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Judging from the comments, it appears that a yes vote for the super homestead deduction is hardly a done deal.
It appears that people living in the more expensive counties do have an incentive for voting no, based on the following comment, which I quote
Quote:
Vote NO on the super exemption. You'll pay more than you are now in just a few years time. They don't tell you there is NO cap anymore and they can raise your assessment as much as they want. Keep your 3% tax cap with the save our homes plan. It's better, much better in the long run.
I could see why people in the less expensive counties would have more incentive for voting yes because it will take them a lot longer to exceed the $200,000 and $500,000 thresholds in the proposal, while many of those in the more expensive counties are already there or very close.
Thanks. mac, good find, the article seems very well prepared (especially for a newspaper article).
I don't expect much from the rollback. It's not much of a percentage, exempts school districts and can be overridden by the local government, all of which lessens the impact on homeowners, and also lessens the impact on governments. Some folks may save a little, and some governments can likely afford to cut back that small amount. I see it largely as a symbolic gesture.
The other part of the proposal is disturbing to me. First of all, it involves yet another Constitutional amendment, and I very strongly believe that such amendments should be reserved for basic changes in Constitutional authority, not as a substitute for legislative action. In some cases the amendments are used to make an end run around the state legislators; in this case the legilators are using it to duck responsibility for passing a law.
Save Our Homes was passed as such an amendment and has turned out to be terrible law. I'm really afraid that this massive Homestead exemption could turn out to be just as bad in unforeseen ways. In fact, I can foresee a couple of the ways it would be bad law -- (1) it is like using a sledge hammer on all watches instead of a screwdriver on the broken ones (2) it will likely tip the balance of tax unfairness away from the long time homeowners in favor of the new home builders, and I'm sure I can think of a few more given a little time
But, I have personal reasons -- personal greed -- that would make it very beneficial for me to sit back and let this become law. We are building a new house that will likely cost around $350,000 for just the house alone, and our total taxable value for the 5 acres, house, pool, barn and other improvements could easily exceed $600,000. Because it will be a new house, it will be wide open to being added to the tax rolls at any value they decide. The new Super Exemption could save me taxes on as much as $180,000. I'd like that.
But, in a rural location like Okeechobee, the base exemption of $50,000 would add a huge amount to the number of homes paying no taxes whatever for the services they receive, while the Super exemption would cripple the tax collections. Services would plummet. I can see why they are promising that vital services would be cut. Think about it by reversing the math:
The owner of a house assessed at $200,000 is currently paying taxes on $175,000 after the $25,000 Homestead exemption. If the Super exemption passes, his exemption will jump to $150,000 (75% of value) and he will pay taxes on only $50,000. So, the actual reduction is from $!75,000 to $50,000! If the tax rate is 20 mills ($20 per thousand) his annual tax bill drops from $3,500 to $1,000.
If a community is made up of mostly modest homes under $200,000 in taxable value, as many rural towns are, their tax collections would be only 28% of their current collections. No municipality can survive with those kind of numbers.
Maybe I'm missing something. I sure hope so, and I hope someone can point it out to me. But, I surely wouldn't want to be a county or city administrator and be suddenly faced with a 72% reduction!
Thanks. mac, good find, the article seems very well prepared (especially for a newspaper article).
I don't expect much from the rollback. It's not much of a percentage, exempts school districts and can be overridden by the local government, all of which lessens the impact on homeowners, and also lessens the impact on governments. Some folks may save a little, and some governments can likely afford to cut back that small amount. I see it largely as a symbolic gesture.
The other part of the proposal is disturbing to me. First of all, it involves yet another Constitutional amendment, and I very strongly believe that such amendments should be reserved for basic changes in Constitutional authority, not as a substitute for legislative action. In some cases the amendments are used to make an end run around the state legislators; in this case the legilators are using it to duck responsibility for passing a law.
Save Our Homes was passed as such an amendment and has turned out to be terrible law. I'm really afraid that this massive Homestead exemption could turn out to be just as bad in unforeseen ways. In fact, I can foresee a couple of the ways it would be bad law -- (1) it is like using a sledge hammer on all watches instead of a screwdriver on the broken ones (2) it will likely tip the balance of tax unfairness away from the long time homeowners in favor of the new home builders, and I'm sure I can think of a few more given a little time
But, I have personal reasons -- personal greed -- that would make it very beneficial for me to sit back and let this become law. We are building a new house that will likely cost around $350,000 for just the house alone, and our total taxable value for the 5 acres, house, pool, barn and other improvements could easily exceed $600,000. Because it will be a new house, it will be wide open to being added to the tax rolls at any value they decide. The new Super Exemption could save me taxes on as much as $180,000. I'd like that.
But, in a rural location like Okeechobee, the base exemption of $50,000 would add a huge amount to the number of homes paying no taxes whatever for the services they receive, while the Super exemption would cripple the tax collections. Services would plummet. I can see why they are promising that vital services would be cut. Think about it by reversing the math:
The owner of a house assessed at $200,000 is currently paying taxes on $175,000 after the $25,000 Homestead exemption. If the Super exemption passes, his exemption will jump to $150,000 (75% of value) and he will pay taxes on only $50,000. So, the actual reduction is from $!75,000 to $50,000! If the tax rate is 20 mills ($20 per thousand) his annual tax bill drops from $3,500 to $1,000.
