From: stephen@sprunk.org   
      
   On 30-Mar-15 17:26, Adam H. Kerman wrote:   
   > Stephen Sprunk  wrote:   
   >> On 30-Mar-15 00:16, Adam H. Kerman wrote:   
   >>> hancock4@bbs.cpcn.com wrote:   
   >>>> Many, many years ago government got away from just taxing real   
   >>>>  estate and taxed income and commerce.  Generally, these were   
   >>>> percentage--not flat fee taxes--so they more money one earned   
   >>>> or spent, the more in taxes they paid.  This was seen to be   
   >>>> more fair.   
   >   
   >>> By landowners, yeah. By tenants, not so much.   
   >   
   >> Landowners just pass on property taxes to their tenants anyway, so   
   >> there is no reason for them to prefer any other form of tax--unless   
   >> they have no tenants, i.e. they're speculators.   
   >   
   > In my state, whenever they argue that there should be more state   
   > funding for schools, that means a shift from property tax support to   
   > income tax support because the state hasn't levied property taxes in   
   > decades (and isn't likely to in future).   
   >   
   > So, if schools improve,   
      
   Spending more on schools doesn't improve performance; in fact, the   
   worst-performing schools _already_ have the highest costs per student.   
   The reason is that most of the money ends up going to overhead, such as   
   executive salaries, consultants, security and corporate welfare.   
      
   > tenants pay twice: Their rent rises, because better schools mean   
   > higher land value. Part of the rent goes toward the land tax portion   
   > of the real estate tax (which is difficult to pass on the tenant and   
   > generally isn't); the building tax portion of the real estate tax is   
   > paid in part by the tenant and in part in reduced net income by the   
   > landlord.   
      
   Not in the real world.   
      
   The rule of thumb is market rent should be 1% of the home's value.   
      
   At current rates, the P&I on a $150k mortgage is $760/mo.  Then figure   
   in another $1500/yr ($125/mo) for insurance, $3000/yr ($250/mo) for   
   taxes, and a couple hundred per month reserved for maintenance.  That's   
   $1500/mo, or 1%, with no profit for the landlord aside from the mortgage   
   principal reduction.   
      
   If property taxes go up, the rent has to go up too because the landlord   
   obviously isn't going to _lose_ money renting out the property; if so,   
   he wouldn't have bought it in the first place.   
      
   (The property's value may go up over time and his mortgage payment   
   shouldn't, but his taxes and maintenance costs will go up to match,   
   leaving him with no real profits until the mortgage is paid off.)   
      
   S   
      
   --   
   Stephen Sprunk         "God does not play dice."  --Albert Einstein   
   CCIE #3723         "God is an inveterate gambler, and He throws the   
   K5SSS        dice at every possible opportunity." --Stephen Hawking   
      
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