DeSantis Is Serious About Ending Property Taxes in FL—but Will It Work and Who Will Pay the $40 Billion Difference?

[HeelYeah2012]

How are property taxes progressive in your view?

Since the value of real property is largely based on land and people all have to occupy land to survive, it would seem to be true that a larger percentage of the total cost of property Taxation for properties with lesser improvements is the land itself. Thats the non-negotiable part of existing...the land. The improvements are by choice. We still live in the same home we purchased in 2009 when our income was 1/3 the current level. We pay the same property taxes as those around us because we have the same footprint of house and land. Our home would sell for significantly more than most around us because of interior improvements that never factor into property tax assessed values. Most of our neighbors conservatively have half the income we do, a property that would sell for less, and pay the same amount of property tax we do.

How is that progressive?

You raise good points there. Especially in your unique situation I would agree.

My initial thinking was that low income folks either don’t pay property taxes or pay very little in them, whereas the vast majority of property taxes paid are by the wealthy.

But I am not trying to die on the hill of property taxes being progressive. Income taxes obviously are. And sales taxes obviously aren’t. So for purposes of the question I’m asking on this thread, perhaps better to just focus on sales tax vs income tax.

 

[mpaer]

You didn’t answer my questions at all.

Regressive taxes are bad in general if the overall package of taxes are regressive. But something like sales tax being regressive in that sense has to be viewed against other taxes, like income tax, which are progressive in nature.

The question I was going to ask is, would people who think sales tax is regressive support an elimination of sales tax, offset by higher income tax rates since income tax is progressive?

Income tax is progressive only if you accept the definition of "income" as it is now. I can increase my wealth by $50,000 with wages and it is taxed. Elon Musk can increase his wealth by $100 billion and if he does not sell any stock his tax is zero

 

[HeelYeah2012]

Income tax is progressive only if you accept the definition of "income" as it is now. I can increase my wealth by $50,000 with wages and it is taxed. Elon Musk can increase his wealth by $100 billion and if he does not sell any stock his tax is zero

It’s “income” tax, not “wealth” tax.

 

[wmheel1287]

You didn’t answer my questions at all.

Regressive taxes are bad in general if the overall package of taxes are regressive. But something like sales tax being regressive in that sense has to be viewed against other taxes, like income tax, which are progressive in nature.

The question I was going to ask is, would people who think sales tax is regressive support an elimination of sales tax, offset by higher income tax rates since income tax is progressive?

I would be totally supportive of a 20% flat income tax with zero deductions, exceptions, or special treatments for capital gains. 5% of that would be state and 15% National. Eliminate all other taxes. Somehow I doubt those who tout the progressive nature of our tax system would agree.

 

[BillOfRights]

You didn’t answer my questions at all.

Regressive taxes are bad in general if the overall package of taxes are regressive. But something like sales tax being regressive in that sense has to be viewed against other taxes, like income tax, which are progressive in nature.

The question I was going to ask is, would people who think sales tax is regressive support an elimination of sales tax, offset by higher income tax rates since income tax is progressive?

Why live on the extremes? Tax: good or bad? Should it be eliminated? The world isn't black and white. It's much more complex than most people seem to want it to be andare able to process.

The answer to your questions? It's complicated.

 

[HeelYeah2012]

I would be totally supportive of a 20% flat income tax with zero deductions, exceptions, or special treatments for capital gains. 5% of that would be state and 15% National. Eliminate all other taxes. Somehow I doubt those who tout the progressive nature of our tax system would agree.

I agree with the spirit of what you’re shooting for there - simplification of the tax system and everyone paying their fair share, with the elimination of many of the loopholes that currently exist and are used by extreme high earners.

The only thing I would push back on and the reason I wouldn’t fully support your plan as proposed is that there are certain deductions - a good example being the deduction for traditional 401(k) contributions - that I think are net benefit to society and need to continue to exist even in a world where we significantly simplify the tax system and enact a flat tax or similar.

I would be fine to eliminate (or significantly reduce) property taxes and sales taxes and just tax income more aggressively though, as an overall general strategy.

 

[mpaer]

It’s “income” tax, not “wealth” tax.

