Inflation, Interest Rates and the Economy for 2025

[kidthor]

---

Members don't see this ad.

Harvard says tuition will be free for families making $200K or less

Harvard University on Monday announced that tuition will be free for students from families with annual incomes of $200,000 or less starting in the 2025-26 academic year. "Putting Harvard within financial reach for more individuals widens the array of backgrounds, experiences, and perspectives...

www.yahoo.com

200k is not a lot of money anymore. Or almost everyone who gets into Harvard is from rich household

The median family in income in the USA is somewhere between 80-100K, so 200K is a lot to most people. 200K of family income puts you in the top 15th percentile.

 

[Splenda88]

The median family in income in the USA is somewhere between 80-100K, so 200K is a lot to most people. 200K of family income puts you in the top 15th percentile.

I am aware of that but for Harvard it's not a lot of money.

 

[cchoukal]

I am aware of that but for Harvard it's not a lot of money.

Well, that remains to be seen. At some point, I imagine they will publish the percentage of students for whom tuition is free. If that number is a high percent, then all the better.

 

[Ezekiel2517]

I am aware of that but for Harvard it's not a lot of money.

Their policy is actually a bit better than Stanford's, where free tuition is offered for 150K or less. At 100K or less, everything is free at Stanford including tuition/room+board/food. It used to be a 75K threshold... my cousin got a completely free 4 years at Stanford bc of this.

 

[nimbus]

Their policy is actually a bit better than Stanford's, where free tuition is offered for 150K or less. At 100K or less, everything is free at Stanford including tuition/room+board/food. It used to be a 75K threshold... my cousin got a completely free 4 years at Stanford bc of this.

Harvard, Stanford, Notre Dame et al have huge endowments. Harvard endowment is $53B. Annual operating expenses are $6.4B. They have a big cushion. Even with the research funding cuts, not sure why they implemented a hiring freeze. Maybe they’re expecting their holdings to decline.

Most of the wealthiest schools are covering “full demonstrated need” without loans. For the truly middle class it often costs less to attend a big name than a smaller name.

 

[Splenda88]

Well, that remains to be seen. At some point, I imagine they will publish the percentage of students for whom tuition is free. If that number is a high percent, then all the better.

Economic diversity and student outcomes at Harvard

See how Harvard compares to more than 2,000 American colleges.

www.nytimes.com

That was in 2015. With inflation, 200k/yr might be < 25% of the student body.

Boy! People who got into these schools are from rich families.

 

[aneftp]

Their policy is actually a bit better than Stanford's, where free tuition is offered for 150K or less. At 100K or less, everything is free at Stanford including tuition/room+board/food. It used to be a 75K threshold... my cousin got a completely free 4 years at Stanford bc of this.

Do these schools take into account parental assets?

Many docs can have kids later (say late 30s) and be retired by age 55/57. And their kids just enter college. And to the colleges the retired parents are poor due to lack of real income.

Like my colleague who retired at age 57 last year. Her son is applying to Hopkins med school. And she’s poor on paper.

 

[Ezekiel2517]

Do these schools take into account parental assets?

Many docs can have kids later (say late 30s) and be retired by age 55/57. And their kids just enter college. And to the colleges the retired parents are poor due to lack of real income.

Like my colleague who retired at age 57 last year. Her son is applying to Hopkins med school. And she’s poor on paper.

Yes, assets are factored in.

 

[aneftp]

Yes, assets are factored in.

Seems like primary homes and retirement assets are not included.

Say you have 700k remaining on your 3 million dollar Maryland home in taxable brokerage. Just accelerate and pay off the mortgage and deplete your “assets”. I can’t believe a public school entity advises the public to do this. I’m sure Hopkins follows the same financial aid formulas for free tuition.

https://www.montgomeryschoolsmd.org/siteassets/schools/high-schools/r-w/sherwoodhs/uploadedfiles/student20aid20secrets20minimize20the20impact20of20assets.pdf

 

[nimbus]

I think the basic problem with tariffs and trade wars is that we as Americans consume a disproportionate amount of the world’s resources and products. For example it’s very rare for people in other countries to commute to work in trucks and SUVs. Other countries can hurt us more with tariffs than we can hurt them. People who consume less are less affected by tariffs.

 

[MirrorTodd]

I think the basic problem with tariffs and trade wars is that we as Americans consume a disproportionate amount of the world’s resources and products. For example it’s very rare for people in other countries to commute to work in trucks and SUVs. Other countries can hurt us more with tariffs than we can hurt them. People who consume less are less affected by tariffs.

I’m fairly certain they can also fairly easily create new trade agreements with each other.

 

[emergentmd]

Harvard says tuition will be free for families making $200K or less

Harvard University on Monday announced that tuition will be free for students from families with annual incomes of $200,000 or less starting in the 2025-26 academic year. "Putting Harvard within financial reach for more individuals widens the array of backgrounds, experiences, and perspectives...

www.yahoo.com

200k is not a lot of money anymore. Or almost everyone who gets into Harvard is from rich household

This is always a slippery slope. If you are an engineer making 220k/yr, and your kid goes to harvard, then you are looking to take a pay cut.

Or if you have a business with 20M assets but show little income, you should not get free education.

 

[nimbus]

This is always a slippery slope. If you are an engineer making 220k/yr, and your kid goes to harvard, then you are looking to take a pay cut.

Family contribution is likely sliding scale so if you make 220 instead of 200, you’d probably pay a minimal amount.