If a community is made up of mostly modest homes under $200,000 in taxable value, as many rural towns are, their tax collections would be only 28% of their current collections. No municipality can survive with those kind of numbers.
Maybe I'm missing something. I sure hope so, and I hope someone can point it out to me. But, I surely wouldn't want to be a county or city administrator and be suddenly faced with a 72% reduction!
Chances are when that $200,000 house you use as an example was bought they paid like $55,000 and with SOH they are not paying $3500 but paying next to nothing in taxes. It will balence things out.
You know It is hard to understand what argument was used to pass SOH. I know they probably said it would keep people from being taxed out of their houses but the inequity it set up caused it's only set of problems. True peoples taxes stayed low but it traps them in their home for life. It is harder to sell due to the new tax the next owner will pay and they can't afford to move themselves for the same reasons. They are sitting on their biggest asset and will die without ever enjoying it because they can't afford to down size. I believe there are only 2 states that have SOH, I wonder why? In practice it has proven to be a bad idea. The super exemption I believe is a no lose for everybody. Forget the BS about cutting services, they pi$$ away every dollar they can get their hands on now.
Lets cut them off and make them accountable. They need to be on a budget and get rid of the spend, spend and ask for more policy. They need to begin running our cities like businesses, which they are. Not the current blank check spend, spend system that operates now. Take the money away and let them learn to run our cities right. I can assure you not one actual essential service will be cut. They may have to quit with $100,000 remolding of their offices, or trips all over the place on the peoples dime and maybe get rid of the dozens of useless assistants they have on the payroll, most who are related to someone.
Our local politicians run wild with our money. It is one scandal after another in the papers and I don't want to give them another nickel without accountability. They don't even have any arguments against other then scare tactics and threats. Let them make cuts who gives a damn. Are you telling me they are going to cut a cops job before one of the hundreds of useless parks workers most cities have on the payroll who do nothing all day?
Maybe I'm missing something. I sure hope so, and I hope someone can point it out to me. But, I surely wouldn't want to be a county or city administrator and be suddenly faced with a 72% reduction!
Quote:
Originally Posted by tallrick
This is disturbing, are you saying that a house built in the boondocks of Okeechobee would be worth 600,000? That scares me more than anything else.
Yes, maybe you are missing something: further massive planned inflation in asset prices, education, health, food and energy (while the "official" CPI for cheap imported consumer goods still hovers around 3%).
Here is a way to fight back. This group has become the "parent" of all the tax revolt groups. They are building steam, were mentioned in a few papers. You won't see too much about them as most of the media loves taxes as much as the dirtbag politicians. Invest a stamp, and don't forget to VOTE EM OUT !
According to the proposed new rules, can the new homeowner, after the new rules are passed (if they pass), also opt for the old homestead rules, or is he forced to abide by the new super-exemption rules?
In view of expectations of further massive asset-price inflation in the long term, it may make more sense to choose the old rules, even for those buying after 2007, or simply vote no to the proposal.
According to the proposed new rules, can the new homeowner, after the new rules are passed (if they pass), also opt for the old homestead rules, or is he forced to abide by the new super-exemption rules?
In view of expectations of further massive asset-price inflation in the long term, it may make more sense to choose the old rules, even for those buying after 2007, or simply vote no to the proposal.
SOH will not exist anymore, except for those who already have it and choose to keep it. Unless property values were to double and triple like happened a few years ago your taxes will not go up anyway. The huge tax increases were not due to new taxes being added or raised, it was due to property values going up.
Tax increases go up by 1/10s of mills spread over the whole county. Taxes will not skyrocket even if they do need more money at times, as they will and pass increases. You will see tax increases of like $10 or $20 over time because it is spread out equally. On a $200,000 home under the new proposal a tax increase of 2/10 of a mill would raise your taxes $18.50 for the year and it would do the same to everybody depending on their value creating fairness as well as affordability. Things always go up you just want it to be fair and easily absorbed by everybody. No one is looking for a free ride, just fairness and accountability by the people we trust to handle our money.
No one is looking for a free ride, just fairness and accountability by the people we trust to handle our money.
That's exactly why I expect further bouts of massive inflation, not in the next few years (this phase of the bubble has to fizzle out further) but in the medium/long-term.
Do you really trust the ruling class of this country, or of any country? Do you trust them to get it back on track with sound economic fundamentals?
There is a significant risk that in a few years out, maybe ten, that $200,000 and $500,000 will be paltry figures like $50,000 and $100,000 are today, and we will be discussing the same issue all over again.
The real reform would be to have both interest rates and government spending rates (federal and local) linked to increases in real productivity from real work across a broad spectrum of domestic economic activity, from shoe manufacturing to new forms of energy and transportation.
Not linked to the mere shuffling of paper representing ownership claims, claims on credit and payments, and so on, based on the accumulation of past wealth and an inflated paper, now also electronic currency, a mere unit of account whose real value we have lost sight of, serving only the few and turning the many back into indentured servants, crushed by massive interest payments supported by low wages. The people before us did not build the country on such miserable principles.
Last edited by bale002; 06-27-2007 at 10:06 AM..
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