In a recent discussion with a group of principled, politically astute folks, the subject of property taxes came up. More specifically, protesting them. One of them felt it was his duty to do so. Needless to say, there was some animosity in the room.
The topic is oftentimes hotter than the Texas sun this time of year.
A few days later, Councilmen John Courage (D9) and Clayton Perry (D10) proposed raising the homestead exemption to 5%, from the current .01%. It was voted down.
Our energies are being misallocated here. These anecdotes point to why the whole property tax system should be uprooted and tossed aside.
The first problem is with the way it is constructed.
While there are various exemptions homeowners can utilize to lower their respective bills, the one the councilmen were trying to increase is the only one available to all. This fundamental unfairness is not without consequences.
New district 1 councilman Mario Bravo implied that the city can only afford to “protect senior citizens” with exemptions. That “protection” though, sometimes costs non-senior households four times as much in taxes.
If some of the un-“protected” bolt city limits, those who remain face the possibility of a rate hike to make up for the subsequent shortfall. Or, corporate landlords scoop up the abandoned houses, consolidating home ownership in fewer, bigger hands that can easily afford a higher bill.
No one would quarrel with helping seniors, or veterans for that matter, the other main beneficiary of current exemptions. Personal contributions to programs run by groups like the United Way, or various religious organizations, or even senior discounts show as much.
But picking winners and losers via property taxes breeds resentment, and probably explains why some council members promote workshops to help citizens dispute their bill.
However, this contributes to the next point of contention.
We certainly don’t begrudge citizens’ efforts to minimize how much government plunders from them. This is especially the case when the tax assessor’s appraised value is out of whack with private market estimates.
To their credit, these protesters are arguably more in-tune with the odiousness of this racket than the vast majority who have their mortgage lender escrow it for them.
But we wonder if citizens expend the same time and energy objecting to the tax itself. If not, protesting it arguably justifies its existence, and the millions of dollars the county spends to collect it.
In practice, the property tax is as detrimental as the income tax. Both disincentivize and erode the ability to save and invest, the sole acts which foster the prosperity we all enjoy.
Also, whereas you could lose your freedom for not paying tax on your income, you could lose your home for not ponying up on your property. And the cut for public schools, the only one bigger than that of the city, arguably skews K-12 education.
Likewise, given how easy it is to punch up our respective bills, it compromises our privacy.
It doesn’t have to be this way. A consumption tax is less distorting, less discriminating, and less intrusive.
The first and last gripe you’ll hear about it is that it’s “regressive,” meaning the lower someone’s income, the higher the effective tax they pay when purchasing non-necessities.
But that essentially implies that consumers are entitled to that third T.V., or that drum set, or that boat, etc.
The second counter-argument is that consumption powers the economy, and therefore we can’t discourage it. That is the height of misinformation perpetuated by the media. Think about it.
When you consume something, you literally chip away, or outright destroy the value that it embodied. Consumption ends production. Moreover, you don’t have the former without the latter. If we don’t produce, we don’t consume.
An extra $1.50 paid in tax on that sixth pair of $150 shoes could almost make up what the city would lose if it stopped discouraging San Antonians from building wealth. But that hike probably wouldn’t even be necessary.
People spend when they’re happy. It’s one byproduct of landing a new job, or getting promoted. Same for the business owner when, after a lot of work and investment, their venture succeeds enough to hire that new employee. It’s a virtuous cycle.
They’ve even invented a phrase for shopping sprees when people are sad; “retail therapy.”
We’re Americans. We like to buy stuff, so much so that we rent storage space for our extra stuff. That’s not going to change, and can only be enhanced when people don’t feel like they’re being looted involuntarily.
Combine that with clearing out some of the regulatory thicket that slows down growth, and rightsizing the expenditure side of the city ledger, and tax rates wouldn’t have to go up on the toys we want.
Politicos and entrenched interests will naturally decry this for one reason or another. That’s to be expected since their livelihood depends in part on a misplaced confidence that they can manage citizens’ resources better than they who earned it.
We must push them to do the right thing first (abolish the property tax), adjust accordingly, and call them out when they spin it as a false choice between that and “hav(ing) sidewalks.”
===
Denise Gutierrez-Homer was an interior design and decorative artist for 25 years, is a partner in a family real estate firm, and ran for San Antonio Mayor in Spring 2021. Christopher E. Baecker works in the energy industry, teaches college economics, and ran for city council in the same. She is Vice President of InfuseSA, where he is Policy Director.