 

[aneftp]

This is always a slippery slope. If you are an engineer making 220k/yr, and your kid goes to harvard, then you are looking to take a pay cut.

Or if you have a business with 20M assets but show little income, you should not get free education.

https://www.justice.gov/archive/tax/usaopress/2007/txdv07NailSalonManager_Sentenced.pdf

Nail salon owners basically paid themselves minimum salaries while living in luxury home and driving luxury cars.

The trick is to at least meet max payroll taxes as anesthesiologist (govt wants payroll taxes first). That’s one of the real reason large AMC don’t want to pay 1099 because they don’t want to be on the hook for payroll taxes either from the govt. and what many don’t understand the company issuing a 1099 is just as liable if the 1099 payments constitutes what amounts to paying a w2 in terms of wages with set schedules etc.

 

[gaspusher]

Housing market was flat for most of the nation 1990-2000

Flat from 2011-2020 as well

And it’s been pretty flat mid 2022-current (usual 3-% increase. (Assuming so no renovation or distress properties that are flipped)

So only small periods of run up in home prices in the last 35 years meaning unless you purchased distress property, you are barely keeping up with inflation owing a home especially with maintenance costs

Home Price Index (High Tier) for San Francisco, California

Graph and download economic data for Home Price Index (High Tier) for San Francisco, California (SFXRHTSA) from Jan 1987 to Mar 2025 about high tier, San Francisco, HPI, housing, price index, indexes, price, and USA.

fred.stlouisfed.org

You aren't entirely correct, but you are close. A better argument would be if I showed the Case Shiller for the entire US, but frankly I only care about the region I live in (South Bay) because I've trying to buy a house (and well even though we have the funds to I just can't justify it vs renting still).

Yes, the house market was flat from 1990 until 2000. It exploded from 2000 to 2006. Reset from 2007 to 2012 in a once in a lifetime Black Swan event. Then exploded again from 2012 until 2022 with the greatest explosion from 2020 until 2022.

South Florida (where I think you live) is still the most overpriced market in the country and needs a massive reset. The problem with buying now is that, as you said, the market has been flat since mid 2022 and will continue to be flat. Or it can reset itself with another Black Swan event. The odds of another explosion in pricing are minimal to nonexistent. If you bought after mid 2022 without having made substantial equity on your previous property, you essentially made a grave mistake and you will be stuck with the baggage at a high interest rate for years while the market corrects itself.

Buying a house today is not a "bargain". The "bargain" was 2007-2013. The anesthesiologists who bought during this period have the "best" houses in the group because well they got the "best" deal. For some it was good timing and for others it was just dumb luck. For others like me, well we were still in high school lol.

At the best of times housing only increases with inflation, so if you pay more than 3-4% return on investment to the seller, well you are getting a very bad deal. If you have the luxury of waiting, I don't think any prudent person will tell you not to wait because we are clearly in the down phase of the housing cycles.

To address a previous comment about Bay Area housing. It's a mix of trust funds and RSUs. That's who is buying the desirable properties here. 1000/sq foot is becoming norm and 4 million is the new 3 million. Again, with job lay offs, NASDAQ declines, and a uncertainty mixed with a possible Black Swan, the market is primed to decline.

TLDR: We're sitting on the sidelines with close to a 7 figure down payment in a HYSA waiting for a breather to buy a house here.

 

[aneftp]

Home Price Index (High Tier) for San Francisco, California

Graph and download economic data for Home Price Index (High Tier) for San Francisco, California (SFXRHTSA) from Jan 1987 to Mar 2025 about high tier, San Francisco, HPI, housing, price index, indexes, price, and USA.

fred.stlouisfed.org

You aren't entirely correct, but you are close. A better argument would be if I showed the Case Shiller for the entire US, but frankly I only care about the region I live in (South Bay) because I've trying to buy a house (and well even though we have the funds to I just can't justify it vs renting still).

Yes, the house market was flat from 1990 until 2000. It exploded from 2000 to 2006. Reset from 2007 to 2012 in a once in a lifetime Black Swan event. Then exploded again from 2012 until 2022 with the greatest explosion from 2020 until 2022.

South Florida (where I think you live) is still the most overpriced market in the country and needs a massive reset. The problem with buying now is that, as you said, the market has been flat since mid 2022 and will continue to be flat. Or it can reset itself with another Black Swan event. The odds of another explosion in pricing are minimal to nonexistent. If you bought after mid 2022 without having made substantial equity on your previous property, you essentially made a grave mistake and you will be stuck with the baggage at a high interest rate for years while the market corrects itself.

Buying a house today is not a "bargain". The "bargain" was 2007-2013. The anesthesiologists who bought during this period have the "best" houses in the group because well they got the "best" deal. For some it was good timing and for others it was just dumb luck. For others like me, well we were still in high school lol.

At the best of times housing only increases with inflation, so if you pay more than 3-4% return on investment to the seller, well you are getting a very bad deal. If you have the luxury of waiting, I don't think any prudent person will tell you not to wait because we are clearly in the down phase of the housing cycles.

To address a previous comment about Bay Area housing. It's a mix of trust funds and RSUs. That's who is buying the desirable properties here. 1000/sq foot is becoming norm and 4 million is the new 3 million. Again, with job lay offs, NASDAQ declines, and a uncertainty mixed with a possible Black Swan, the market is primed to decline.

TLDR: We're sitting on the sidelines with close to a 7 figure down payment in a HYSA waiting for a breather to buy a house here.

