Earnings Tax

[bahua]

I read in the article where the state constitution would have to be amended in order to allow the Land Tax. What's the politics behind wanting to keep the status quo with the Earnings/Income tax?

The original purpose for such a state-level requirement is to keep municipalities from instituting crazy offensive taxes for whatever reason. It's a pretty common requirement. Only two or three states don't have it.

[LenexatoKCMO]

I wonder how you value the land without valuing the improvements?  Seems like that would be even more of a balls out guess than the current property tax appraisals. 

[bahua]

Improvements certainly have an effect on the land's value, but land value, in general, is based much more on the aggregate value of the land in an area. For example, the land occupied by 1 KC place, and the empty hole next to it differ only slightly in supposed assessed value.

I have started reading the Show-Me Institute's paper on this, but am startled to see that their website(hosted ironically by Dreamhost) is horribly slow. Here's the paper hosted on my site.

[mean]

Those crazy libertarians and their completely reasonable, realistic, logical and attainable plans that could never possibly work because I said so.

[LenexatoKCMO]

Yeah but in a lot of parts of a old developed city there may not be much of a trade in unimproved land to base anything on.  If I have a home on Ward Pkwy and there hasn't been an unimproved parcel sold in my area in ages, how are they ever going to establish any legitimate reference for what portion of the property value is attributable to the land and what part is attributable to the improvements?  In that example you have the added complexity of giant mansions sitting on a prestigious addresses, lots of room to go either way if you don't have much of a baseline.  

[bahua]

I'm sure there's a formula. I just don't know what it is. One thing that is certain though: Under land tax, there is no room for prestige.

[studentper]

i haven't looked at my real estate tax in a long time, but doesn't it have the value of the land along with the value of the building listed on it?  For some reason, I recall it being $10,000-15,000, but I could be mistaken.

I would think a quick and dirty way to estimate land value would be market value of the land+house minus the value of the cost to build or rebuild the house.  Everything above the cost of putting the building up would be the value of the land, including it's location and prestigious address.  A 1/4 acre lot on Ward Parkway is certainly worth more than a 1/4 acre lot on Prospect, whether we call it location or prestige doesn't seem important.

[shinatoo]

i haven't looked at my real estate tax in a long time, but doesn't it have the value of the land along with the value of the building listed on it?  For some reason, I recall it being $10,000-15,000, but I could be mistaken.

I would think a quick and dirty way to estimate land value would be market value of the land+house minus the value of the cost to build or rebuild the house.  Everything above the cost of putting the building up would be the value of the land, including it's location and prestigious address.  A 1/4 acre lot on Ward Parkway is certainly worth more than a 1/4 acre lot on Prospect, whether we call it location or prestige doesn't seem important.

Not a big fan of regressive taxes. Especially since the rich have more resources to get out of paying taxes than the poor.

[studentper]

Not a big fan of regressive taxes. Especially since the rich have more resources to get out of paying taxes than the poor.

I think this would be a less regressive tax than the current property tax.  While the property values in my neighborhood could be 2-3x more than the property values in another, the land values would be 10-15x more.  (and these numbers are pulled directly from my ass, so let's not start a debate on multiples)

Just from a common sense perspective a house in decent condition in any location in this city just won't vary by that much, but the land value will vary by alot.  (Three bedrooms one bath ranges from, what $50,000 to $300,000?)  It could be argued that the actual land value in some parts of the city is next to zero given the number of vacant weed-filled lots that nobody will buy at any price.

Also, a person will need less "resources" to dispute a land tax than a property tax, becuase there are fewer variables.  Even then, it doesn't take a whole lot to dispute the property tax.

[bahua]

Not a big fan of regressive taxes. Especially since the rich have more resources to get out of paying taxes than the poor.

What difference does being easily able to pay your taxes make?

[shinatoo]

What difference does being easily able to pay your taxes make?

What? What did I say about the ease of paying taxes?

[bahua]

Not a big fan of regressive taxes. Especially since the rich have more resources to get out of paying taxes than the poor.

Since nobody actually "gets out" of paying taxes, I can only assume that you mean that it's unfair to the poor that the rick are capable of paying their taxes more easily.

[DiggityDawg]

I saw a story about this "Show Me" report in the Star this AM, & the first thing I thought was "Isn't this what bahua's always goin' on about?" 

Here's a link :

http://www.kansascity.com/mld/kansascit ... 547964.htm

[lock+load]

So what happens when someone wants to sell their land in KCMO and move to JoCo, and no one wants to buy it because of the land tax burden?  They eventualy abandon it, and the city ends up with the property, generating zero land tax revenue?

[shinatoo]

Since nobody actually "gets out" of paying taxes, I can only assume that you mean that it's unfair to the poor that the rick are capable of paying their taxes more easily.

You really believe that the rich don't have resources to find way to hide there income for taxation? That they don't have fleets of tax accountants that help find ways around the tax laws?

Plus your jump from "getting out" of paying taxes to paying taxes "more easily" befuddles me. Unless by "more easily", do you mean they have more resources to pay there taxes with? Or that they can e-file?

[kard]

So what happens when someone wants to sell their land in KCMO and move to JoCo, and no one wants to buy it because of the land tax burden?  They eventualy abandon it, and the city ends up with the property, generating zero land tax revenue?

They'll look at the property tax in JoCo and say, "ya know...land tax looks pretty good."  Because there wouldn't be any tax on the stuff on top of the land--just the land itself.

[bahua]

You really believe that the rich don't have resources to find way to hide there income for taxation? That they don't have fleets of tax accountants that help find ways around the tax laws?

Whether they "get out" of it or not, they are responsible for almost all the tax revenues the IRS or other taxing agency takes in. It baffles me that you think the ability to pay for someone to find tax advantages and exemptions somehow is a bad thing.

Plus your jump from "getting out" of paying taxes to paying taxes "more easily" befuddles me. Unless by "more easily", do you mean they have more resources to pay there taxes with? Or that they can e-file?

No, I refer to the fact that monied people are able to shoulder their tax burden more easily, in that it doesn't cut into their living expenses like it does for less wealthy people. In that case(and this is a completely different argument), I don't think the solution is to tax the rich until it hurts them as much as it hurts the poor. I think the solution is to stop taxing the poor altogether. Why should it be painful at all?

[bahua]

They'll look at the property tax in JoCo and say, "ya know...land tax looks pretty good."  Because there wouldn't be any tax on the stuff on top of the land--just the land itself.

This is certainly an advantage of land tax, but the gentleman from MU didn't suggest this. He suggested combining land tax with the existing property tax. I think it's the wrong way to go about it, but it would certainly be an improvement over the current system, for all involved.

[shinatoo]

No, I refer to the fact that monied people are able to shoulder their tax burden more easily, in that it doesn't cut into their living expenses like it does for less wealthy people. In that case(and this is a completely different argument), I don't think the solution is to tax the rich until it hurts them as much as it hurts the poor. I think the solution is to stop taxing the poor altogether. Why should it be painful at all?

I agree, land tax is akin to flat tax, therefore placing a disproportionate burden on the poor. Same with sales tax. I am not in the camp of those who want to eat the rich, I just want to make sure that the poor don't get screwed.

I really need to look at Land Tax in more detail.

[bahua]

The paper written by the guy from MU, linked above, is a good place to start.