly benefiting from other working people by paying less property tax via proposition 13 and charge rent based on property’s market value, a property owner is already receiving pork from the government as tax-free for the mortgage interest. A renter got nothing tax free from the rent, has no interest in the potential property appreciation ( and blow up, sometimes ).

    As a property owner who used to be a renter, the proposition of renter tax is ridiculous. The correct way to address the property market distortion is to abandon proposition 13.

  6. R Says:

    “As renters, we pay taxes via our rent.

    That’s balony, for many obvious reasons. If you truly believe in that, then let the government assess a separate tax on renters, just like when you stay at a hotel, tax is separate line item. It’s the same concept. A hotel stay is essentially a short rental.”
    ———
    Huh?

  7. Lionel Says:

    RE, it’s not complicated. The house I live in generates the same amount of taxes as my next door neighbor’s house, which is identical to mine, despite the fact that I rent and my neighbor bought his house. He and I simply made different choices.

  8. Herve Estater Says:

    > The correct way to address the property market distortion is to abandon proposition 13.

    If proposition 13 is repelled, I believe it should be replaced with something else that still respect the original intent (older people should not be priced out of their house).

    That being said, I would want to see the following in the new proposition 13:
    – market value assessment for as long as the owner is working
    – once owner is retired, rate of increase based on inflation (instead of the current 2%)
    – AMT on property tax: if you’re old and rich, you can afford a market price assessment
    – only on residential real estate
    – only on primary residence
    – transfer to children implies new assessment

  9. Real Estater Says:

    Lionel,

    You’re right. It’s not complicated, and yet you don’t understand it.

    We need additional tax revenue for California. Status quo does not work. If you rent a hotel for a week, you pay taxes. If you rent an apartment or a house, you should be made to pay your fair share too. We can set up a system where renters pay a lower rate, but that rate should not be zero.

  10. CB Says:

    Why should the state collect revenue twice on a single property? The solution is not finding more people to tax, it is finding revenue streams that are reliable and equitable.

    Regardless, anyone who would advocate taxing renters is a complete dolt, so shine on, RE.

  11. CB Says:

    I’d imagine it playing out like this: As a landlord you’re collecting $2500/mo for rent. But, now the renter is taxed 5%. Following a fundamental of economics, that money doesn’t grow on trees, the market value for that rental is now $2375. Guess who ends up paying the tax?

  12. Real Estater Says:

    CB,

    Taxing renters is exactly that reliable and equitable solution. It’s reliable because there will always be renters; it’s equitable because renters use the same services as home owners.

    It’s ludicrous to assume taxes are already built into the rent. Any tax system has to be transparent and accountable. If landlords are collecting taxes on behalf of the government, there needs to be a separate line item for taxes, paid directly to the IRS.

  13. anon Says:

    Two words: Bitter homeowners.

    What was once viewed as a privilege has now become a burden and the fools who signed themselves up for it are now complaining.

    Why should renters pay a cent? They don’t get any of the benefits of home ownership such as a highly inflated sense of self importance, guaranteed 10+% appreciation, and the ability to not be kicked out of your house. Owning a home is both a smart thing to do and a guaranteed investment. Therefore it makes sense that these smart people, with their massive home equity wealth, should have to shoulder the tax burden. Property taxes are but a small and minor detraction from what is guaranteed to be the most incredible and extraordinary thing many people will ever do (sign up to pay a mortgage). Besides, if you need more money to pay your property taxes, just HELOC it out of your home! You’re already a homeowner so that shouldn’t be a problem.

    Poor poor bitter homeowners. Paying taxes on their bubble values.

  14. Herve Estater Says:

    Some countries have 2 different taxes: one for the owner, one for the occupant (so if you live in your own house, you pay both). Ultimately this does not result in more money being collected (as CB points out, the property tax is “included” in the rent, the same way your “free phone” is actually included in your monthly plan), so here we’re really talking semantics.

    Real Estater sure sounds bitter. Will that conflict with his new strategy to acquire 2 investment properties within the next few months? Stay tuned!

  15. Real Estater Says:

    anon,

    The issue is not about homeowners. It’s about people who live off of the state not paying taxes. When you go to a restaurant, you pay taxes. When you rent a car, you pay taxes. When you purchase goods and services, you’re supposed to pay taxes. Why is renting a home any different?

  16. CB Says:

    If landlords are collecting taxes on behalf of the government, there needs to be a separate line item for taxes, paid directly to the IRS.

    Yes, as in my example in #11, instead of the landlord putting $2500 into his pocket every month to cover the expenses of ownership (taxes included), he/she will be collecting $2375 and sending $125 to the state on behalf of the renter.

  17. Real Estater Says:

    >>the property tax is “included” in the rent

    Again, I call balony on that. You can’t have a tax system where the amount collected is unknown. The IRS must know must know exactly how much was collected from the renter.

  18. CB Says:

    You can’t have a tax system where the amount collected is unknown

    The amount is published on the county assessors website. Rental income enables the owner to pay that tax.

  19. Herve Estater Says:

    > Again, I call balony on that.

    And I call typo on that.

  20. Pralay Says:

    Will that conflict with his new strategy to acquire 2 investment properties within the next few months? Stay tuned!
    —–

    LOL! Let’s revisit what Faux Estater said two years back.

    By now I’ve shared with you the secrets to becoming wealthy through real estate. Let’s recap:


    2. Let the renters pay for your investment home. The more stubborn they are, the more support you get!

    So, if renters pay for his investment properties, who should pax the tax? Renter or investor?

  21. Pralay Says:

    it’s equitable because renters use the same services as home owners.
    —-

    I agree. So it makes perfectly sense to abolish Prop 13. After all, a homeowner who bought his home 30 years back uses the very same service that a new homeowner uses. :)

  22. Herve Estater Says:

    > So, if renters pay for his investment properties, who should pax the tax? Renter or investor?

    Not so fast. Let him figure out who pays the utilities first.

  23. anon Says:

    “anon,

    The issue is not about homeowners. It’s about people who live off of the state not paying taxes. When you go to a restaurant, you pay taxes. When you rent a car, you pay taxes. When you purchase goods and services, you’re supposed to pay taxes. Why is renting a home any different?”

    Property tax is a tax on ownership of property. Renters do not own the property they live in.

  24. anon Says:

    “Not so fast. Let him figure out who pays the utilities first.”

    Herve that’s called asking the right questions if [sic] when you know the answer.

  25. Pralay Says:

    When you rent a car, you pay taxes. When you purchase goods and services, you’re supposed to pay taxes. Why is renting a home any different?
    —-

    Why why why? Poor (and bitter) Faux Estater. Let’s add some more why for him

    – If you purchase goods and services, you are supposed to pay tax. Why purchasing a home any different? (Think about the revenue the state will get once Faux Estater buys his 2 investment properties!)

    – You cannot deduct interest of auto loan from your income. Why deducting interest amount for home loan?

    Why why why?

  26. Seriouslady Says:

    The idea that renters should pay a tax is ridiculous for many reasons.
    1) The OWNER of the property pays property tax.
    2) If that owner bought the property long ago and people don’t like Prop 13 then they should repeal it. Yes, I know it requires a serious majority and it will probably never happen. Or in my opinion only allow it for your primary residence. I know many people with multiple homes who pay next to nothing on them. I think old people should be able to stay in their homes but not rent our multiples homes bought in the 70’s for huge amounts of money and almost no taxes.
    3) It is not the renters fault that the housing bubble exists and/or that the owner paid too much for their house. Waaa! I deserve more money for my ridiculous purchase – some people are ridiculous. If housing prices had continued to go up these same people would have cowed about what “savvy” investors they were. Gross.
    4) The invisible hand of the market will set rental and house purchase prices. The silly antics of the gov. to prop up housing prices has made purchasing WAY more expensive to own than to rent – so why own? I bank the difference every month. Yes, I am a renter.
    5) people bought their homes of their own volition. That they made a bad investment is not my problem. Just as if they bought a bad stock. Welcome to the real world.
    6) The governments need to figure out how to streamline tax collection for everything. Why do we have a sales tax, prop tax, state tax, fed tax, vehicle tax, etc. You get the idea. Keep tax fee collecting cheap by only having it in one place. The expense of maintaining all these tax collecting agencies is very high. Don’t add it it by adding a renters tax. Which agency would over see this? How would we pay for the salaries? Etc? Personally I think a flat tax is best. It gets rid of all of the games people play on taxes. Make it simple, stupid, as people say. The more complicated you make it the easier it is to cheat the system and the more people you have to pay to administer it.
    7) Overall the gov should cut spending on the ridiculous pensions and crappy employees (while paying out high salaries and benefits) to save money. Citizens are out of money and they need to mind their own store before they try to collect more money. The tit has run dry, folks.

    Rant off. Have a nice day.

  27. Herve Estater Says:

    Side note: if renters start paying a tax, tax-evasion schemes like the one Real Estater promoted become harder.