There is a reason I never took the job across from the bay bridge in 2008. Even with falling prices cheaper Walnut Creek still pushing 1 million back in 2008. My buddy condo on 2nd street over 1.3 million. And it was small 1100 sq feet with only one parking space.

I just couldn’t afford to live there unless major compromises

LA area much more affordable unless you are right on the coastal areas.

 

[rowsdower88]

TLDR: We're sitting on the sidelines with close to a 7 figure down payment in a HYSA waiting for a breather to buy a house here.

!!!

That would be a lot for me to have sitting on the sidelines. Where do you park it? Considered municipal bond etfs?

 

[MirrorTodd]

!!!

That would be a lot for me to have sitting on the sidelines. Where do you park it? Municipal bond etf?

I am curious about this too cause HYSA aren’t really all that good. There’s gotta be something better that can consistently get like 6-7% for short term holding (like 1-5 years)

 

[gaspusher]

The family wealth advisor oversees a majority of it. The HYSA we have is 3.8% right now. VUSXX gets us 4.1 last time I checked. It's hard to impossible to get 6-7% with no risk. I don't mind, NASDAQ is -8% YTD. To me the point is not to make money, but hedge against the "what if". I know the only way we are getting the house we want is if the (tech) stock market takes a nosedive at some point. It's a hedge and may or may not work out.

 

[PainInTheAnes]

Home Price Index (High Tier) for San Francisco, California

Graph and download economic data for Home Price Index (High Tier) for San Francisco, California (SFXRHTSA) from Jan 1987 to Mar 2025 about high tier, San Francisco, HPI, housing, price index, indexes, price, and USA.

fred.stlouisfed.org

You aren't entirely correct, but you are close. A better argument would be if I showed the Case Shiller for the entire US, but frankly I only care about the region I live in (South Bay) because I've trying to buy a house (and well even though we have the funds to I just can't justify it vs renting still).

Yes, the house market was flat from 1990 until 2000. It exploded from 2000 to 2006. Reset from 2007 to 2012 in a once in a lifetime Black Swan event. Then exploded again from 2012 until 2022 with the greatest explosion from 2020 until 2022.

South Florida (where I think you live) is still the most overpriced market in the country and needs a massive reset. The problem with buying now is that, as you said, the market has been flat since mid 2022 and will continue to be flat. Or it can reset itself with another Black Swan event. The odds of another explosion in pricing are minimal to nonexistent. If you bought after mid 2022 without having made substantial equity on your previous property, you essentially made a grave mistake and you will be stuck with the baggage at a high interest rate for years while the market corrects itself.

Buying a house today is not a "bargain". The "bargain" was 2007-2013. The anesthesiologists who bought during this period have the "best" houses in the group because well they got the "best" deal. For some it was good timing and for others it was just dumb luck. For others like me, well we were still in high school lol.

At the best of times housing only increases with inflation, so if you pay more than 3-4% return on investment to the seller, well you are getting a very bad deal. If you have the luxury of waiting, I don't think any prudent person will tell you not to wait because we are clearly in the down phase of the housing cycles.

To address a previous comment about Bay Area housing. It's a mix of trust funds and RSUs. That's who is buying the desirable properties here. 1000/sq foot is becoming norm and 4 million is the new 3 million. Again, with job lay offs, NASDAQ declines, and a uncertainty mixed with a possible Black Swan, the market is primed to decline.

TLDR: We're sitting on the sidelines with close to a 7 figure down payment in a HYSA waiting for a breather to buy a house here.

Man that is a tough situation, does neighborhood factor into the cost at all? Like is every area in the Bay Area created equal?

 

[gaspusher]

Some areas are worse than others, but by in large the desirable areas are all bad.

In 2012 they got this house on a fire sale for 2 million.

https://www.realtor.com/realestateandhomes-detail/117-Panorama-Way_Los-Gatos_CA_95032_M11564-52764?from=srp-list-card

Now they are looking to cash out at nearly 7% ROI per year. So not only are you borrowing at 6% mortgage but you are paying them 2x the ROI than the house "deserves'.

There's tons and tons of examples

https://www.realtor.com/realestateandhomes-detail/526-San-Benito-Ave_Los-Gatos_CA_95030_M15946-51550?from=srp-list-card

https://www.realtor.com/realestateandhomes-detail/1676-Grant-Rd_Los-Altos_CA_94024_M16317-05269?from=srp-list-card

https://www.realtor.com/realestateandhomes-detail/19870-Mendelsohn-Ln_Saratoga_CA_95070_M26059-26059?from=srp-list-card

It just follows the same general trend. Houses didn't appreciate from 2007 to 2013 so everyone who bought in that period of time is cashing out big time with loads of equity. Buying into the market now at uber inflated prices and rates is just a recipe for disaster and being house poor. Yet so many 35-50 year tech employees in the area are doing so and living paycheck to paycheck with $15-25,000 a month mortgages because RSUs only go up...

Bottom line, if you bought:

Sitting pretty:
1) Bought 1990-2000 and house is paid off. You have substantial equity.
2) Bought 2007-2013 and refinanced to sub 2.5% in 2020. You have substantial equity and the lowest rates of our lifetimes.

Doing well:
1) Bough 2014-2019 and refinanced to sub 2.5% in 2020. You have equity and the lowest rates of our lifetimes.

Doing ok now finally after years and years of pain:
1) Bought 2000-2006 and held onto your house after years and years of being under water. But at least you could refinance to lower mortgage rates and finally have equity now.