I understand that is how it is defined -that was my whole point It seems more sensible to tax "how much did you make last year " In my example Elon made 100 billion , I made $50,000

 

[HeelYeah2012]

I understand that is how it is defined -that was my whole point It seems more sensible to tax "how much did you make last year " In my example Elon made 100 billion , I made $50,000

Just to be clear, you think it’s more sensible to tax unrealized gains than income?

 

[farce©]

You didn’t answer my questions at all.

Regressive taxes are bad in general if the overall package of taxes are regressive. But something like sales tax being regressive in that sense has to be viewed against other taxes, like income tax, which are progressive in nature.

The question I was going to ask is, would people who think sales tax is regressive support an elimination of sales tax, offset by higher income tax rates since income tax is progressive?

I think some combination of income tax, sales tax, and property tax is probably most fair. I also think state income tax rates should be progressive rather than the flat rate such as NC.

Here’s a weird example of a very different approach. New Hampshire has no personal income tax and no sales tax so their property taxes are high (average almost 2% of assessed value annually) and they tax passive (interest and dividend) income. They also have a real estate transfer tax (RETT) of .75% on both the buyer and seller.

I lived in Cheshire County NH (Keene) which has an effective property tax rate of 2.436% annually, so the property taxes on a $400,000 house would be $9,750 per year.) And when you buy or sell that $400,000 house both the buyer and seller are paying a RETT of $3000. But you’re not paying income or sales taxes. The money has to come from somewhere and citizens of New Hampshire has decided the bulk of that burden will be borne by property owners.

 

[mpaer]

Just to be clear, you think it’s more sensible to tax unrealized gains than income?

No sir. I think its sensible to tax both. If you ask Elon how much he made last year in my example he would say 100 billion, I would say 50,000 .We should both pay some taxes

 

[mpaer]

I think some combination of income tax, sales tax, and property tax is probably most fair. I also think state income tax rates should be progressive rather than the flat rate such as NC.

Here’s a weird example of a very different approach. New Hampshire has no personal income tax and no sales tax so their property taxes are high (average almost 2% of assessed value annually) and they tax passive (interest and dividend) income. They also have a real estate transfer tax (RETT) of .75% on both the buyer and seller.

I lived in Cheshire County NH (Keene) which has an effective property tax rate of 2.436% annually, so the property taxes on a $400,000 house would be $9,750 per year.) And when you buy or sell that $400,000 house both the buyer and seller are paying a RETT of $3000. But you’re not paying income or sales taxes. The money has to come from somewhere and citizens of New Hampshire has decided the bulk of that burden will be borne by property owners.

wild -I had no idea

 

[mpaer]

No sir. I think its sensible to tax both. If you ask Elon how much he made last year in my example he would say 100 billion, I would say 50,000 .We should both pay some taxes. And in my example Elon would not pay on the 400 billion he already had-his wealth. Just his "how much he made this last year"

I apologize for screwing up the quote-reply thing here'The above is in reply to HellYeahs
Just to be clear, you think it’s more sensible to tax unrealized gains than income?

 

[BlooVooDoo]

I think some combination of income tax, sales tax, and property tax is probably most fair. I also think state income tax rates should be progressive rather than the flat rate such as NC.

Here’s a weird example of a very different approach. New Hampshire has no personal income tax and no sales tax so their property taxes are high (average almost 2% of assessed value annually) and they tax passive (interest and dividend) income. They also have a real estate transfer tax (RETT) of .75% on both the buyer and seller.

I lived in Cheshire County NH (Keene) which has an effective property tax rate of 2.436% annually, so the property taxes on a $400,000 house would be $9,750 per year.) And when you buy or sell that $400,000 house both the buyer and seller are paying a RETT of $3000. But you’re not paying income or sales taxes. The money has to come from somewhere and citizens of New Hampshire has decided the bulk of that burden will be borne by property owners.

Are there local RE taxes on top of that?

 

[CFordUNC]

I’m definitely someone who simultaneously believes in lower taxes and broadening the tax base, but also that it’s patriotic and a good thing to pay taxes. The biggest issue that I have as a taxpayer is that W-2 earned income is treated most the punitively. That has never made sense to me, and especially now as a high income earning household. My household W-2 will range from mid-six-figures to upper six-figures over the next three years, and once my spouse makes partner in her practice, it could likely be even higher. Yet even through taking advantage of maximizing every single available tax advantage retirement and savings account, I’ll still pay at the highest possible marginal rate. That’s totally fine, I consider it an immense blessing to be in a position to be able to do so. But the idea that someone in my situation who pays the maximum possible tax on earned income- even after taking advantage of every single possible legal tax reduction strategy- will still pay a higher percentage of my income in taxes then someone like Elon Musk or Jeff Bezos, is highly irritating.