  28. Real Estater Says:

    anon says,

    >>Property tax is a tax on ownership of property. Renters do not own the property they live in.

    That’s right. Property tax and the “rental tax” are apples and oranges. Owner pays property tax; rental pays rental tax. It’s two different taxes for two different reasons.

  29. Real Estater Says:

    Pralay says,
    >>So it makes perfectly sense to abolish Prop 13. After all, a homeowner who bought his home 30 years back uses the very same service that a new homeowner uses.

    Same service, same tax amount. Why should the owner pay more just because the property appreciated in value? He does not use more service just because the property is worth more. What you’re arguing is complete nonsense, and that’s why the overwhelming majority of voters disagree with you.

  30. Real Estater Says:

    Pralay says,
    >>So, if renters pay for his investment properties, who should pax the tax? Renter or investor?

    Everyone should pay tax. Property owners pay property tax. Renters pay rent tax. Who pays for whose investment is a different topic.

  31. Real Estater Says:

    Pralay says,m
    >>If you purchase goods and services, you are supposed to pay tax. Why purchasing a home any different?

    It’s not any different. That’s why we pay property tax based on the amount of purchase price.

    >>You cannot deduct interest of auto loan from your income. Why deducting interest amount for home loan?

    Because the government wants to give incentive for home ownership. If you’re still asking this question, you are truly clueless.

  32. Alex Says:

    We need additional tax revenue for California. Status quo does not work. If you rent a hotel for a week, you pay taxes. If you rent an apartment or a house, you should be made to pay your fair share too. We can set up a system where renters pay a lower rate, but that rate should not be zero.

    Faux Estater, applying your pot-holed-riddled logic, then homeowners shouldn’t be allowed any interest deductions either.

    We don’t get interest deductions on our car payments or credit card bills. Why should people get mortgage interest deductions?!

    That makes as much sense as your hotel tax analogy. It’s idiotic. Wait. I shouldn’t expect any better from you.

  33. Real Estater Says:

    Seriouslady made some good points:

    – If people don’t like Prop 13 they should repeat it. Obviously the people have spoken and Prop 13 is the decision of the majority

    – “The invisible hand of the market will set rental and house purchase prices”. That’s exactly right, and it’s exactly what I said. The rent is based on the market. It does not mean the owner is collecting a phantom tax on the government’s behalf.

  34. Pralay Says:

    Same service, same tax amount.
    —–

    Same service, same amount? Let’s assume there are two families in Palo Alto and they own similar homes. One bought home in 1980 and another bought in 2010. They would pay same tax (for same service)? Give me a break.

    —-
    Why should the owner pay more just because the property appreciated in value?
    —–

    Why should the owner pay LESS just because they bought their home 20 or 30 years back? Just remember for similar properties, if older homeowners are paying less, new homeowners are subsidizing them (and paying MORE).

  35. Real Estater Says:

    Alex,

    Already explained in #31. You and Pralay should move in together.

  36. Alex Says:

    it’s equitable because renters use the same services as home owners. .

    I use as much services as you schmucks out there. Why should I be taxed at a higher income tax rate then? Why is my freaking take-home income only 50% after federal, state, social security, etc taxes?

  37. Pralay Says:

    - If people don’t like Prop 13 they should repeat it. Obviously the people have spoken and Prop 13 is the decision of the majority
    —-

    And according to you, there is no “rent tax” in California either. Let’s move on.

    Don’t dream about rent tax in your lifetime. Because it is ridiculous. :)

  38. Real Estater Says:

    Pralay,

    I’ve already addressed the issue of Prop 13. You have two options:
    1. Try to repeal the law (good luck)
    2. Buy a house (if you can’t beat them, join them)

  39. Pralay Says:

    Everyone should pay tax. Property owners pay property tax. Renters pay rent tax.
    —-

    Yes, your granny who bought her home in 50 years back should pay same amount of tax. Everyone should pay fair tax amount.

  40. Real Estater Says:

    All,

    Service is one part of the tax equation, but it’s not what tax is all about. If you paid $1M for something, whether it’s a boat or a house, you should expect to pay more tax than something bought for $50K. If you have high income, you also pay a larger share. That’s why the tax system is complicated.

  41. Pralay Says:

    Pralay,

    I’ve already addressed the issue of Prop 13. You have two options:
    1. Try to repeal the law (good luck)
    2. Buy a house (if you can’t beat them, join them)

    Bitter homeowner Faux Estater,
    If you think renters don’t pay tax, sell your home and become a renter. If you can’t beat them, join them.

  42. Alex Says:

    Already explained in #31. You and Pralay should move in together.

    Your explanation is idiotic. If you were a baby seal, I’d club you.

  43. Real Estater Says:

    >>Yes, your granny who bought her home in 50 years back should pay same amount of tax. Everyone should pay fair tax amount.

    Based on your argument, there should be a flat tax system. Everyone pays 1000 bucks a year, end of story. Will you vote for that?

  44. R Says:

    If a tax on renters were to be imposed, the landlords would end up paying it, further increasing their tax burden.

    Why?

    Because people only have a certain amount they are capable of committing to shelter each month. Which is why job losses and pay decreases lead to lower rents across the board. Imposing a renter’s tax would simply reduce the amount remaining for rent by the amount of the tax, thereby lowering rents by the amount of the tax.

    So who ends up paying the “renter’s tax”? Hint, its not the renter.

  45. Pralay Says:

    If you have high income, you also pay a larger share.

    That’s called income tax. Now you are speaking like a a$$hole.

  46. Pralay Says:

    Based on your argument, there should be a flat tax system. Everyone pays 1000 bucks a year, end of story. Will you vote for that?
    —-

    Yes, I will vote. But I won’t vote for “rent tax” and I don’t think many Californians will vote either.

  47. Real Estater Says:

    Let’s do a quick survey here. How many people agree with Pralay that we should have a flat tax system?

    Let me make sure you guys know what you’re signing up for. If you’re a banker making $1M a year. You pay a thousand bucks. If you’re a starving musician making 30 grand a year, you also pay a thousand bucks.

  48. Pralay Says:

    If you paid $1M for something, whether it’s a boat or a house, you should expect to pay more tax than something bought for $50K.
    —-

    Perfectly legitimate argument. Let’s put sale tax in home purchase. Abolish property tax and replace with “city/county service tax”. Guess what, your granny who bought her home 50 years back will be in trouble. She won’t be able to pay service tax and will move out.

  49. Pralay Says:

    Let me make sure you guys know what you’re signing up for. If you’re a banker making $1M a year. You pay a thousand bucks. If you’re a starving musician making 30 grand a year, you also pay a thousand bucks.
    —-

    You are twisting it. Flat tax has nothing to do with income tax. It’s about service tax (replacing property tax).

  50. Pralay Says:

    Let’s do a quick survey here. How many people agree with Pralay that we should have a flat tax system?
    —-

    Let’s do a quick survey here. How many people agree with Faux Estater that we should have a “rent tax”? :)

  51. Herve Estater Says:

    > If you were a baby seal, I’d club you.

    Quote of the day.

    > Everyone pays 1000 bucks a year, end of story. Will you vote for that?

    Flat tax actually refers to “flat rate tax”. If you knew anything about taxes, I should not have to explain that to you.

  52. nomadic Says:

    Wow, I guess the rain is keeping people inside on their computers today! Sorry to be late to rant about old people. ;-)

    Actually, Herve’s proposal in #8 seems like a very equitable solution to reform Prop 13. It pares away a lot of the unintended consequences that came along with its adoption. There’s one more point that I’d add – a cap on assessed value equal to inflation each year. One of the key reasons Prop 13 passed is because there was a bubble and people had a tough time being able to afford their taxes. Just imagine how difficult it would have been to see your property tax double from 2002-2006. It’s impossible to plan for that kind of thing and people on regular salaries can’t budget accordingly.

    Seriouslady makes some interesting points above. #2 raised a question for me. Given that old people who have rentals they acquired back in the 1970s don’t pay much in taxes and can rake in good money for rent, they have higher income as a result. Of course they have to pay taxes on that income. I wonder: 1) how that income tax amount compares to comparable property tax if it was pegged to market value; and 2) where that tax income goes. I’m nearly certain that local municipalities don’t get any revenue from income taxes, so Prop 13 effectively shifts revenue AWAY from local communities to the state and federal coffers.

  53. Real Estater Says:

    >>But I won’t vote for “rent tax” and I don’t think many Californians will vote either.

    Rent tax should be considered a fundamental tax like income tax and sales tax. It should be decided by law makers, and not by citizens. Like I said, there’s already precedent for it. When you rent a hotel room, you must pay the tax, and it’s shown as a separate line item. The hotel is accountable for paying that exact amount to the government. None of this “tax is already included in the room rate” b.s.