Absolutely abysmal:
1) Anyone in the market now for the first time or if you purchased a house after 2022. Little to no equity and the highest mortgage rates on the block. You are funding everyone else with high taxes (1.2%), high mortgage, and high prices. Yet the millennials keep chasing the dream.

Unless we see another recession/depression/Black Swan, there is no sane way into this housing market.

 

[PainInTheAnes]

Some areas are worse than others, but by in large the desirable areas are all bad.

In 2012 they got this house on a fire sale for 2 million.

https://www.realtor.com/realestateandhomes-detail/117-Panorama-Way_Los-Gatos_CA_95032_M11564-52764?from=srp-list-card

Now they are looking to cash out at nearly 7% ROI per year. So not only are you borrowing at 6% mortgage but you are paying them 2x the ROI than the house "deserves'.

There's tons and tons of examples

https://www.realtor.com/realestateandhomes-detail/526-San-Benito-Ave_Los-Gatos_CA_95030_M15946-51550?from=srp-list-card

https://www.realtor.com/realestateandhomes-detail/1676-Grant-Rd_Los-Altos_CA_94024_M16317-05269?from=srp-list-card

https://www.realtor.com/realestateandhomes-detail/19870-Mendelsohn-Ln_Saratoga_CA_95070_M26059-26059?from=srp-list-card

It just follows the same general trend. Houses didn't appreciate from 2007 to 2013 so everyone who bought in that period of time is cashing out big time with loads of equity. Buying into the market now at uber inflated prices and rates is just a recipe for disaster and being house poor. Yet so many 35-50 year tech employees in the area are doing so and living paycheck to paycheck with $15-25,000 a month mortgages because RSUs only go up...

Bottom line, if you bought:

Sitting pretty:
1) Bought 1990-2000 and house is paid off. You have substantial equity.
2) Bought 2007-2013 and refinanced to sub 2.5% in 2020. You have substantial equity and the lowest rates of our lifetimes.

Doing well:
1) Bough 2014-2019 and refinanced to sub 2.5% in 2020. You have equity and the lowest rates of our lifetimes.

Doing ok now finally after years and years of pain:
1) Bought 2000-2006 and held onto your house after years and years of being under water. But at least you could refinance to lower mortgage rates and finally have equity now.

Absolutely abysmal:
1) Anyone in the market now for the first time or if you purchased a house after 2022. Little to no equity and the highest mortgage rates on the block. You are funding everyone else with high taxes (1.2%), high mortgage, and high prices. Yet the millennials keep chasing the dream.

Unless we see another recession/depression/Black Swan, there is no sane way into this housing market.

I do applaud California for having the most incomprehensibly regressive tax structure I’ve ever seen aside from manhattan itself. Talk about advantaging the incumbents that got lucky, prop 13 is madness. Then taxing w2 income so high also makes it impossible for the younger folks to come in and buy the houses out from these old people.

I cannot imagine what happens when there is a downturn in tech and layoffs start. It would absolutely shatter these people paying 15-20k on their mortgages with no savings. My household can afford to do that and still save but we both work and COL near us is very cheap and we aren’t taxed like these people are.

AI could be the deathknell for California if it ever disrupts white collar tech. But who knows, there’s probably always gonna be rich people who move there to feel like they’ve made it in life after scrimping in the “awful” southeast or Midwest.

The uneven distribution of prosperity in America is a real issue going forward. Megacities cannot sustain 200 million working people, most of whom are service or blue collar.

I mean come on. Los Gatos and San Jose ain’t even that nice. It’s like a giant suburb over an hour away from the cultured bits of the Bay Area. I guess the burritos are good lol

 

[aneftp]

California is a no recourse loan state. People can walk away from homes anytime they want without recourse.

So there is no need to wait to buy a home you want.

Unlike Florida where lenders can go after you.

NBA player walked away from his 1.1 million dollar home in 2010 despite making 10 million just because it was under water.

Because he knows lenders can’t go after him

Rockets' Martin in default of California mortgage

NBA player Kevin Martin has defaulted on mortgage payments on a house in California.

www.espn.com

 

[anonperson]

I do applaud California for having the most incomprehensibly regressive tax structure I’ve ever seen aside from manhattan itself. Talk about advantaging the incumbents that got lucky, prop 13 is madness. Then taxing w2 income so high also makes it impossible for the younger folks to come in and buy the houses out from these old people.

I cannot imagine what happens when there is a downturn in tech and layoffs start. It would absolutely shatter these people paying 15-20k on their mortgages with no savings. My household can afford to do that and still save but we both work and COL near us is very cheap and we aren’t taxed like these people are.

AI could be the deathknell for California if it ever disrupts white collar tech. But who knows, there’s probably always gonna be rich people who move there to feel like they’ve made it in life after scrimping in the “awful” southeast or Midwest.

The uneven distribution of prosperity in America is a real issue going forward. Megacities cannot sustain 200 million working people, most of whom are service or blue collar.

I mean come on. Los Gatos and San Jose ain’t even that nice. It’s like a giant suburb over an hour away from the cultured bits of the Bay Area. I guess the burritos are good lol

What's wrong with prop 13?

One of the most reasonable laws in California.

Don't have to worry about some insane/bogus reassessment resulting in drastic increases in property taxes.

People complaining about it just have sour grapes.

 

[nimbus]

I do applaud California for having the most incomprehensibly regressive tax structure I’ve ever seen aside from manhattan itself. Talk about advantaging the incumbents that got lucky, prop 13 is madness. Then taxing w2 income so high also makes it impossible for the younger folks to come in and buy the houses out from these old people.

