The Miami-Herald is reporting that Rubio and others just announced a new proposal that goes a ways towards bridging the gap between the House and Senate proposals. It's described as:
"The new approach is designed to give a higher percentage tax break to people with lower-priced homes and would require voter approval. Homes with up to a $300,000 market value would be taxed on just 20 percent of the home's value. The taxable percentage on homes valued up to $1 million: 30 percent. Those over $1 million: 70 percent."
My view is that this is a great move. I had serious doubts about Rubio as a potential leader (hard-line stance only gets one so far) because of his unyielding proposal to eliminate property taxes and replace them with sales taxes (foolish move). Now he's stepped up to the plate with something that makes sense. I believe that the Senate will not go for that deep a cut and would want more moderate rates given their concern that local governments will be underfunded. Nevertheless, Rubio's stance does give the deepest cuts to those who likely need it the most (lower priced homes). He proposes somewhat deep cuts for the homes that fit the middle-class (this is a generalization) and low cuts for high-end homes. All in all a huge step in the right direction.
Opinions from other Floridians?
- Tchaka
Joe, it sounds like you might need to direct your argument to the IRS because they tax all of us at a higher volume tax based on income. And just about every local government I know of charges "proportionately more" in the sense that homes have different values.
I don't argue that those in less expensive houses can't afford the tax nor do most people I know. We tend to argue that they can't afford high taxes. Keep in mind that I'm not for this proposal per se, but I do see it as a big step forward in comparison to where things stood a mere week ago.
On a side note, when you write "someone who enjoys the same [sic] benefits" you are making an assumption. Just an FYI. Ideally, the same benefits......reality often differs though. Thanks for giving your input.
- Tchaka
I don't believe that I am making an assumption about enjoying the same benefits. I guess one can make an argument that schools, roads, police, and other gov't supplied amenities differ in the area of million dollar homes vs those that are three hundred thousand dollars. However, in the town that I live in, there is a large spectrum of home prices, all with the same amenities.
What I do not like about our current home tax situation is that neighbors, with identical houses, can be paying a wide differential spread of taxes. If I bought my home in 2006 for 300,000, and my neighbor bought his house in 1999 for 110,000, we would be paying completely different amount in taxes. We both enjoy the exact same tax provided amentities, however, I am paying significantly more. The current save our homes and homesteading tax situation never foresaw what happened to real estate in 2004-2006, and our gov'ts were spending like that revenue was never going to stop. I like the tax reform plans that roll back taxes to 2002, with growth and inflation in mind.
Joe, you ARE making an assumption based on your neighborhood. I'm glad that everyone in your town has the same amenities regardless - that's a good thing. But that's not the same everywhere else.
As for your 2nd paragraph, I am 100% in agreement with you on the inequities of taxes based on when a home was purchased. And while the SOH had good intention when implemented, it now helps create the inequities. I believe that the plan put forward that I blogged about taxes based on market value. So using your example, if your neighbor bought for $110k in 1999 and you bought an identical home for $300k last year, you would have the same market values. Therefore you would be taxed the same. Obviously there will be questions as to what rate, etc, etc....but there would be equality between the two of you.
Personally, I like the idea of the SOH but I can't think of a way to keep it without it rearing its head in the future. If taxes are rolled back to 2002, what would I pay? I bought last year and once taxes adjust I will pay around $10k/year. Back in 2002, I'm guessing taxes would have been around $4k/year. But due to SOH, the previous owners likely paid somewhere around $2k. Would I get the benefit of $2k or $4k per year?
- Tchaka
Tchaka, obviously we don't live in a world of equality, and there will always be debate on taxes, however, I think we can both agree that this is a very complicated and la ocally and nationally important topic. Other states are watching closely at what florida decides to do here. The impact of policy put in place will have national consequences. While I agree that the SOH was put in place with good intentions, it did not take into account the years of double digit growth that Florida has experienced.
I don't like taxes, most people don't. My business would be even more successful if taxes were gone, so would yours. There are very few things that the government can do better than the private sector. That all being said, I think the real problem lies in the spending habits of our local governments. Where I live, Brevard county, there has been much spending on reoccurring expenses, rather than capital improvements. We have not built roads to accommodate growths, however, we have added many new employees, and raised wages.
I am sure we will find a solution to the tax issue that will make most happy, however, I am not sure that we will fix the spending habits of our governments that have a use it or lose it philosophy. In reality, our taxes are really not that bad compared to other parts of the country, but they will get worse when the spending has overcome the revenue and millage rates are further increased. The real change needs to be made in how our g-ment spends there money.
Everyone looses in the end.
OK this is what happens when you own and rent out a rental property to your family and friends that can't afford to buy a house yet.
First someone buys the property; let's say you buy it before the property has increased, maybe back in the year 1997. Maybe you were break even with your cash flow on the property. So this owner bought low. And now after all the major increases in taxes (because they don't have a cap raises to what the appraiser says that it's worth 100%) you are then 3,000 dollars negative a month. So then you have to increase rents, which the market can't bare, so then the owner can't afford to fix up the property because of the negative cash flow. So basically the tax increases are causing rents to go up and substandard living for renters, because the owners can't afford to fix them up. And it's going to keep getting worse if you don't change the tax rate for rental property. If you don't open up the market to investors more and more property is going to go on the market and really lower your properties worth. Plus if you want to move and you can't sell you home and want to rent it out. Your property taxes will increase to 100% of what the property is worth. So basically you're stuck in your home forever, because you won't be able to sell it, no one wants to buy into this crazy tax structure.
Dear Bonnie,
Unfortunately, if the amendment fails, I don't believe there will be ANY tax reform down the road.
Here's why > The lawmakers who opposed this amendment (the reason it got so watered down), local governments and the media will:
#1) at best - claim it proves people don't really want ANY tax reform
#2) at worst - claim it is a mandate for higher taxes!
I could not even come close to passing my amendment capping ALL real property taxes at 3% - I couldn't even get five other senators to raise their hands to get a roll call vote on it!
Sure every lawmaker says he or she wants "Tax Reform." The fact is that "Tax Reform" means different things to different people/lawmakers. An early proposal for "Tax Reform" put forth by one political party actually would have increased taxes.
Do I like the situation? Heck no - but unfortunately, it is an ugly reality that helps make me appreciate my term limit.
Best always,
Bill Posey
Here is the letter I wrote To Bill Posey that he responded to above: POSEY.BILL.WEB
Subject: Dear Bill
You have got to be kidding me, my taxes went up another $300 PER MONTH!!!! Not per year PER MONTH. This has been going on for 4 years now. Every year it goes up $300 PER MONTH. What am I supposed to do, charge my tenants more money????? They can barely afford what I charge them now. How am I going to fix up my rental unit?????
Very Angry property owner,
Bonnie