  54. Pralay Says:

    Rent tax should be considered a fundamental tax like income tax and sales tax.
    —-

    Keep hoping, Faux Estater. :)

  55. Real Estater Says:

    Pralay says,
    >>You are twisting it. Flat tax has nothing to do with income tax.

    Go do some research on the flat tax debate, and come back after you’re educated.

  56. Pralay Says:

    Go do some research on the flat tax debate, and come back after you’re educated.
    —-

    My argument has nothing to do with flat rate income tax. It’s about flat tax for services.

  57. Herve Estater Says:

    > come back after you’re educated.

    I know it’s wishful thinking, but may I suggest you do the same?

  58. R Says:

    RE, I can’t think of any landlord who would vote for a renters tax because landlord’s understand that they will end up paying it. On top of property taxes.

  59. Herve Estater Says:

    > Wow, I guess the rain is keeping people inside on their computers today!

    Perfect weather to do your taxes actually :-)

  60. Real Estater Says:

    Herve,

    It’s Pralay who supports the idiotic tax concept, not me. Just to be clear, he wasn’t supporting the “flat rate” tax you were thinking of, but a flat-out flat tax.

  61. Alex Says:

    Based on your argument, there should be a flat tax system. Everyone pays 1000 bucks a year, end of story. Will you vote for that?

    I move that we should put Real Estater down. The stupidity gene must not be allowed to propagate. Will you vote for that?

  62. Real Estater Says:

    It’s funny, everybody complains about the California budget deficit, but when people are asked to pay tax, everyone wants to get out of it.

  63. nomadic Says:

    Perfect weather to do your taxes actually

    Very true. That’s what I should be doing, but with comments like the one about baby seals, this is far more entertaining.

    .
    After all of the above, the fact that RE still doesn’t understand basic Econ 101 well enough to grasp how a rental tax would affect the market, should speak volumes. He’s going to be a real Donald Trump (the version that goes bankrupt repeatedly) if he ever buys his rental property.

    You guys keep trying to explain it, but it’s like trying to teach differential equations to a three year old.

  64. Herve Estater Says:

    You know, the elderly may pay less property tax, but today’s rain is making their arthritis more painful… Booyah!

    (I know, mean streak)

  65. nomadic Says:

    Maybe we need a libertarian like Debra Medina – she’s running for Texas governor and wants to abolish property tax.

    http://www.medinafortexas.com/

    I guess she couldn’t move here though, because it would make her cry.

  66. Alex Says:

    Hell, it would make baby Jesus cry!

  67. R Says:

    “It’s funny, everybody complains about the California budget deficit, but when people are asked to pay tax, everyone wants to get out of it.

    RE – do you agree or disagree that landlords would end up paying most, if not all, of any renter’s tax?

  68. Herve Estater Says:

    R, you should clarify your statement. We all know what you mean, but Real Doofus will tell you that no, the renter would pay it (it would show as a separate line!) :-)

  69. R Says:

    Point taken, RE –

    Do you agree that any renter’s tax would lower rental rates across the board by the amount of the tax thereby reducing the money the landlord takes in each month?

  70. BuyersAreIdiots Says:

    Wow. Now this is an entertaining thread.

    What the short answer of this entire debate comes down to is what it has always come down to: tax the current generation MORE to compensate for the lower taxes and extremely uneven tax system imposed by the previous generation.

    Let’s examine this in finer detail:

    – The previous generation was able to purchase homes far more in line with their salaries, thereby allowing them to benefit by sheer timing
    – The previous generation then passed Prop 13, reducing the taxes they would have to pay on their already reduced priced homes. Coupled with passing numerous NIMBY measures to ensure further housing development is stifled
    – The previous generation had the benefit of pensions AND social security

    Now move forward to current times:

    – The current generation cannot afford homes due to the extreme bubble that formed in housing due in part to Prop 13, NIMBY measures and the credit bubble
    – The current generation now pays more per capita for education than the previous, thereby encumbering themselves more so than the previous generation had to contend with
    – The current generation pays substantially more in income taxes than the previous generation in the state’s vain attempt to compensate for the reduced tax revenue of Prop 13 and its after effects
    – The current generation has to contend with a substantially poorer and uneven public school system than the previous generation, also due to Prop 13

    And what is Real Excreter’s and some of the other posters on that linked thread’s solution to this? Tax the current generation MORE. Yup. That is a fair, balanced and equitable solution. And Glenn Beck is the reincarnation of Edward R. Murrow! :-D

    What this entire discussion shows me is just how desperate and dire the situation has become for this idiotic state and its pot smoking citizens. They have swam in their own pretentious hubris and arrogance for so long, that they can no longer fathom that THEY are in fact at fault and the current system is unsustainable.

    But hey, I say go for it. The concept will never fly with the voters, which means it will never see the light of day anyway. And this state will just continue to limp along and hemorrhage people to other states as its legislature bickers and argues and deluded home sitters like Real Excreter and his ilk will just watch in slow motion as things erode around them.

    Fortunately, I won’t be around to see it. Heading for Austin in September. :-)

    P.S. Real Excreter: it’s ‘baloney’. (Or bologna if you prefer the Italian spelling)
    You know, for such an astute ‘tech guy’ working on ‘mega projects’, I find it ironic that you haven’t mastered the spell checking feature on Firefox yet. ;-)

  71. CB Says:

    R, you’re exactly right. All a rent tax would do is shift some of the predetermined market value of the rent realized by the owner directly to the state.

    As far as I can tell, we already have a bona fide renters tax, but it’s hidden as the absence of the mortgage interest deduction for renters. A renter in a $2K rental pays more income taxes than an owner with an identical house payment.

    As an aside, the Dems failed to realize the convenient taxation hidden in deductions when they attempted to fine people who didn’t carry health coverage. All they would have to do is offer a deduction to those who did insure themselves. Same result, and nobody would notice.

    So, renters are taxed for renting.

  72. R Says:

    “As far as I can tell, we already have a bona fide renters tax, but it’s hidden as the absence of the mortgage interest deduction for renters. A renter in a $2K rental pays more income taxes than an owner with an identical house payment.”

    Yep, renters do pay tax by deciding to rent in the form of higher income taxes.

  73. BuyersAreIdiots Says:

    Well, I DID have a nice, well thought out written post giving my two cents. Unfortunately, once again, burbed’s moronic website seems to have eaten it.

    I am beginning to buy into bob’s and pralay’s conspiracy theory that burbed and Real Estater are the same person. Real Estater is ‘some tech guy’ who is obviously not very astute. And burbed’s web owner obviously couldn’t program a spam filtering algorithm to save his life.

  74. booyakasha Says:

    it warms my cockles to think home owners are jealous of renters.

    suck my cockles home owners.

  75. DreamT Says:

    what’s the argument about? explicit versus implicit renter tax? You people have no life!

  76. R Says:

    Not sure there is an argument. Or is there RE?

  77. bob Says:

    I’m going to do a bit of repeating… but so what. We do that all the time here. California’s budget woes will never be fixed until Prop 13 is at least modified. Modified meaning that the law is changed to stop benefiting businesses. I’ll refer to this Wikipedia article which sums it up nicely:

    http://en.wikipedia.org/wiki/California_Proposition_13_(1978)

    Owners of commercial real estate have also benefited: if a corporation owning commercial property (such as a shopping mall) is sold or merged, but the property stays technically deeded to the corporation, ownership of the property can effectively change hands without triggering Proposition 13’s provision that fixes the amount of tax based on the property’s resale value.[4] Since many properties owned by large companies are nominally owned by shell companies whose sole assets are the properties in question, this has led to situations that have struck many commentators, such as Steve Lopez and Michael Hiltzik of the Los Angeles Times, as absurd and unfair, with companies taking a lesser percentage of the overall tax burden than private homeowners.[4] Smaller property owners do not have the “shell company” advantage that large property owners do.[4] As an example, the Times has reported that the property tax bill of the historic Capitol Records building in Hollywood is approximately five cents per square foot, while a small house assessed at $300,000 may pay up to 60 times that on a per-square-foot basis. Critics of Proposition 13 have argued that this situation unfairly benefits commercial property owners and should be changed,[4] but recent attempted ballot initiatives have not succeeded in altering assessment formulas. Tim Taylor at the University of Minnesota has analyzed Prop 13 as part of a problem of “Generational Justice” and a pattern of specifically providing tax breaks and benefits to one generational cohort-and tax increases and reduction in services to another generational cohort.

    So basically not only does prop 13 have the effect of limiting how much tax can be collected from older homeowners, but from businesses- even major corporations -as well.

  78. DreamT Says:

    bob, what prevented home buyers from the late 70s from purchasing their house using an umbrella corporation? Individual contractors use them all the time.

  79. Herve Estater Says:

    > Not sure there is an argument. Or is there RE?

    No argument. When cornered, Real Estater always conveniently disappears, only to surface moments later with comments such as “Dow soaring!” or “Have you seen the <insert company name here> results? We’re all clear for take-off!” and ignoring the previous discussion completely…

  80. R Says:

    It is amusing how RE disappears when directly asked a question.

