Amazon drops plans to add headquarters in New York City

[ET180]

Absolutely correct. I know of several people who have left NY in the past few years because it has become increasingly punishing for taxpayers.

One guy was paying property tax of more than $20k on his 2,000 square foot house. Another guy owned commercial property where the property taxes almost equaled his rent roll!

It'll be fun to watch what happens when millennial Ocasio-Cortez's Green New Deal comes to pass.

Many states are like that. I know someone who bought a house in California. After purchasing the house, the property tax "resets" to market value. Previous people living there paid something like $4000 per year in property taxes. But once the purchase was made, taxes reassessed to something like $26,000 per year. This has two effects:

1. People that just moved to the area grossly subsidize those who have been there for a while.
2. People are disincentivized from selling. Since the cost of ownership for someone who has lived there a while is relatively so low, they are better off never selling and just renting the property out.

The counter-argument is that if people actually had to pay taxes proportional to the home's market value, people who have been there a while could be forced to move. I say, so what. That means that their property has greatly appreciated and they can use the proceeds to buy a new home somewhere else. To argue otherwise is to claim that some people should subsidize others not in regards to fairness, but simply based on how long they have lived at an address. Makes no sense.

 

[ET180]

Since I grew up there 30 years ago! Looks like since around 1933 based on more empirical data (https://en.wikipedia.org/wiki/Political_party_strength_in_Washington_(state)) The east side of the state is definitely farm country conservative but since only a couple dozen people live over there and we base these things on 1 vote per person the state has been blue for a long time.
I am surprised they lasted this long without an income tax. It was nice during my time in the military because you get to keep your home state and mine didn't have income tax, but I also didn't get hit with the commiserate other taxes that are necessary to generate the baseline revenue you need to operate any state so I got the best of both worlds.

From the 70s until late 80s, the state looked more red than blue. Also surprised that they lasted this long without an income tax given how far left Seattle has become. Maybe income tax has become unpopular in general. I think Seattle tried to introduce an income tax for the city last year or year before. They will probably try to introduce it by having only people earning above $200,000 pay it. Then of course, the limit will be lowered as it always does. I would bet that it will become the next state to adopt an income tax. Last will be Wyoming.

 

[R1234]

Many states are like that. I know someone who bought a house in California. After purchasing the house, the property tax "resets" to market value. Previous people living there paid something like $4000 per year in property taxes. But once the purchase was made, taxes reassessed to something like $26,000 per year. This has two effects:

1. People that just moved to the area grossly subsidize those who have been there for a while.
2. People are disincentivized from selling. Since the cost of ownership for someone who has lived there a while is relatively so low, they are better off never selling and just renting the property out.

The counter-argument is that if people actually had to pay taxes proportional to the home's market value, people who have been there a while could be forced to move. I say, so what. That means that their property has greatly appreciated and they can use the proceeds to buy a new home somewhere else. To argue otherwise is to claim that some people should subsidize others not in regards to fairness, but simply based on how long they have lived at an address. Makes no sense.

Where I live (a suburb of NYC) it is different from CA in that property taxes do not reset only during the sale of a home. They are re-assessed on a yearly basis. In this particular case - the guy who sold and moved out of state - he was paying just over $20k in property tax on his house that was worth about $650k.

Because of the lack of a homestead exemption, retirees all too frequently need to move away otherwise the bulk of their social security check would go toward paying property tax.

 

[fan27]

Florida property taxes combined with the property insurance ain't cheaper. Anyway Florida needs all those yankee's to outnumber rednecks

I live in a 4 br 2.5 bath home with a pool in a decent neighborhood in Tampa, FL and pay $1750 for mortgage/taxes/insurance. I doubt you would find anything in the North East close to a good job market for that sort of value.

 

[ET180]

Look at Amazon's 2018 quarterly SEC filings. They've posted a profit now for something like 15 straight quarters. They can afford to break even on e-commerce, hemorrhage money overseas and they have consistently beat earnings in 2018. Web services and cloud computing - which they started as a side business, has been wildly profitable. If your intent is to hollow out WalMart - you operate at a break-even pace. You get the globe hooked on Amazon Prime.

Not sure if Walmart is getting hallowed out. Their stock seems to be holding up ok.

 

[ET180]

On a percentage basis Florida property tax is on high side.