I cannot imagine what happens when there is a downturn in tech and layoffs start. It would absolutely shatter these people paying 15-20k on their mortgages with no savings. My household can afford to do that and still save but we both work and COL near us is very cheap and we aren’t taxed like these people are.

AI could be the deathknell for California if it ever disrupts white collar tech. But who knows, there’s probably always gonna be rich people who move there to feel like they’ve made it in life after scrimping in the “awful” southeast or Midwest.

The uneven distribution of prosperity in America is a real issue going forward. Megacities cannot sustain 200 million working people, most of whom are service or blue collar.

I mean come on. Los Gatos and San Jose ain’t even that nice. It’s like a giant suburb over an hour away from the cultured bits of the Bay Area. I guess the burritos are good lol

Burritos are not good in the Bay Area. That is all.

 

[aneftp]

What's wrong with prop 13?

One of the most reasonable laws in California.

Don't have to worry about some insane/bogus reassessment resulting in drastic increases in property taxes.

People complaining about it just have sour grapes.

The big problem with California prop 13 is unlike Florida’s fair homestead and portability laws

California prop 13 allows landlords whose non primary homes retain the same property tax increase protections as a primary home owner. But landlords are allowed to jack up rents despite getting huge property tax savings. This amounts to the rich getting richer. For as much tax revenue as California wants to raise especially to support public schools. Protecting landlords with prop 13 makes zero sense.

In flordia if I buy a second home and keep my other home. Only one home gets the property tax increase protection 3% I think max increase. And I pay full price on the secondary home. I think that’s fair.

So it was made fun many years ago Warren buffet multi million dollar California home in which he only paid $2000’property taxes on and we all know his primary home is in Omaha Nebraska. While his newer neighbors in California likely pay 40k a year in property taxes.

 

[anonperson]

The big problem with California prop 13 is unlike Florida’s fair homestead and portability laws

California prop 13 allows landlords whose non primary homes retain the same property tax increase protections as a primary home owner. But landlords are allowed to jack up rents despite getting huge property tax savings. This amounts to the rich getting richer. For as much tax revenue as California wants to raise especially to support public schools. Protecting landlords with prop 13 makes zero sense.

In flordia if I buy a second home and keep my other home. Only one home gets the property tax increase protection 3% I think max increase. And I pay full price on the secondary home. I think that’s fair.

So it was made fun many years ago Warren buffet multi million dollar California home in which he only paid $2000’property taxes on and we all know his primary home is in Omaha Nebraska. While his newer neighbors in California likely pay 40k a year in property taxes.

Property tax revenue in all of California is well over $90 billion. California does not have a revenue problem, especially a property tax revenue problem.

And landlords cannot indiscriminately jack up rents. Have you ever been a landlord? The market dictates rent and a lot of cities are artificially surpressing rents with rent control laws.

I don't see anyone moaning about that.

Yes, people who bought long ago in California pay less taxes. Why does it bother you so much if some long time resident or landlord gets favorable tax treatment?

California offers no favorable tax treatment for HSAs or for 529 plans. When they get around to offering some tax breaks for that, then you can come after prop 13.

I just don't get the progressive fetish for giving even more money to the government. Politicians are typically dirt bags and have no qualms wasting our money.

 

[ucladoc2b]

Property tax revenue in all of California is well over $90 billion. California does not have a revenue problem, especially a property tax revenue problem.

And landlords cannot indiscriminately jack up rents. Have you ever been a landlord? The market dictates rent and a lot of cities are artificially surpressing rents with rent control laws.

I don't see anyone moaning about that.

Yes, people who bought long ago in California pay less taxes. Why does it bother you so much if some long time resident or landlord gets favorable tax treatment?

California offers no favorable tax treatment for HSAs or for 529 plans. When they get around to offering some tax breaks for that, then you can come after prop 13.

I just don't get the progressive fetish for giving even more money to the government. Politicians are typically dirt bags and have no qualms wasting our money.

It’s created some distorted incentives: stifling (needed) development, NIMBYism, free riding on neighbors much higher payments, reliance on volatile income taxation and budget shortfalls.

 

[PainInTheAnes]

Property tax revenue in all of California is well over $90 billion. California does not have a revenue problem, especially a property tax revenue problem.

And landlords cannot indiscriminately jack up rents. Have you ever been a landlord? The market dictates rent and a lot of cities are artificially surpressing rents with rent control laws.

I don't see anyone moaning about that.

Yes, people who bought long ago in California pay less taxes. Why does it bother you so much if some long time resident or landlord gets favorable tax treatment?

California offers no favorable tax treatment for HSAs or for 529 plans. When they get around to offering some tax breaks for that, then you can come after prop 13.

I just don't get the progressive fetish for giving even more money to the government. Politicians are typically dirt bags and have no qualms wasting our money.

So the criticism I have is philosophical about what the purpose of housing near economic opportunities should be.

I get it, some people got lucky and they should be able to reap the spoils of their luck. We do the same with our intelligence, our investments, or our life circumstances.

However, the problem arises when people who have no need for the houses they buy hold on to them indefinitely. What good is a 4 bedroom house worth 4 million to a 75 year old couple living alone? While a new family is pushed out of California because the property taxes are 5-10x higher for the house next door?

Not only does it increase the cost for new families, it creates an inheritance system that perpetuates wealth in vacant houses over time if people move from them.