    RE, I’m still waiting. In case you missed it –

    RE, Do you agree that any renter’s tax would lower rental rates across the board by the amount of the tax thereby reducing the money the landlord takes in each month?

  81. Alex Says:

    RE won’t be answering your questions any time soon. I clubbed him like a baby seal.

  82. Mr. B Says:

    Yes please. Repeal Prop 13. I can’t think of a better way to kill Democratic machine politics in California.

  83. PA-S Says:

    1, what service?
    2, Why not spending less than taxing all the time.

  84. Real Estater Says:

    >>RE, I’m still waiting.

    Stop acting like a desperate renter.

    >>RE, Do you agree that any renter’s tax would lower rental rates across the board by the amount of the tax thereby reducing the money the landlord takes in each month?

    The same conjecture can be applied to just about anything that is taxed: The price of a car, the cost of gasoline, the price on a pair of sneakers, etc. The answers to your question are:
    – Who knows
    – It doesn’t matter

  85. Real Estater Says:

    Real Estater is right again: Silicon Valley is like Disneyland, the Happiest Place on Earth.

    If you are looking to relocate and feeling a little blue, you might want to set your sights on Silicon Valley for your next home, because, according to new research, this is American’s “happiest” place to be.

  86. mtv-renter Says:

    Wow, I think I’ve seen everything now.

    CA is losing population very fast, to the tune of 600,000 movers last year. The people who move aren’t the ones who are house slaves, they’re people who have the means to transplant elsewhere, presumably taking their income tax payments with them.

    Taxes which apply to narrow population segments distort the market and create inefficiencies. For example, Prop 13 discourages house turnover and is indirectly a large contributor to our traffic problems, since people don’t move closer to work, they commute. Likewise, taxing renter or homeowners under different tax schemes disturbs the balance between renters and owners, and we don’t know what sort of imbalance it will create. One thing’s for sure, it will drive productive people out of the state. This is simple economics, people! If someone claims differently, they’re an economic illiterate and deserve to be ridiculed.

    I’m a renter, personally, and quite happy with the arrangement, and so is my landlord. I pay him enough rent so that he covers taxes, maintenance, and has an income on top of that, which is great for him, and I get a nice place to live without having to commit enormous amounts of capital to do it, which is great for me! If the state starts meddling with this relationship, both landlords and renters may suffer, to the benefit of the state, of course. I’m a productive person who earns a good living, but I’m already taxed so heavily that an additional rental tax would probably make me lose the state. I looked up that the average CA tax payer pays $5,078 in income tax, I pay about ten times that, so the state would really lose out on this. I imagine that quite a few people are in my boat as well.

    For you economic illiterates (I’m thinking of one person in particular), google the “Laffer curve”. Once taxation goes above a certain total rate from all sources, increased taxes actually hurt revenue because people will intentionally work less or more out to avoid it since you exceed their tax pain threshold.

    On the upside, this will never pass, since this state is full of Democratic party supporters who are renting and living off the state.

  87. R Says:

    “The answers to your question are:
    – Who knows
    – It doesn’t matter”

    As someone who on numerous occasions has stated their desire to own rental property, it should matter to you, since a tax on renters will take money out of the pocket of landlords making real estate a less attractive investment.

  88. nomadic Says:

    mtv-renter, you pay $50k/year in CA income tax? What is someone who makes nearly seven figures doing on a blog like this? Or did you slip a decimal somewhere?

  89. Real Estater Says:

    >>Once taxation goes above a certain total rate from all sources, increased taxes actually hurt revenue because people will intentionally work less or more out to avoid it since you exceed their tax pain threshold.

    Not necessarily. People need a place to live, thus their pain threshold is very high.

  90. Real Estater Says:

    >>mtv-renter, you pay $50k/year in CA income tax? What is someone who makes nearly seven figures doing on a blog like this?

    A better question is, what’s someone making that much money doing without tax shelter? The money he makes is “pass through” money. It came into his bank account, then flew out the window.

  91. Real Estater Says:

    R says,
    >>As someone who on numerous occasions has stated their desire to own rental property, it should matter to you, since a tax on renters will take money out of the pocket of landlords making real estate a less attractive investment.

    You’re speculating about an outcome based on your simple-minded model. Overall rent could very well go up, just like when the cost of gasoline goes up, all gas stations charge more.

  92. nomadic Says:

    Overall rent could very well go up, just like when the cost of gasoline goes up, all gas stations charge more.

    Now you’re really grasping at straws. You’re sounding even more uneducated and not even trolling well.

  93. Real Estater Says:

    nomadic,

    Do you claim to know the answer? I don’t. The point of my post is that simple-minded economic modeling rarely works as one expects. In fact, even sophisticated economic modeling is often wrong.

  94. R Says:

    Well, this simple mind thinks a tax on renters would be terrible for landlords and real estate investment as a whole. It would hurt renters very little because they wouldn’t pay much, if any, of the tax.

    Care to share your thoughts on the subject?

    I don’t understand your gas example. I thought you were taking about a direct tax on renters, not a further property tax increase. A gas station increasing their price when the price they pay rises is not analogous to a tax on renters, it is somewhat analogous to an increase in property taxes. Which you earlier said are not passed on to renters.

  95. Pralay Says:

    Overall rent could very well go up, just like when the cost of gasoline goes up, all gas stations charge more.
    —-

    Stupid analogy. Who is “gas station” in tenant-landlord analogy?

    Secondly, please factually prove that gas stations charge more (in general) when gas price goes up. Keep in mind, “everybody knows it” might not be factual.
    2. “I hate it when gas prices go up.”

    Stations earn on average between 10 and 15 cents on a gallon of gas. Ironically, they earn the least when prices are highest. When fuel climbs, gas stations must shrink their profit margin to remain competitive, meaning they earn less per gallon than usual

  96. Real Estater Says:

    >>Care to share your thoughts on the subject?

    I already did in #92.

    >>I thought you were taking about a direct tax on renters, not a further property tax increase. A gas station increasing their price when the price they pay rises is not analogous to a tax on renters

    It’s actually quite simple. Think of this equation:
    S = R + T
    S = Sum amount
    R = Rent
    T = Tax
    Your assumption is that S must stay constant, therefore if T goes up, R must go down. I don’t believe this is necessarily true (acknowledging I don’t have a sophisticated economic model to prove it). If T goes up for everyone, then a higher S can be the result. If everywhere you go, you must pay 10 cents more per gallon of gas, then you gotta pay it, because you have to drive (similarly, you need a place to live).

  97. Real Estater Says:

    Another angle to look at it: at the end of the day, if we want to solve the budget crisis, we need more tax revenue. Home owners already pay taxes, now it’s the renters’ turn.

  98. Pralay Says:

    Home owners already pay taxes
    —-

    No they don’t enough.

  99. Pralay Says:

    If everywhere you go, you must pay 10 cents more per gallon of gas, then you gotta pay it, because you have to drive (similarly, you need a place to live).
    —-

    Faux Estater’s ignorance is obvious.

  100. Real Estater Says:

    Pralay,

    Time to put the Prop 13 debate to rest. It’s not going to happen. If it happens, it’d be bad for California, because it will hurt housing, which in turn would hurt the economy, which in turn would decrease tax revenue.

  101. Pralay Says:

    If T goes up for everyone, then a higher S can be the result.

    And by giving that gas analogy, you just defeated your own argument. :)

  102. nomadic Says:

    #95, the big difference is that if rent at one place goes up, I can move to a less expensive place. This is the concept of substitution. Within a reasonable range, apartment A and apartment B will be comparable.

    Now, if gas goes up 30 cents/gallon, what can I substitute? A bicycle? The bus? That’s not a close substitution.

  103. Pralay Says:

    Time to put the Prop 13 debate to rest. It’s not going to happen.
    —-

    Time to put “rent tax” debate to rest. It’s not going to happen.

  104. nomadic Says:

    Good point, Pralay. People do drive less. Doesn’t help RE’s argument of course.

  105. Pralay Says:

    #95, the big difference is that if rent at one place goes up, I can move to a less expensive place. This is the concept of substitution.

    Actually he himself nullified his own argument by giving gas analogy.

  106. Real Estater Says:

    >> the big difference is that if rent at one place goes up, I can move to a less expensive place. This is the concept of substitution. Within a reasonable range, apartment A and apartment B will be comparable.

    What are you talking about? Do you think one apartment will be assessed the rent tax but another won’t?

  107. Pralay Says:

    If it happens, it’d be bad for California, because it will hurt housing, which in turn would hurt the economy, which in turn would decrease tax revenue.
    —–

    You’re speculating about an outcome based on your simple-minded model.……

  108. Real Estater Says:

    >>You’re speculating about an outcome based on your simple-minded model.…

    Some things you don’t need to speculate, like if you jump off a 20 story building, chances are you’re going to die.

