BeyondGenius.com

Property Tax

I live in Massachusetts (or, if you prefer, Taxachusetts), and we’re in the midst of a gubernatorial campaign. One of the big issues is, to no one’s surprise, is taxes. The two major party candidates differ not in the fact that they want to cut taxes, but which one(s) and how much.

Both of the major party candidates, in fact, want to cut the property taxes. As the Republican candidate pointed out in the first debate, people are leaving the state because it is too expensive. Thus, the patter is that you cut the property taxes and I guess suddenly life will be much more affordable. (In a related note, does anyone remember when Orange County California messed with their property taxes?)

Massachusetts is an expensive place to live. Simply put, there’s a lot of people willing to pay a lot of money to live here. As a result, the Boston area is among the most expensive housing markets in the country. To use the actual terms, there is excess demand, which pushes up the price. A market left alone (or at least, so basic economic theory tells us), people leaving because it’s too expensive to live here should bring prices down (and as someone who started looking at house prices last year, boy has it). Falling property values have a distinct impact on the cost of housing, but voters don’t like it when the value of their property falls.

The idea of the property tax repeal making living more affordable for most people is just laughable. It tacitly promises to lower homeowner costs without lowering homeowner value; but it’s the value that makes housing here so expensive. Thus, the property tax “debate” is a political palliative. It reduces costs and reduces the tax burden (which, yay), but does nothing to make it more cost effective for a home buyer to purchase an overpriced property, or a renter to find a reasonable apartment. It is a good deal for the elderly, however. Their housing costs tend to be lower than for most people, as so many of them have their mortgages paid off already (unless they took out equity on their home, which is a whole other ball of wax), but many have a fixed income and property taxes may mean a significant difference in their expenditures. For the rest of us, we’re just up a creek.

Really, all I ask is that our candidates not lie to us about what the cut does. (Yes, I know. A politician not lie?). We can handle the “we just want to cut taxes, this is one that we think everyone will agree too, and it won’t make or break our ability to meet our other fiscal responsibilities.” Don’t promise us that we’ll get cheaper housing out of the deal to. The high property values are (sadly, for me) the burden of living in a state so many people want to stay in.