Thursday, September 20, 2012

The Renter's Tax

Yesterday when I was talking about the Coliseum, and I proposed a renter's tax, some of the commenters rightfully objected that renters do pay the property tax on a property.  Of course they do, I get it.  A property tax is eventually passed on to renters.  Y'all are missing my point entirely.

Property taxes are voted on by the general voting public, whether or not that voter owns property.  So, for renters that don't own property, those taxes are painless for them.  Sure, they wind up paying the tax as a part of their rental cost, but they don't see it.  What I'm proposing is entirely different.

When I propose a renter's tax, that would be a tax on rentals, either set at a percentage or a flat $10.00 per month rate that is added on top of the unit rental.  What used to be a $500.00 per month rent just became a $510.00 per month rent.  Even if the renter is on rental assistance, they will notice that the cost increased, and because many of them are subsidized at a set amount, the amount would probably come out of their pockets.  This would apply to all rentals, whether residential or commercial, and it would give "skin in the game" to folks who don't often worry about property taxes.

The idea could use some tweaking, but I think that it's a great untapped source of revenue, and it wouldn't hit single family dwelling owners.  We already pay enough property taxes.  Let the renters pick up the tab for some of the stuff that they want.  It would also encourage them to become property owners, which is good for America.


Rich Jordan said...

If enough landlords would figure out how much their property taxes were going to go up, and inform each of their renters how much their corresponding rent was going to increase if the tax increase goes through... that might prove useful.

But enough of them would have to do that legwork to make a difference.

Personally I could do without yet another tax that doubtless the landlord would be responsible for collecting, paying to the fedgov, processing paperwork, dealing with records and audits... but I certainly see your point about the benefits, and the 'social engineering' nudge involved.

Anonymous said...

Taxes on renters merely depress the value of the rental property - it is just like social security - there is no "Employer contribution" even though they call it that.

A prospective renter has a rent he is willing to pay. Add a tax to that number, and the amount he is willing to pay does not change - it just decreases the amount that the landlord can collect for himself.

So the person paying the tax is still the landlord, if you look at it from the right angle.

Be careful - an angel may get its wings every time a bell rings, but every time you say "There oughta be a law," an angel gets set on fire, and sometimes a bureaucrat is listening and gets ideas.

Anonymous said...

"If enough landlords would figure out how much their property taxes were going to go up, and inform each of their renters how much their corresponding rent was going to increase if the tax increase goes through"

The problem is(depending on where you live) there are often limits on how much a landlord can raise rent every year. I live nowhere near the place in question, but the situation is the same across the country.

The NY Giant/Jets/MetLife paid to build a new football stadium out of their own pocket. Good for them. Unfortunately the road expansions/new traffic signals/engineering to determine how much is needed was paid for by me. Yes I'm a renter, but the sad fact is my rent should be much lower. My landlord needs to cover her tax increases, and therefor I pay higher rent. My particular town has been redoing every damn park within it's borders, claiming it cost nothing due to state/federal grants. It doesn't seem to occur to them that that money still comes out of my pocket.

In the end, stop letting those who fail to pay their own way vote. I always vote against tax increases and spending in my boro(unless truly needed such as the new pumps for the overflow station that is supposed to help prevent flooding). I work, I pay taxes(including paying for schools I have no children in) I vote. You sit on your arse, collect a check and get free housing, no vote for you. Your kids don't get a say in how your income is spent, nor how much they are "owed" in allowance, why should any other mooch be different.

As an aside, NJ pays (IIRC) up to $2800 a month for section 8 subsidized housing. Every month I need to make sure I have $1k set aside for my rent(by working 50+ hours a week). The problem Isn't renters, it's renters who don't work for it.