  109. Pralay Says:

    What are you talking about? Do you think one apartment will be assessed the rent tax but another won’t?
    —-

    Faux Estater,
    If you cannot comprehend it, ask your own kids. They might be able to comprehend better. I heard they are “well rounded”.

  110. Pralay Says:

    Some things you don’t need to speculate, like if you jump off a 20 story building, chances are you’re going to die.
    —-

    So does for “rent tax”. :)

  111. Real Estater Says:

    >>If you cannot comprehend it, ask your own kids.

    If you don’t have the answer, keep quiet. You won’t be taken for dumb or deaf.

  112. DreamT Says:

    “I heard they are “well rounded”.”

    He probably just meant they’re borderline obese from spending too much time on the internet, chat rooms and whatnot.

  113. Real Estater Says:

    Pralay,

    Just keep quiet as you did on #84 :-)

  114. DreamT Says:

    yeah Pralay, be well-rounded, will ya? STFU!

  115. Pralay Says:

    If you don’t have the answer, keep quiet. You won’t be taken for dumb or deaf.

    Ok, let me explain. nomadic said.

    the big difference is that if rent at one place goes up, I can move to a less expensive place. This is the concept of substitution. Within a reasonable range, apartment A and apartment B will be comparable.

    I put the keywords in bold.

    Now our Faux Estater asks:

    Do you think one apartment will be assessed the rent tax but another won’t?

    The fact is that nowhere nomadic said one apartment will assessed rent tax and another wont. Yet, our Faux Estater comprehended so.

  116. Pralay Says:

    Just keep quiet as you did on #84
    —-

    You mean that’s really worth discussion? I see those kind of rankings every month in magazines.

  117. nomadic Says:

    Thanks, Pralay. He’s just too thick to bother explaining simple concepts to.

  118. Pralay Says:

    He probably just meant they’re borderline obese from spending too much time on the internet, chat rooms and whatnot.

    Makes sense. He also mentioned “widely traveled”. Round thing travels better. You just need to kick it like soccer ball.

  119. DreamT Says:

    Strange. Widely traveled and Chat rooms usually don’t mix well together.

  120. nomadic Says:

    Just ask Kevin Smith.

  121. DreamT Says:

    or the FBI

  122. Pralay Says:

    No, it doesn’t. But when someone spends too much time in chatroom, you need to kick him. And if he is well-rounded, he travels widely (within the room though).

  123. Herve Estater Says:

    May I suggest this property for Real Estater?

    # Tenant Pays Gardener
    # Tenant Pays Gas
    # Tenant Pays Water
    # Tenant Pays Heating
    # Tenant Pays Hot Water
    # Tenant Pays Cable TV
    # Tenant Pays Electric
    # Tenant Pays Garbage

    OMG, tenants pay utilities!!! What’s next? Ponies?

  124. DreamT Says:

    Monies for Ponies?

  125. Pralay Says:

    # 122.

    The description says:

    2 separate completely remodeled cottages….

    —-

    Is it just like this unoffical duplex? That would be perfect for Faux Estater’s tax-evasion.

  126. burbed Says:

    >And burbed’s web owner obviously couldn’t program a spam filtering algorithm to save his life.

    I don’t deny that.

    I found your comment in the spam pile. The reason it was filtered there was because you used the word “Excreter” – which was added as a stop word sometime last year in a vain attempt to improve civility on the site.

    I’ve released your comment: http://www.burbed.com/2010/02/21/solution-to-californias-budget-woes-tax-renters/#comment-55516

  127. burbed Says:

    Incidentally, I have a theory that California’s expenditures are no more worse/broken than certain other states. However, unlike other states, California cannot cover the expense problems with revenue due to Prop 13. However, I haven’t synthesized the data to determine whether this is true or not.

  128. anon Says:

    “May I suggest this property for Real Estater?

    # Tenant Pays Gardener
    # Tenant Pays Gas
    # Tenant Pays Water
    # Tenant Pays Heating
    # Tenant Pays Hot Water
    # Tenant Pays Cable TV
    # Tenant Pays Electric
    # Tenant Pays Garbage

    OMG, tenants pay utilities!!! What’s next? Ponies?”

    The only thing tenants don’t pay for is the mortgage! lol

  129. Real Estater Says:

    >>The only thing tenants don’t pay for is the mortgage!

    Actually, that’s the primary function of tenants.

  130. Real Estater Says:

    >>And burbed’s web owner obviously couldn’t program a spam filtering algorithm to save his life.

    LOL. Blaming Burbed for doing name calling and violating the Bay Area spirit. Somebody obviously doesn’t understand the rules of engagement.

  131. Real Estater Says:

    >>“May I suggest this property for Real Estater?

    For a SFH, the tenant should be expected to pay utilities. Cable TV is obviously not included. However, I would definitely roll the gardener fee into the rent, because you can’t trust the tenant to maintain your garden.

  132. Real Estater Says:

    DreamT,

    How’s the RE market in San Diego?

  133. Real Estater Says:

    DreamT,

    Are you awake?

  134. R Says:

    @ 96, thanks for explaining your thought process. Not sure I agree, but until the government is stupid enough to impose a renter’s tax we won’t know for sure.

    And BTW, you guys need to get more beauty sleep.

  135. DreamT Says:

    #132 – How would I know, I live in Santa Clara..?

  136. Herve Estater Says:

    > How’s the RE market in San Diego?

    The answers to your question are:
    – Who knows
    – It doesn’t matter

  137. PA-S Says:

    Are we such an enthusiastic crowd that is so willing to taxes each other?
    Are we interested in where our tax money going?

  138. Herve Estater Says:

    > Incidentally, I have a theory that California’s expenditures are no more worse/broken than certain other states. However, unlike other states, California cannot cover the expense problems with revenue due to Prop 13. However, I haven’t synthesized the data to determine whether this is true or not.

    I remember I read some report that was claiming exactly the opposite. One the main issues with Prop 13 is not so much the amount that is collected, but the distribution of the tax burden (your older neighbors nomadic hates so much are going to pay much less than a new owner).

    Maybe looking at history of the California budget would help. Combine that with the report I mention on post #3 and you may be onto something :-)

  139. Herve Estater Says:

    > Are we such an enthusiastic crowd that is so willing to taxes each other?

    Not really. Real Estater is the selfish kind. He’s not a renter, so he would anything to tax renters. His next target is smart people.

  140. nomadic Says:

    #138, I’m not sure how this escalated from being irate about old people being able to vote for tax increases that they can exempt themselves from to “hating” old people.

    I just don’t subscribe to ageism. Why do they get special benefits solely for living longer than others? If they’re infirm or poor, that’s another issue.

    I think BAI captures some of it in his now-released comment in #70, although I don’t think the results were plotted out by the voters back then; it’s more like unintended consequences. BAI also left out the disappearing middle class – tech companies don’t generate the skilled labor jobs that the defense industry did back in the 70s and 80s.

  141. Pralay Says:

    However, I would definitely roll the gardener fee into the rent, because you can’t trust the tenant to maintain your garden.
    —-

    But please don’t roll the property tax and income tax into the rent. Let the renter pay his/her own “rent tax” (whether he pays is none of your business anyway). :)

  142. Pralay Says:

    Not really. Real Estater is the selfish kind. He’s not a renter, so he would anything to tax renters. His next target is smart people.
    —-

    While he keeps income “perfectly sheltered” (at least he claims so). Now he wants to
    – introduce rent tax
    – get rid of “God-damn AMT”.

  143. BuyersAreIdiots Says:

    I found your comment in the spam pile. The reason it was filtered there was because you used the word (explicit removed for sensitive ears) – which was added as a stop word sometime last year in a vain attempt to improve civility on the site.

    I’ve released your comment

    You know what, don’t bother.

    As someone who is the son of immigrants from a communist country, I have heard quite enough stories about content being removed from various publications for the ‘betterment of the state’. Nice to see that ideology is alive and well here in the good old US of A.

    But I’ll tell you what. From now on, I will only write posts that are kind, thoughtful and filled with references to puppies, flowers and new born babies. I certainly wouldn’t wish to hurt your sensitive ears.

  144. DreamT Says:

    what a dork!!

  145. mtv-renter Says:

    @143: You misunderstand censorship. When a government limits what people can say, that is indeed censorship and very evil. When a private citizen, like Mr. Burbed and his blog removes posts, that’s not censorship. This blog is his personal property, with which he can do as he wishes, just like you can throw a foul mouthed guest out of your house. I too grew up in a communist country, and I’m very familiar with their tactics, but Mr. Burbed, AFAIK isn’t a government representative trying to spread propaganda.

  146. R Says:

    Relax, burbed is just trying keep this board free from filth, not filter ideas.

  147. BuyersAreIdiots Says:

    When a private citizen, like Mr. Burbed and his blog removes posts, that’s not censorship. This blog is his personal property, with which he can do as he wishes

    Of course! The Bill O’Reilly tactic. Now it all makes sense to me. So yes. That makes it perfectly ok.