That's probably true, but aren't houses there dirt cheap? Similar to Texas? I've seen some homes in Texas where the property taxes might be considered high relative to the market value of the home, but compare taxes to what that house would cost in San Jose, California and they are still cheap. I would expect property taxes to be higher in Texas or Florida compared to say, Oregon or California because those states have high income taxes for revenue.

 

[srinir]

I live in a 4 br 2.5 bath home with a pool in a decent neighborhood in Tampa, FL and pay $1750 for mortgage/taxes/insurance. I doubt you would find anything in the North East close to a good job market for that sort of value.

It is better to calculate based on the percentage basis for a marginal new buyer. Original OP's assessed value of the property is closer to million dollars. Million dollar home here probably pays taxes more than that amount here. I have several properties in different counties, almost all of them have property taxes 2% per year (millage of 20 or more). It works out to be 20k. My home owner insurance is more than 5k for similarly assessed home. Most of the good property insurance companies are fleeing florida.

Also, I am not getting close to quality of public schools in the NYC or their suburbs area. If kids go to private schools, you need to add all those costs.

 

[srinir]

That's probably true, but aren't houses there dirt cheap? Similar to Texas? I've seen some homes in Texas where the property taxes might be considered high relative to the market value of the home, but compare taxes to what that house would cost in San Jose, California and they are still cheap. I would expect property taxes to be higher in Texas or Florida compared to say, Oregon or California because those states have high income taxes for revenue.

I was just replying to 20k for 2000 sqft area home comment.

If you are comparing to SF or bay area, then it is cheaper any where in the country. Starting salaries are also much higher in SF or bay area. People adjust their size of the home based on affordability and school district by far the most. If worker in working in bay area moves to Austin, he would choose higher square foot area house in atleast similar school district of previous location. Property tax in dollar terms may not go down a lot. His income probably will be lesser

Houses are not dirt cheap in good area. In Orlando area where @Barron lives (Dr. Phillips) is not dirt cheap, Winter park in Orlando is not dirt cheap. Median house is probably more than $500k and there is no high paying industry here.

Yeah, overall your assessment of NY, CA is probably higher taxed state is true. But again, you are not getting Bay area or NYC type of jobs here in Florida.

 

[Sig]

From the 70s until late 80s, the state looked more red than blue. Also surprised that they lasted this long without an income tax given how far left Seattle has become. Maybe income tax has become unpopular in general. I think Seattle tried to introduce an income tax for the city last year or year before. They will probably try to introduce it by having only people earning above $200,000 pay it. Then of course, the limit will be lowered as it always does. I would bet that it will become the next state to adopt an income tax. Last will be Wyoming.

I'd challenge you on how you're thinking about causation, especially in the case of WA. It will probably institute an income tax, but not because it's become more liberal. Instead it's become more liberal because from the 70's on Boeing, MSFT, and Amazon have brought a synergy based economy to the state. There's a simple reason that blue states produce 2/3 of the nations GDP - since Hobbes we've known that socializing the cost of infrastructure, education, public services, and preventing externalities like pollution is more efficient than the fierce individualist caveman model. That's indisputable. Blue states do more of that than red states, hence they produce more of the country's GDP. That requires higher public spending. So yes, WA will institute a tax at some point because they've built a booming economy based on socializing costs. It was their synergistic economy with efficiently socialized costs that made them liberal, it's what works, not them being liberal that made them want to raise taxes.

You may be surprised on Wyoming. My dad, a dyed in the wool conservative, was just grousing to me that Alaska needs to institute an income tax on all income earned in the state, including his. Apparently the state's residents are a little peeved at all the seasonal or short-term oil and fisheries workers from "outside" who come in and earn a good chunk of the income in the state and almost all of it goes back to the lower 48. I'm imagining that Wyoming might have some of the same thing. Absent the oil thing though I would tend to agree, Wyoming won't need an income tax because they have an agrarian economy that doesn't benefit nearly as much as Washington's does from socializing costs for infrastructure, education, public service....and won't ever have a high GDP economy absent the extraction lottery they won.

 

[speedo]

That's probably true, but aren't houses there dirt cheap? Similar to Texas? I've seen some homes in Texas where the property taxes might be considered high relative to the market value of the home, but compare taxes to what that house would cost in San Jose, California and they are still cheap. I would expect property taxes to be higher in Texas or Florida compared to say, Oregon or California because those states have high income taxes for revenue.

Property values have gone way up in Dallas and Austin. You could probably still get a house reasonably priced in Abilene or Odessa if for some strange reason you wanted to live there.