Society should be making advantages for young people with new families or moving to new areas for jobs. California believes that retirees above all are the most important class in the state. Worst example in the country of the theft of prosperity from the young given to the old.

 

[PainInTheAnes]

What's wrong with prop 13?

One of the most reasonable laws in California.

Don't have to worry about some insane/bogus reassessment resulting in drastic increases in property taxes.

People complaining about it just have sour grapes.

What is bogus about reassessing a property that is worth 10x what it was 30 years ago?

 

[anonperson]

What is bogus about reassessing a property that is worth 10x what it was 30 years ago?

So because my house gets highly appraised by some doofus government official I am forced to pay even more on a yearly basis. Sure is working out for Illinois residents who can get priced out of their houses and deal with massively fluctuating tax costs.

Growing out of control: Property taxes put increasing burden on Illinois taxpayers

Property taxes are the single largest tax in Illinois, burdening residents far more than either income or sales taxes. Illinoisans already know they pay high property taxes. But what is not as well known is that property taxes are outpacing residents’ ability to pay for them. Over the past 50...

www.illinoispolicy.org

 

[ucladoc2b]

L

So because my house gets highly appraised by some doofus government official I am forced to pay even more on a yearly basis. Sure is working out for Illinois residents who can get priced out of their houses and deal with massively fluctuating tax costs.

Growing out of control: Property taxes put increasing burden on Illinois taxpayers

Property taxes are the single largest tax in Illinois, burdening residents far more than either income or sales taxes. Illinoisans already know they pay high property taxes. But what is not as well known is that property taxes are outpacing residents’ ability to pay for them. Over the past 50...

www.illinoispolicy.org

Same reason your income taxes go up with higher income.

 

[anonperson]

So the criticism I have is philosophical about what the purpose of housing near economic opportunities should be.

I get it, some people got lucky and they should be able to reap the spoils of their luck. We do the same with our intelligence, our investments, or our life circumstances.

However, the problem arises when people who have no need for the houses they buy hold on to them indefinitely. What good is a 4 bedroom house worth 4 million to a 75 year old couple living alone? While a new family is pushed out of California because the property taxes are 5-10x higher for the house next door?

Not only does it increase the cost for new families, it creates an inheritance system that perpetuates wealth in vacant houses over time if people move from them.

Society should be making advantages for young people with new families or moving to new areas for jobs. California believes that retirees above all are the most important class in the state. Worst example in the country of the theft of prosperity from the young given to the old.

Again, why do you care if a retired couple lives in a big house that they likely paid market value for years ago. They spent years raising a family, building a community, and developing a social network. I don't think it's right to price them out because of some people think they aren't paying their fair share.

Its sour grapes.

Besides, houses can no longer pass to heirs without getting reassesses unless certain circumstances are fulfilled so the taxes will automatically increase.

No one is entitled to live in any specific area just because. I live in Southern California but I lived in a place within my means.

Besides, there are liberals who claim taxes don't push people out of California. I know at least one poster who made that very argument that taxes aren't the reason people don't live in California. So which is it?

Housing costs are high because space is finite and demand is essentially infinite. This will not change.

And housing costs are especially high because people want to live in single family homes, not the dystopian high rise high density monstrosities liberals are trying to push.

 

[anonperson]

It’s created some distorted incentives: stifling (needed) development, NIMBYism, free riding on neighbors much higher payments, reliance on volatile income taxation and budget shortfalls.

The California legislature made their choice. They wanted a higher income tax rate and bent with property taxes. They can't have it both ways. If they want to uncap property taxes, then kill the state income tax, then I would consider it.

And yes, I'm proudly NIMBY. Goofball progressive keep trying to use it as some pejorative.

Regardless, I keep saying, California does not have a revenue problem. Total tax revenue has been fine. There is a spending problem.

Why has the state budget more than doubled from Jerry Brown to Newsom? Dummy politicians increasing handouts, pensions etc.

 

[UscGhost]

Again, why do you care if a retired couple lives in a big house that they likely paid market value for years ago. They spent years raising a family, building a community, and developing a social network. I don't think it's right to price them out because of some people think they aren't paying their fair share.

Its sour grapes.

Besides, houses can no longer pass to heirs without getting reassesses unless certain circumstances are fulfilled so the taxes will automatically increase.

No one is entitled to live in any specific area just because. I live in Southern California but I lived in a place within my means.

Besides, there are liberals who claim taxes don't push people out of California. I know at least one poster who made that very argument that taxes aren't the reason people don't live in California. So which is it?

Housing costs are high because space is finite and demand is essentially infinite. This will not change.

And housing costs are especially high because people want to live in single family homes, not the dystopian high rise high density monstrosities liberals are trying to push.

Taxes don't push people out. It's housing costs

 

[PainInTheAnes]

So because my house gets highly appraised by some doofus government official I am forced to pay even more on a yearly basis. Sure is working out for Illinois residents who can get priced out of their houses and deal with massively fluctuating tax costs.

Growing out of control: Property taxes put increasing burden on Illinois taxpayers

Property taxes are the single largest tax in Illinois, burdening residents far more than either income or sales taxes. Illinoisans already know they pay high property taxes. But what is not as well known is that property taxes are outpacing residents’ ability to pay for them. Over the past 50...

www.illinoispolicy.org

I mean this is one way to try and govern, but it’s going to make winning elections exceedingly difficult for liberals in the future.

Look at the upcoming reapportionment in 2030. People are fleeing liberal governance in droves because of crap like this.