    Thank you for clearing that up for me and showing me the error of my ways. And as promised, only sunshine, roses and wonderful imagery from my posts from now on.

    what a dork!!

    Now DreamT, I believe that falls under the category of ‘personal attack’. Which as you know, is a no-no in the world of a burbed moderator. Be careful lest you be censored.

  148. BuyersAreIdiots Says:

    Relax, burbed is just trying keep this board free from filth, not filter ideas

    Go scan up in the comments and see which ‘filth word’ caused the entire post to be picked up as spam.

    Good thing I didn’t say ‘horsefeathers’ or ‘darn it’. I might have been shot.

  149. DreamT Says:

    BAI, you need to get a life. Your accusations against the burbed moderator(s) are senseless and their lack of perspective is an insult to the victims of communism censorship.

  150. BuyersAreIdiots Says:

    BAI, you need to get a life

    Another personal attack, DreamT? Such bravado to blatantly defy burbed’s moderation policy!

    Viva la revolution!

  151. nomadic Says:

    BAI, your playing the victim is a shame because the (released) post you made was pretty good.

  152. BuyersAreIdiots Says:

    BAI, your playing the victim is a shame because the (released) post you made was pretty good.

    I respectfully disagree.

    Now that I had a chance to re-read my post, I am shocked at myself. Such language. Such dis-respect for others. I am disgusted and disappointed with myself. Kudos to burbed and its stellar spam filtering capabilities to show me the error of my heinous ways.
    And kudos to DreamT for such effective word-smithing on his part. I mean, now that I now I am a ‘dork’, I can make peace with myself….

  153. DreamT Says:

    well in Something About Mary, she states that she likes her (stalker) boyfriend because he is “a complete dork”… Maybe I just meant you’re very likeable?

  154. Pralay Says:

    It’s time all the angry renters and bitter homeowners pay “residence tax” to Burbed.
    Residence tax is equivalent to rent tax for renter.
    For homeowner it is additional tax on the top of property tax.

  155. Alex Says:

    I’ve always considered burbed to be a communist. But this is his web site; he can do as he pleases.

    In the meantime, Real Excr3ment is still full of it.

  156. Herve Estater Says:

    After reading #143 I can only conclude BuyersAreIdiots bought a house.

  157. Real Estater Says:

    BAI,

    You and I don’t always agree, but I’m with you that DreamT is an skunk. There’s no polite way to put it, because he clearly instigated this incident. Anybody who disagrees is being unreasonable.

    A few days ago, I made a similar complaint to Burbed. Burbed would be the first to agree that the spam filter isn’t his greatest creation. What the hell is DreamT barking about?

  158. zanon Says:

    This is one of the most hysterical posts I have ever seen on Burbed. Bravo!

  159. Real Estater Says:

    Pralay says,
    >>Residence tax is equivalent to rent tax for renter.
    For homeowner it is additional tax on the top of property tax.

    A basic principle of taxation is that there shouldn’t be double taxation. If a renter is paying the rent tax on a property, that amount should be deductible from the owner’s property tax.

  160. Herve Estater Says:

    > Maybe looking at history of the California budget would help.

    Obviously it would not since the report on post #3 is for property tax collected in Santa Clara County… Guys, try to pay attention!

    (bob, the following contains information known as numbers, you are excused)

    Here are some numbers (from the SCC website):

    2000 $2,171,714,527
    2001 $2,644,630,990 (from recommended budget)
    2002 $3,263,852,013 (retrieved from 2003 final budget)
    2003 $3,445,065,755
    2004 $3,295,297,831
    2005 $3,369,114,807
    2006 $3,789,660,096
    2007 $3,747,066,435
    2008 $4,187,325,552
    2009 $4,009,778,125

    The amount is the countywide total expenditures for the given year.

    For your reference: $100 in 2000 is $123 in 2008 so inflation alone does not justify the changes.

    burbed, what’s your theory now?

  161. Herve Estater Says:

    > A basic principle of taxation is that there shouldn’t be double taxation.

    And there is no double taxation since the renter and the owner are different entities. Problem solved!

  162. nomadic Says:

    There’s double taxation all the time. Just look at corporate profits and taxation on dividends.

    Herve (ref. 160), didn’t burbed say that CA wasn’t any more dysfunctional than any other state? Spending grew 23% – but all of the states are pretty messed up, right? ;-)

    Seriously though, the spending side of the equation needs a thorough re-evaluation. I think California should abolish the state constitution and start over.

  163. DreamT Says:

    #160 – Budget is fair and fine, but is there a portion “borrowed” from the county by the state, as has been the case with some cities?

  164. DreamT Says:

    Correction: “an portion” (for the retarded one who thinks that skunks bark and that #70’s removal was somehow instigated by another poster)

  165. Herve Estater Says:

    #163 – Why don’t you find out and let us know?

  166. DreamT Says:

    #165 – Laundry’s MUCH more important!!

  167. nomadic Says:

    I thought you’re the only one to do work today, Herve Estater. I’d rather just speculate. And if I was really ambitious, I’d endeavor endeavour to be as illogical as RE.

  168. Herve Estater Says:

    Lazy skunk.

  169. nomadic Says:

    Yep; too bad the one under the building next to my office wasn’t lazy and was stinking up the place today.

  170. DreamT Says:

    was he barking too?

  171. Pralay Says:

    A basic principle of taxation is that there shouldn’t be double taxation. If a renter is paying the rent tax on a property, that amount should be deductible from the owner’s property tax.
    —-

    LOL! Faux Estater just nullified his own argument…..AGAIN. If double taxation is bad thing, then there is no point of having residence tax (or “rent tax”). The landlord ALREADY pays property tax. LET HIM DO. Now, whether landlord wants to tuck in the property tax in rent amount (implicit tax or “balony tax”), that’s his choice.

  172. Pralay Says:

    A few days ago, I made a similar complaint to Burbed.
    —-

    So, pot meets kettle. And one of them is hypocrite. :)

  173. burbed Says:

    Wow… it’s getting pretty heated here. Let’s try to cool it by enjoying the remaining days of the Winter Olympics, less we revert back to comment bingo.

  174. burbed Says:

    > I think California should abolish the state constitution and start over.

    Does anyone have an opinion on: http://repaircalifornia.org/ ?

  175. Herve Estater Says:

    > Does anyone have an opinion on: http://repaircalifornia.org?

    burbed dodging a question (see comment #160) and changing topic with another question… Sounds like burbed and Real Estater may be the same person after all.

  176. DreamT Says:

    Herve, it’s well-known that burbed likes to troll on his/her own site!

  177. anon Says:

    Everybody loves to troll burbed. Especially real estater.

  178. bob Says:

    Time to put the Prop 13 debate to rest. It’s not going to happen. If it happens, it’d be bad for California, because it will hurt housing, which in turn would hurt the economy, which in turn would decrease tax revenue.

    But the problem is that Prop 13 has already hurt the housing market. See- one of the main reasons houses cost substantially more in most Cali metros over any other comparative metros in other states is from the legacy of Prop 13, which basically disrupted the natural cycle of older residents cycling out of the market and younger ones moving in. Sounds cruel, but in every other state older residents tend to trade down once the costs of owning a large empty nester house grows too costly. That isn’t to say they are homeless, only that they tend to move to apartments, smaller homes, and so on.

    Here in California you have the bizarre tendency for older residents to be living in much larger, more expensive houses than even the generation right after theirs. Its fairly normal here for people making similar incomes from one generation to the next to own increasingly lower quality housing as the cost rises as a result of the disruption of this cycle. Hence the hyper-inflation of housing as a result, which incidentally led to not only the latest housing boom and bust, but several others that have occurred since the passage of Prop 13.

    So yes- prop 13 has in fact caused much mayhem in the housing market. If it were repealed it would likely be done so in a way in which older residents would get to keep their little freeloader shelter but new owners would gradually be brought into a system that brought in a more progressive tax system similar to other states.

    Repealing Prop 13 would in the long run actually be better for people like you who rely so heavily on the success of real estate ( even though I still think you’re an outright financial simpleton for doing so) By settling the housing market down to a consistent- albeit less “dramatic” pace of inflation would be good all around. Good for homeowners who could count on say- a 3-4% annual appreciation. Good for homebuyers who can buy houses at a more manageable price. Good for the state with more reliable, consistent revenue. Good for the citizenry as a whole whom can then have a tax system that marches lockstep with home price inflation that in turn improves schools, roads, and services.

    The bottom line is that you cannot have a unfair tax system that almost completely benefits one generation and punishes the others. You can’t have a tax system that is inefficient and doesn’t get tax revenue from such a lopsided model that doesn’t collect based on current universal home values.

  179. nomadic Says:

    The bottom line is that you cannot have a unfair tax system that almost completely benefits one generation and punishes the others.

