The September 10, 2019, Let’s Talk Liberty was informative and frustrating. We looked at history of taxation, considering President Reagan’s removal of tax deductions for a wide range of interest (e.g., eliminating deduction for interest on credit cards and student loans). We looked at history of incomes, specifically the large jump in technology-industry salaries around the Y2K concern at the turn of this century, and how that bubble raised housing prices. We also talked about how housing prices dropped with the recession ten years later, circa 2008. Then we tried, unsuccessfully, to find any angle in which government could be involved in controlling housing, discussing how emotions and personal preferences determine where people want to live and can afford.
We talked about tax abatements and concluded they do not help maintain housing or improve the revenue stream for a city. There were stories of individuals buying housing just to get the tax breaks, then selling when the abatements ended. But, there were also tales of people buying houses with the incentive of the tax break and continuing to stay in the house as families grew and became established in schools and other community activities. Then, the day after our discussion, the Des Moines Register ran a story about the Bondurant-Farrar school district collecting $900,000 in property taxes that it should not have received given an agreement to Facebook. That is a significant amount of money for any taxing authority to give away. (The error also raises more questions about who is monitoring the abatements.)
Instead of huge new developments, what about restoring current housing? We liked this idea as it saved the cost of adding infrastructure and services to large swaths of new construction. We also liked that repairing housing could be done by smaller businesses, widening the participants beyond large developers. A suggestion was made for government to put out requests for proposal for restoring houses, using those as a means to attract new participants. That suggestion was countered with the idea that Libertarians meet with contractors to gain their support in restoring housing rather than encouraging newer developments, and without the need for new laws or regulations.
Instead of tax abatements, what if property taxes were not sold at auction but accumulated to be used as incentive for repair and resell of housing? Consideration was given to the flow of money into government on a steady basis. Currently, delinquent property taxes are sold months after they are due. Would delay of revenue interfere with government’s paying of bills? The response was government already reduces its income with tax abatements.
We talked about some ideas Chase Holm, a Libertarian and a candidate for mayor of Des Moines, has for housing and property taxes. More information can be found on his campaign website at; https://holmrunformayor.com/
Marco Battaglia, a Libertarian and a candidate for at-large City Council seat, also has housing plans: https://www.battagliafordsm.com/
Ultimately, it comes down to individual choices. Some people want housing to make a profit. Others want it for a family homestead to be handed down from generation to generation. Some just want a reliable place to live and others want a glamorous space in which to entertain. A government cannot set rules that accommodate all.
Tax abatement budget error: https://www.msn.com/en-us/news/us/bondurant-farrar-faces-900000-budget-hole-after-miscommunication-over-facebook-assessment/ar-AAH9oDu