Why would any physician be motivated to move to California beyond the weather? There’s plenty of culture and food in Texas, Florida, and large cities like Nashville and salt lake.

The reason we should push out people who can’t afford property taxes is because they aren’t using the house to generate enough economic benefit for the area they’re in. Property taxes exist to keep you from free riding utilities, roads, and economic development to shut out younger people who want to contribute. You can’t pay it? Sell it to someone who can and ride off into the sunset on a cheap beach in Mexico or Louisiana. The winnings from the windfall will more than cover it

You can be a NIMBY all you want, but California has explicitly gone after the economic contributors in its state with prop 13 and it’s income tax. People are voting with their feet and moving places with plenty of ability to build new things near economically active areas.

 

[PainInTheAnes]

Again, why do you care if a retired couple lives in a big house that they likely paid market value for years ago. They spent years raising a family, building a community, and developing a social network. I don't think it's right to price them out because of some people think they aren't paying their fair share.

Its sour grapes.

Besides, houses can no longer pass to heirs without getting reassesses unless certain circumstances are fulfilled so the taxes will automatically increase.

No one is entitled to live in any specific area just because. I live in Southern California but I lived in a place within my means.

Besides, there are liberals who claim taxes don't push people out of California. I know at least one poster who made that very argument that taxes aren't the reason people don't live in California. So which is it?

Housing costs are high because space is finite and demand is essentially infinite. This will not change.

And housing costs are especially high because people want to live in single family homes, not the dystopian high rise high density monstrosities liberals are trying to push.

I don't think this is sour grapes, it's a criticism of liberal governance and tax structures. I never particularly desired to move to California because it's away from my family, but I know a lot of people who have left there (very successful people) because they can't deal with daily life in the cities due to the governance and small living spaces.

Illinois is its own kind of thing. High income taxes + property taxes in areas that no one truly desires to live except for the progressive values that are in Chicago. The weather isn't a draw, so Illinois is losing a lot of population to neighboring states because it comes out in the wash due to the taxes and cost of living. If Lake Michigan was temperate Chicago would be the same as Los Angeles in its problems.

 

[ucladoc2b]

The California legislature made their choice. They wanted a higher income tax rate and bent with property taxes. They can't have it both ways. If they want to uncap property taxes, then kill the state income tax, then I would consider it.

And yes, I'm proudly NIMBY. Goofball progressive keep trying to use it as some pejorative.

Regardless, I keep saying, California does not have a revenue problem. Total tax revenue has been fine. There is a spending problem.

Why has the state budget more than doubled from Jerry Brown to Newsom? Dummy politicians increasing handouts, pensions etc.

Much more complicated then that.

Prop 13 was voter passed.

Most of the spending issues you cite were voter approved initiatives without a revenue attached. Hence, they are stuck with volatile income and corporate taxes.

 

[anonperson]

Taxes don't push people out. It's housing costs

If you think repealing prop 13 and allowing unrestricted increases in property taxes will somehow cause housing costs to decrease, you are living in a clown world.

All that will happen is government revenue/spending will explode.

"Just one more tax and we promise life will be even better bro!"

 

[anonperson]

I mean this is one way to try and govern, but it’s going to make winning elections exceedingly difficult for liberals in the future.

Look at the upcoming reapportionment in 2030. People are fleeing liberal governance in droves because of crap like this.

Why would any physician be motivated to move to California beyond the weather? There’s plenty of culture and food in Texas, Florida, and large cities like Nashville and salt lake.

The reason we should push out people who can’t afford property taxes is because they aren’t using the house to generate enough economic benefit for the area they’re in. Property taxes exist to keep you from free riding utilities, roads, and economic development to shut out younger people who want to contribute. You can’t pay it? Sell it to someone who can and ride off into the sunset on a cheap beach in Mexico or Louisiana. The winnings from the windfall will more than cover it

You can be a NIMBY all you want, but California has explicitly gone after the economic contributors in its state with prop 13 and it’s income tax. People are voting with their feet and moving places with plenty of ability to build new things near economically active areas.

Why should my retired future self or any current retiree be stuck with a higher tax burden and be forced to cash out to Mexico or Louisiana? Basically to places they likely have no connection to other than the cheap.

Insanity.

Thankfully prop 13 is the third rail of California politics.

 

[anonperson]

Much more complicated then that.

Prop 13 was voter passed.

Most of the spending issues you cite were voter approved initiatives without a revenue attached. Hence, they are stuck with volatile income and corporate taxes.

There is a significant amount of waste and outright lying to the voters.

High speed rail was supposed to cost $33 billion and already be done. Of course that was an outright lie.

Healthcare for illegal immigrants for any age is already blowing the budget and the original estimates were completely off.

Newsom cannot account for $24 billion of state money that was supposed to be spent on homelessness.

The list goes on.

The public is just some unending piggy and there are still some braindead people willing to open up their wallet when the government comes back with another tax.

"Just one more tax and your life will be great!"

 

[PainInTheAnes]

Why should my retired future self or any current retiree be stuck with a higher tax burden and be forced to cash out to Mexico or Louisiana? Basically to places they likely have no connection to other than the cheap.

Insanity.

Thankfully prop 13 is the third rail of California politics.

Hey why tax the property at all right? Shouldn’t the original families just be allowed to accumulate empires over time as long as property values keep rising? It works great in London.

Again cali can govern how they want, but no one else in the country wants things set up that way

 

[VA Hopeful Dr]

L

Same reason your income taxes go up with higher income.