    That appears to be how Californians like it though!

    bob, you are so earnest. How do you not get fed up with the arguments? As for your theory about Prop 13 driving prices up & up, that’s just how RE likes it. I think he’s the only one here who thinks no change in property taxation is needed.

  180. Real Estater Says:

    Bob,

    Don’t blame the old generation. They bought it, and they want to stay. You bought a car; don’t you want to keep driving it? Do you want a law to get you out of your car? Taxing old people to raise revenue is not the right solution. I disagree with it fundamentally regardless of real estate prices. What’s the real reason for rising home prices in California? It’s mmigration. People like you and others from the “communist countries” moving here is what’s driving up prices. If nobody moves to California, then the market here will behave like Texas. From an investor’s standpoint, one of the elements you want to pay attention to is the demographic trend of the area. If the prices get too high, some people will be forced to leave, then the problem will be alleviated naturally.

    Anyways, it’s another way of saying, you leaving will help the situation. Please leave our senior citizens alone.

  181. Herve Estater Says:

    > I think he’s the only one here who thinks no change in property taxation is needed.

    We all know he’s just trolling. But as long as it’s entertaining, let him do it.

  182. Herve Estater Says:

    > Does anyone have an opinion on: http://repaircalifornia.org/ ?

    I say we first see how the Cougar Convention goes, then we worry about repairing California.

  183. Pralay Says:

    You bought a car; don’t you want to keep driving it? Do you want a law to get you out of your car?
    —–

    LOL! Are you sure Faux Estater lives America? No, just because you bought a car, you cannot keep driving it. There are existing laws to stop you from doing so.

  184. Pralay Says:

    If nobody moves to California, then the market here will behave like Texas.
    —–

    Facts and Faux Estater are like matter and anti-matter. If they come in contact with each other, it just explodes.

    2008 estimate of California population
    Population increase 8.5%.

    Overall increase in USA 8%. So California is not much different.

    2008 estimate of Texas population
    Population increase 16.7%. F**k!!!!

    Didn’t we hear this news?
    California could lose a House seat after 2010 census

  185. Pralay Says:

    Anyways, it’s another way of saying, you leaving will help the situation. Please leave our senior citizens alone.

    I don’t have problem of “leaving” them alone as long as they use tax dollar proportionately. Let’s assume some senior citizen bought his home in 1960 and paying property tax accordingly. When he needs emergency service, he should travel back to 1960 using time-machine to get emergency service (ok, may be 1980, if we consider 2% per year discount). When his house catches fire, the firemen should come and put off the fire partially (I know it could be complicated to calculate based on 1960 purchase value and then giving 2% increment every year, but it can be worked out).

  186. nomadic Says:

    Are you saying I should burn down the house of the old guy who lives next door?

    If I do that, Herve Estater will never let me hear the end of it!

  187. Pralay Says:

    Are you saying I should burn down the house of the old guy who lives next door?
    —-

    Burning his house down is arson. But when his houses catches fire for whatever reason (say electrical fault), “leaving them alone” is Prop 13.

  188. Real Estater Says:

    Pralay,

    What’s the population density of Texas compared to California? We can move all the Indians from California to Texas and that state would still be under-populated.

  189. Real Estater Says:

    >> I think he’s the only one here who thinks no change in property taxation is needed.

    We all know he’s just trolling

    Herve,

    We all know you’re just not reading. All along I’ve been talking about changing the law to include a rent tax, and you’re accusing me of wanting no change? WTF?

  190. nomadic Says:

    tsk tsk, another error in comprehension. I accused you of not wanting change. However, I was referring to Prop 13.

    Even if you didn’t follow that, I did say no change in property taxation.

  191. Pralay Says:

    What’s the population density of Texas compared to California? We can move all the Indians from California to Texas and that state would still be under-populated.
    —–

    Neither California and Texas are populous enough. We have enough empty land too. Whom do your “widely traveled” kids travel with? Definitely not someone who even can’t spell Manhattan. Trophy wife’s new boyfriend?

  192. Real Estater Says:

    Pralay says,
    >>Neither California and Texas are populous enough.

    We trust you, just because you say so.

  193. Real Estater Says:

    >> I did say no change in property taxation.

    I’m sure rent has no relation to property. Got it.

  194. Real Estater Says:

    Do any of you have parents that own houses in California? Do you want to kick them out of their house during retirement to make room for people moving in from India, Communist China, and flyover land?

  195. Pralay Says:

    We trust you, just because you say so.
    —-

    Oh, boy. If you were smarter, you wound compare population density among metropolitan areas. Unfortunately you are not.

    If state population is the only reason real estate price gets high, 10 states ahead of CA would have lot higher price.

  196. Pralay Says:

    I’m sure rent has no relation to property. Got it.
    ——

    Great! (You just made self-defeating argument for one more time). As rent has no relation to property, a homeowner must pay some tax which has nothing to do with property (and property tax). Renter lives in rental property and pays rent tax. Homeowner lives in home and pays “homeownership tax”. We can put them together and name it “residence tax”.

  197. Pralay Says:

    Do you want to kick them out of their house during retirement to make room for people moving in from India, Communist China, and flyover land?
    ——

    Of course!!!!!!!

  198. Real Estater Says:

    Per Pralay’s own link:

    Population density of CA: 91
    Population density of TX: 35.88

    Now let’s look at Pralay’s earlier argument:

    2008 estimate of California population
    Population increase 8.5%.

    Overall increase in USA 8%. So California is not much different.

    2008 estimate of Texas population
    Population increase 16.7%. F**k!!!!

    F**K!!! What a great argument!

  199. Pralay Says:

    LOL! I did not make that state-wise argument, I just proved your earlier statement “if nobody moves to California, then the market here will behave like Texas” as nonsensical.

  200. Real Estater Says:

    Pralay,

    Texas trails far behind California in population density even with recent 16.7% increase. It’s a drop in the bucket, thus your argument amounted to nothing.

  201. Pralay Says:

    It’s a drop in the bucket.
    —–

    So does for California. The population density of Ohio (which is ahead of CA) proves it. Drop in the bucket. :)

  202. Real Estater Says:

    Is the population of Ohio increasing?

  203. Pralay Says:

    Yes.

    And let me preempt your next argument: the OH population is not increasing at the same rate as CA. :)

  204. Real Estater Says:

    Once again, you made an argument amounting to nothing, and lost sight of the original debate. How can you compare to California if the population growth is basically stagnant?

  205. Herve Estater Says:

    > Are you saying I should burn down the house of the old guy who lives next door?

    You insensitive clod!

  206. Pralay Says:

    How can you compare to California if the population growth is basically stagnant?

    Well, I compared with either Ohio only to prove you wrong. Let me summarize what you said so far.
    – First you compared CA with TX and blamed CA housing price to population increase. Proven wrong from TX and CA census data.
    – Then you said that population density of STATE is the reason (knowing that CA pop density is higher than TX. Too clever, isn’t so?). Proven wrong by population density data of 50 states, including OH.

  207. Herve Estater Says:

    > All along I’ve been talking about changing the law to include a rent tax, and you’re accusing me of wanting no change?

    Let me pralay 2 of your earlier comments:

    We need additional tax revenue for California

    If a renter is paying the rent tax on a property, that amount should be deductible from the owner’s property tax.

    Now that’s great change! I’m wondering if Real Estater suffers from schizophrenia…

  208. Real Estater Says:

    Pralay,

    Even after summarizing, you still don’t get the point. Both population density and population increase matter!
    Texas has a low population density, so an increase is not helping it. Ohio has a high density, but the population is not growing, so that doesn’t help it either. Get it now?

  209. Pralay Says:

    Even after summarizing, you still don’t get the point. Both population density and population increase matter!
    Texas has a low population density, so an increase is not helping it. Ohio has a high density, but the population is not growing, so that doesn’t help it either. Get it now?

    —–

    Poor Faux Estater! Grasping for straw! There is a reason I chose Ohio earlier. If your LATEST (and very predictable) argument is valid, Florida and Delaware (which are ahead of CA in term of both population density and increase) home price would have been higher than CA. That’s not all, that’s not all! Virginia and North Carolina with comparable population density (slightly below CA) but with higher population increase would see higher home value.

    Faux Estater and facts never get along. So let me preempt Faux Estater’s next dubious “you-still-don’t-get-the-point” point:
    - FL is full of old people. DE is too small to live. VA and NC are too cold and under snow. Therefore, population density + population increase + population age + size of state + cold + snow + blah + blah + blah + blah + blah + specialness + prestigious zip code matters. Get it now?

  210. nomadic Says:

    Thanks for the laugh, Pralay.

    What’s with all of the snow being dumped on Dallas this year?

  211. A. Lewis Says:

    Ah, an entertaining comment thread. Thanks for the show!

    I’d reiterate my points against Prop. 13, but who cares? I’d reiterate my points against Real Estater’s “logic”, but who cares!?