 

[farce©]

Are there local RE taxes on top of that?

No, that’s the total. The state has a calculator online that allows you to see your total property tax rate by zip code.

 

[UNCMSinLS]

Local sales tax increases? So rural areas would just eliminate services and lean on fines to fund policing but not much else, while cities would have to have massive local sales tax increases because a functioning city requires such services.

But how would they pay for schools? State sales taxes combine with local property taxes and federal funds to fund public schools K-12. If there are no more property taxes and no increase in state sales taxes, how are schools funded?

Also, Florida just removed the income cap for their growing public school voucher system (which parents to apply vouchers at private schools and for home-schooling costs), though I think they still have a max number of available vouchers per year and wealthier families have lower priority than others if more people apply than there are available vouchers. I suspect the next step would be eliminate public schools and just give each child a voucher of whatever is available from sales taxes to figure out how to buy K-12 education.

Florida don't need no stinkin' schools. Jesus will take care of that every Sunday mornin'.

Another thing goofy (pun intended) about this idea is that higher sales taxes will likely depress tourism. But I suppose NOBODY ever goes on a vacation to Florida anyway.

 

[farce©]

I’m definitely someone who simultaneously believes in lower taxes and broadening the tax base, but also that it’s patriotic and a good thing to pay taxes. The biggest issue that I have as a taxpayer is that W-2 earned income is treated most the punitively. That has never made sense to me, and especially now as a very high income earning household. My household W-2 will range from mid-six-figures to upper six-figures over the next three years, and once my spouse makes partner in her practice, it could likely be even higher. Yet even through taking advantage of maximizing every single available tax advantage retirement and savings account, I’ll still pay at the highest possible marginal rate. That’s totally fine, I consider it an immense blessing to be in a position to be able to do so. But the idea that someone in my situation who pays the maximum possible tax on earned income- even after taking advantage of every single possible legal tax reduction strategy- will still pay a higher percentage of my income in taxes then someone like Elon Musk or Jeff Bezos, is highly irritating.

I think the notion that our highest tax rate kicks in at $625K/$750K is ridiculous when we have so many people in this country making 7+ figures annually.

 

[CFordUNC]

I think the notion that our highest tax rate kicks in at $625K/$750K is ridiculous when we have so many people in this country making 7+ figures annually.

Completely agree with you.

I also think that the SS cap is nuts comparatively.

 

[gtyellowjacket]

I’m definitely someone who simultaneously believes in lower taxes and broadening the tax base, but also that it’s patriotic and a good thing to pay taxes. The biggest issue that I have as a taxpayer is that W-2 earned income is treated most the punitively. That has never made sense to me, and especially now as a high income earning household. My household W-2 will range from mid-six-figures to upper six-figures over the next three years, and once my spouse makes partner in her practice, it could likely be even higher. Yet even through taking advantage of maximizing every single available tax advantage retirement and savings account, I’ll still pay at the highest possible marginal rate. That’s totally fine, I consider it an immense blessing to be in a position to be able to do so. But the idea that someone in my situation who pays the maximum possible tax on earned income- even after taking advantage of every single possible legal tax reduction strategy- will still pay a higher percentage of my income in taxes then someone like Elon Musk or Jeff Bezos, is highly irritating.

This is also my biggest issue. If you are paid on a W2 for your work, its pretty progressive, and you aren't dodging too many taxes. If you make most of your income from leveraging your wealth, you pay at less than half the tax rate of someone who could earn 100 times less than you did. That makes zero sense to me.

 

[UNCMSinLS]

How about this? NO taxes EXCEPT one: a 100% You-Can't-Take-It-With-You tax (a.k.a., Estate Tax). Maybe throw in a modest homestead exemption for the surviving spouse. But otherwise, everything gets sold at auction and deposited into state coffers.

I wonder if one of the incubators of public policy would ever try such a thing?