That's not at all the same. When your income goes up you by definition have more money.

If your house gets reappraised and is now worth 350k more than it was 10 years ago, you don't get that 350k unless you sell the house.

 

[anonperson]

Hey why tax the property at all right? Shouldn’t the original families just be allowed to accumulate empires over time as long as property values keep rising? It works great in London.

Again cali can govern how they want, but no one else in the country wants things set up that way

What are you talking about?

I argued for keeping property taxes in check which is what prop 13 does. Prevents drastic fluctuations so homeowners know their true yearly costs to live in a home.

Actually several states are trying to reign in drastic property tax increases so please try again.

With home prices up more than 50%, some states try to contain property taxes

Rising home values have led to higher real estate taxes around the U.S. Now many states are looking to provide relief to frustrated residents.

apnews.com

You might as well start taxing unrealized gains on people's stock investments.

 

[anonperson]

L

Same reason your income taxes go up with higher income.

But I have actual cash to pay the tax. With property taxes, I don't.

You might as well also tax unrealized gains on investments as well.

 

[aneftp]

So the state really pays the school district teacher salaries and not the local counties with prop 13?

Because property tax is uneven in its collections? I know there was a Supreme Court case with that equal rights clause 14th amendment regarding California prop 13?

Much more complicated than that.

Prop 13 was voter passed.

Most of the spending issues you cite were voter approved initiatives without a revenue attached. Hence, they are stuck with volatile income and corporate taxes.

What are you talking about?

I argued for keeping property taxes in check which is what prop 13 does. Prevents drastic fluctuations so homeowners know their true yearly costs to live in a home.

Actually several states are trying to reign in drastic property tax increases so please try again.

With home prices up more than 50%, some states try to contain property taxes

Rising home values have led to higher real estate taxes around the U.S. Now many states are looking to provide relief to frustrated residents.

apnews.com

You might as well start taxing unrealized gains on people's stock investments.

The issue isn’t limiting property taxes for primary owners. It’s letting landlords hoard property limiting their property taxes.

Anyways. California is a house of cards which has to keep reinventing more ways to generate revenue. And prop 13 is considered one of the untouchable laws now that won’t ever be repealed

So they gonna make up more bs stuff like prop 30 to raise more revenues.

 

[PainInTheAnes]

What are you talking about?

I argued for keeping property taxes in check which is what prop 13 does. Prevents drastic fluctuations so homeowners know their true yearly costs to live in a home.

Actually several states are trying to reign in drastic property tax increases so please try again.

With home prices up more than 50%, some states try to contain property taxes

Rising home values have led to higher real estate taxes around the U.S. Now many states are looking to provide relief to frustrated residents.

apnews.com

You might as well start taxing unrealized gains on people's stock investments.

The difference is that stocks are ephemeral and don't influence the livelihoods of people who make the cities what they are.

Housing is not a stock ticker. It's a good that the public needs to make the economy work. Just because it's possible to own it all and keep it from people doesn't mean that it's equivalent to other investments. There are other interested parties as opposed to the stock market.

Don't forget, your tax assessments can go down too. I'd like to see the adjustment downward if home prices fall too. And who says the government has to determine the value of people's houses? Do it every 3 years, and go by the rise of the median home price in the area. That data is publicly available.

If Elon hoards all the TSLA stock it affects me not at all. If he hoards half of LA's real estate it affects millions of people.

 

[ucladoc2b]

But I have actual cash to pay the tax. With property taxes, I don't.

You might as well also tax unrealized gains on investments as well.

Counter point. Prop 13 allows free-riding on the costs that allow that asset to gain >7%. Most places, the increase costs will encourage appropriate development and shared tax burden. Go and try to get permits for new development (very difficult and expensive) in CA. Even new housing is unaffordable for this reason. Big reason the state has a high homeless population.

 

[anonperson]

Counter point. Prop 13 allows free-riding on the costs that allow that asset to gain >7%. Most places, the increase costs will encourage appropriate development and shared tax burden. Go and try to get permits for new development (very difficult and expensive) in CA. Even new housing is unaffordable for this reason. Big reason the state has a high homeless population.

Development is difficult in California for the following reasons:

CEQA- Another example of government officials being idiotic and not thinking about future consequences. I sense a pattern...

Somehow now, no one cares about environmental impact.

And Democrats have had a super majority for over a decade. They could have made changes at any point.

Zoning laws- A lot of cities are majority zoned for single family homes. This is the ideal for most people but this offends the sensibilities of progressives who are trying to push more dense housing. They want to push apartments etc in neighborhoods with single family homes.

Why would I, as a homeowner in a single family neighborhood, want to suddenly live next to a 4 Plex or worse. And then have to deal with worse trash, crime, parking issues, etc. I would fight that tooth and nail.

 

[anonperson]

So the state really pays the school district teacher salaries and not the local counties with prop 13?

Because property tax is uneven in its collections? I know there was a Supreme Court case with that equal rights clause 14th amendment regarding California prop 13?



The issue isn’t limiting property taxes for primary owners. It’s letting landlords hoard property limiting their property taxes.

Anyways. California is a house of cards which has to keep reinventing more ways to generate revenue. And prop 13 is considered one of the untouchable laws now that won’t ever be repealed

So they gonna make up more bs stuff like prop 30 to raise more revenues.

You keep buying the premise that California needs more revenue.

I promise you that isn't the case. Politicians keep wasting money on numerous projects.