    A renter’s tax is not the droids you’re looking for, though by mildly disincentivizing renting, it’d be consistent with all the pro-homebuying tax laws we have (which should be abolished). I don’t expect it to happen anytime soon.

    Great post, Burbed.

  212. Pralay Says:

    What’s with all of the snow being dumped on Dallas this year?
    ——

    Drop Snowflake in the bucket.

  213. Pralay Says:

    I’d reiterate my points against Real Estater’s “logic”, but who cares!?
    —–

    His “logic” is simple – everybody should be taxed, except himself. As pointed by Herve already, Faux Estater wants more tax revenue, but at the same time he wants DEDUCTION too.

    BTW, I am sure A Lewis would remember tax-happy Faux Estater’s hilarious AMT problem last year. Let’s wait for his another hilarious tax problem this year. Tax day is around the corner!

  214. bob Says:

    Don’t blame the old generation. They bought it, and they want to stay. Taxing old people to raise revenue is not the right solution. I disagree with it fundamentally regardless of real estate prices.

    I’m not blaming the old folks on anything. The only thing I’m saying here is that if the other 49 states have a progressive property tax system that seems to work quite well then how come we can’t also? Most other states do have a sort of property tax cut for older residents. If anything prop 13 should perhaps have been setup to help actual old people versus simply putting all home purchases in a sort of time machine. The correct way to administer property tax would be to as mentioned- have a progressive tax system where all people involved share the “pain”… which in turn puts a consequence on rising home values. As I mentioned many times before when I visited Austin there was a big consideration in most people’s minds in regards to what house to buy based on taxes and taxes that they knew would go up with the home’s value. Result? Austin and most TX metros have some of the healthiest housing markets in the nation because those prices are kept in check yet the values still go up at a reliable rate. You claim to be an investor. A good investor looks for investments that can be counted on, meaning reliable, consistent income. Austin has had an almost non-stop appreciation in housing for almost 25 years. The mistake you make is that you’re basing your investment saviness in regards to BA housing on 3-4 years of immense appreciation but you also forget that the BA also routinely suffers from long and pronounced periods of home price declines and stagnation… meaning your returns are not all consistent and if you screw up you’re stuck with a non-performing asset for years at a time. Again… you call yourself an investor. I somehow don’t exactly agree with that.

    What’s the real reason for rising home prices in California? It’s mmigration. People like you and others from the “communist countries” moving here is what’s driving up prices. If nobody moves to California, then the market here will behave like Texas.

    California’s rate of growth was actually the most aggressive during and after WW2 up through the 60’s and 70’s. At that time California’s housing market was lock-step inline with national housing market trends. So when did it start jumping off the charts and start behaving erratically? Right after the passage of prop. 13. Coincidence? There have been 3 major booms and busts in CA since Prop 13, with each being worse than the last.

    From an investor’s standpoint, one of the elements you want to pay attention to is the demographic trend of the area. If the prices get too high, some people will be forced to leave, then the problem will be alleviated naturally.

    I think you need to re-evaluate the meaning of investing… or “investor” because I so far am unable to determine what logic you’ve drawn from to conclude that you yourself are one.

  215. Herve Estater Says:

    > I’d reiterate my points against Prop. 13, but who cares? I’d reiterate my points against Real Estater’s “logic”, but who cares!?

    I do.

  216. anon Says:

    Bob, I’m going to introduce you to a (apparently) foreign concept: tldr.

    http://encyclopediadramatica.com/Tldr

  217. Herve Estater Says:

    > So when did [California’s housing market] start jumping off the charts and start behaving erratically? Right after the passage of prop. 13. Coincidence?

    Don’t forget Sweden in 1978 became the first nation to ban aerosol sprays. Also, Grease came out. Blaming proposition 13 is just too convenient.

  218. Alex Says:

    Prop 13 is a fcking mess. I know it. You know it. And if you don’t, you’re fcking idiot or you’re in denial. Pick one.

  219. DreamT Says:

    Since we’re looking to zero in on the real culprit, anybody born in 1978 raise their hands.

  220. Herve Estater Says:

    > Prop 13 is a fcking mess. I know it. You know it. And if you don’t, you’re fcking idiot or you’re in denial. Pick one.

    You must be Swedish or a Grease fan. Or both.

  221. Real Estater Says:

    Bob, and others who care:

    If you are truly convinced Prop 13 is helping old people make easy money, then you should start buying houses now. Sounds like you’re already sold on the business model, so what the hell are you doing still renting? Don’t be Pralay-type stupid!

  222. Real Estater Says:

    Bob says,
    >>Austin has had an almost non-stop appreciation in housing for almost 25 years.

    And yet you can buy a mansion today for $200K. Like Burbed says, “If you bought, you’d be rich”. Hilarious.

  223. Real Estater Says:

    Bob says,
    >>but you also forget that the BA also routinely suffers from long and pronounced periods of home price declines and stagnation

    As I’ve stated numerous times, on the average the Bay Area doubles in price every 10 years. You can prove it to yourself by checking home prices here in the 50’s, 60’s, 70’s, and every decade thereafter. I have some elderly neighbors on the street who bought their home for less than 1 year of my house payments, and having talked to them I know for a fact what I’m saying is a true statement.

    I’d be very curious to hear what are those pronounced periods of price declines. If that’s indeed the case, why is it you can’t afford a home here?

  224. Pralay Says:

    If you are truly convinced Prop 13 is helping old people make easy money, then you should start buying houses now. Sounds like you’re already sold on the business model, so what the hell are you doing still renting?
    —–

    Right from the manual of used car salesman. :)

  225. Pralay Says:

    BTW, if the ONLY criteria of entering into a “business model” is “easy money”, how about this business? This one is even better. It has “fast cash” too.

  226. nomadic Says:

    You must be Swedish or a Grease fan. Or both.

    Swedish fan.

  227. bob Says:

    RE,
    Like I was hinting at before. You’re no investor and I can almost guarantee that you’ll be just like most other Californians who might own a house but little else. If you bought in 2003 you’ve actually lost money and you will continue to do so for the foreseeable future.In reality you’re not going to see any appreciation on that house for probably another 4-5 years. Sorry bud- but you really don’t have any right to dole out investing advice when you’ve already shown that you have failed at it so far. Good luck on that “asset” of yours.

  228. Herve Estater Says:

    Back to proposition 13: http://www.nctimes.com/news/opinion/columnists/rider/article_b060ac9d-fe86-5fb5-9995-0ffe5c2416c3.html

  229. Pralay Says:

    You’re no investor and I can almost guarantee that you’ll be just like most other Californians who might own a house but little else.
    —-

    Bob,
    Let’s just pretend that he is an investor. I know, I know, he is planning to buy his investment property for two years but couldn’t do it for various (and convincing) reasons, but at least he has good intention. Remember, he is the Savior of US economy:

    The affect will be less if they don’t include refinancing as part of this plan. In that scenario, it’ll be up to investors like me to save the eoconomy by buying houses. You can joke about it, but it is literally true.

    You can joke about it, but it is literally true……..well, hypothetically true. You want unemployment rate down from 11% to 4%? Jesus Faux Estater Saves!!

  230. nomadic Says:

    Good article, Herve Estater. Now that Prop 13 is cleared, I’ll go back to blaming idiot politicians and our broken state constitution. :-)

  231. Pralay Says:

    And renters for not paying rent tax. :)

  232. Herve Estater Says:

    States move to revoke charities’ tax exemptions.

    “We’re having to look at the public services nonprofits use and how we can adequately cover those costs,” said Matt Greller, executive director of the Indiana Association of Cities and Towns. “We can’t give them away for free any longer.”

  233. Herve Estater Says:

    Looks like Real Estater will get his renters tax: http://www.bloomberg.com/apps/news?pid=20601087&sid=afZBf5.6UZrc&pos=9 :-)

    “The new tax would apply to income from interest, dividends, annuities, royalties, capital gains and rents […]”

    Oh no, wait…

  234. nomadic Says:

    His perfect (tax) shelter has a leaky roof.

  235. anon Says:

    Oh jeez – they’re going to tax the “income” from the underwater “investments?”

    Bye bye middle class..

  236. anon Says:

    Oh lord! Won’t WillowGlenner love this!

  237. nomadic Says:

    is the sky falling, anon?
    :-P

    Maybe you’ll have to get a job. Sell the Cayenne! Uh oh.

  238. Herve Estater Says:

    > Oh lord! Won’t WillowGlenner love this!

    Think of those who are going to buy not one, but two investment properties!

    (of course they’ll just say they’ll pass the tax onto the renters, which is exactly what is done today with property tax, but that’s not the point)

  239. Herve Estater Says:

    Kidding aside, it would be nice to hear from Willow Glenner… A. Lewis and steve are back, we’re just missing madhaus and WillowGlenner now. Donna would like them.

  240. DreamT Says:

    why? they all scuba dive?

  241. anon Says:

    They are wealthy land owners!


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