The topic is oftentimes hotter than the Texas sun this time of year.
A few days later, Councilmen John Courage (D9) and Clayton Perry (D10) proposed raising the homestead exemption to 5%, from the current .01%. It was voted down.
Our energies are being misallocated here. These anecdotes point to why the whole property tax system should be uprooted and tossed aside.
The first problem is with the way it is constructed.
While there are various exemptions homeowners can utilize to lower their respective bills, the one the councilmen were trying to increase is the only one available to all. This fundamental unfairness is not without consequences.
New district 1 councilman Mario Bravo implied that the city can only afford to “protect senior citizens” with exemptions. That “protection” though, sometimes costs non-senior households four times as much in taxes.
If some of the un-“protected” bolt city limits, those who remain face the possibility of a rate hike to make up for the subsequent shortfall. Or, corporate landlords scoop up the abandoned houses, consolidating home ownership in fewer, bigger hands that can easily afford a higher bill.
No one would quarrel with helping seniors, or veterans for that matter, the other main beneficiary of current exemptions. Personal contributions to programs run by groups like the United Way, or various religious organizations, or even senior discounts show as much.
But picking winners and losers via property taxes breeds resentment, and probably explains why some council members promote workshops to help citizens dispute their bill.
However, this contributes to the next point of contention.
We certainly don’t begrudge citizens’ efforts to minimize how much government plunders from them. This is especially the case when the tax assessor’s appraised value is out of whack with private market estimates.
To their credit, these protesters are arguably more in-tune with the odiousness of this racket than the vast majority who have their mortgage lender escrow it for them.
But we wonder if citizens expend the same time and energy objecting to the tax itself. If not, protesting it arguably justifies its existence, and the millions of dollars the county spends to collect it.
In practice, the property tax is as detrimental as the income tax. Both disincentivize and erode the ability to save and invest, the sole acts which foster the prosperity we all enjoy.
Also, whereas you could lose your freedom for not paying tax on your income, you could lose your home for not ponying up on your property. And the cut for public schools, the only one bigger than that of the city, arguably skews K-12 education.
Likewise, given how easy it is to punch up our respective bills, it compromises our privacy.
It doesn’t have to be this way. A consumption tax is less distorting, less discriminating, and less intrusive.
The first and last gripe you’ll hear about it is that it’s “regressive,” meaning the lower someone’s income, the higher the effective tax they pay when purchasing non-necessities.
But that essentially implies that consumers are entitled to that third T.V., or that drum set, or that boat, etc.
The second counter-argument is that consumption powers the economy, and therefore we can’t discourage it. That is the height of misinformation perpetuated by the media. Think about it.
When you consume something, you literally chip away, or outright destroy the value that it embodied. Consumption ends production. Moreover, you don’t have the former without the latter. If we don’t produce, we don’t consume.
An extra $1.50 paid in tax on that sixth pair of $150 shoes could almost make up what the city would lose if it stopped discouraging San Antonians from building wealth. But that hike probably wouldn’t even be necessary.
People spend when they’re happy. It’s one byproduct of landing a new job, or getting promoted. Same for the business owner when, after a lot of work and investment, their venture succeeds enough to hire that new employee. It’s a virtuous cycle.
They’ve even invented a phrase for shopping sprees when people are sad; “retail therapy.”
We’re Americans. We like to buy stuff, so much so that we rent storage space for our extra stuff. That’s not going to change, and can only be enhanced when people don’t feel like they’re being looted involuntarily.
Combine that with clearing out some of the regulatory thicket that slows down growth, and rightsizing the expenditure side of the city ledger, and tax rates wouldn’t have to go up on the toys we want.
Politicos and entrenched interests will naturally decry this for one reason or another. That’s to be expected since their livelihood depends in part on a misplaced confidence that they can manage citizens’ resources better than they who earned it.
We must push them to do the right thing first (abolish the property tax), adjust accordingly, and call them out when they spin it as a false choice between that and “hav(ing) sidewalks.”
===
Denise Gutierrez-Homer was an interior design and decorative artist for 25 years, is a partner in a family real estate firm, and ran for San Antonio Mayor in Spring 2021. Christopher E. Baecker works in the energy industry, teaches college economics, and ran for city council in the same. She is Vice President of InfuseSA, where he is Policy Director.
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