Big businesses want to be taxed as if they weren't open
September 12, 2016 1:43 PM Subscribe
Marquette Township, a small community adjacent to the larger city of Marquette, is in the unique position of having a handful of big-box chain stores. But recently, the township suffered a dramatic drop in its property tax revenue. It had to cut back on spending, trim employee benefits and reduce library hours. The impact has reached up to surrounding Marquette County, which earlier this year closed a youth home to save money. The reason for the lost revenue isn’t declining consumer demand. It’s a series of rulings by the Michigan Tax Tribunal that have allowed large retailers to reduce their property tax assessments, in many cases by as much as half.
The argument goes something like this: Big box stores are a unique use of real estate. If the holder vacates the property, that leaves a big empty box that can be hard to fill, and may become a troublesome spot. Empty stores, that have been vacated, are actually “dark,” and nobody wants those since they fail to provide revenue, jobs, or anything else of use.
Chains have successfully used the argument to get their taxes reduced in Indiana, Florida, North Carolina, Alabama, and Michigan. Michigan in particular has been hard hit, the Dallas Morning News notes, with stores like Home Depot, Lowe’s, Target, and others managing to get big-box store value assessments collectively dropped by $75 million.
Jef Muelver, who has worked as an assessor for more than 20 years in about a half-dozen Wisconsin counties, said tax lawyers will cold-call businesses and offer their services for free, unless they win in court. But there's always an expense for the local government. Legal fees might run over $100,000 to defend one case, Muelver said. Tax lawyers are so proactive that sometimes, Muelver said, they will call him on behalf of a property before even contacting the owner, trying to feel him out and gauge the situation.
A 30-minute-long documentary focusing on Michigan's "dark store" tax theory was made by Northern Michigan University Professor of Communications Dwight Brady and some of his students. The documentary was screened at Bay College on August 31, and on WMNU-TV September 1. The entire documentary is available for viewing here.
The argument goes something like this: Big box stores are a unique use of real estate. If the holder vacates the property, that leaves a big empty box that can be hard to fill, and may become a troublesome spot. Empty stores, that have been vacated, are actually “dark,” and nobody wants those since they fail to provide revenue, jobs, or anything else of use.
Chains have successfully used the argument to get their taxes reduced in Indiana, Florida, North Carolina, Alabama, and Michigan. Michigan in particular has been hard hit, the Dallas Morning News notes, with stores like Home Depot, Lowe’s, Target, and others managing to get big-box store value assessments collectively dropped by $75 million.
Jef Muelver, who has worked as an assessor for more than 20 years in about a half-dozen Wisconsin counties, said tax lawyers will cold-call businesses and offer their services for free, unless they win in court. But there's always an expense for the local government. Legal fees might run over $100,000 to defend one case, Muelver said. Tax lawyers are so proactive that sometimes, Muelver said, they will call him on behalf of a property before even contacting the owner, trying to feel him out and gauge the situation.
A 30-minute-long documentary focusing on Michigan's "dark store" tax theory was made by Northern Michigan University Professor of Communications Dwight Brady and some of his students. The documentary was screened at Bay College on August 31, and on WMNU-TV September 1. The entire documentary is available for viewing here.
I saw an article on this pop up this morning, and I still haven't figured out how the argument is supposed to go.
1. Big Box stores are hard to re-occupy.
2. Closed stores don't earn tax revenue & jobs.
...
Thus Big Box stores shouldn't have to pay taxes? (aka Profit!)
I look forward to the reuse of this argument in many other spheres. "Human bodies are hard to re-occupy. Dead bodies don't pay taxes. Thus, I should only be taxed as much as if I were dead!"
posted by CrystalDave at 2:05 PM on September 12, 2016 [18 favorites]
1. Big Box stores are hard to re-occupy.
2. Closed stores don't earn tax revenue & jobs.
...
Thus Big Box stores shouldn't have to pay taxes? (aka Profit!)
I look forward to the reuse of this argument in many other spheres. "Human bodies are hard to re-occupy. Dead bodies don't pay taxes. Thus, I should only be taxed as much as if I were dead!"
posted by CrystalDave at 2:05 PM on September 12, 2016 [18 favorites]
Obviously that's an argument for increasing property taxes on vacant lots to higher than the current taxation for commercial lots.
posted by jeather at 2:06 PM on September 12, 2016 [27 favorites]
posted by jeather at 2:06 PM on September 12, 2016 [27 favorites]
I've always wondered why we tax property defined by the geographic land boundaries but based heavily upon the improvements made to it, rather than taxing the land based on the "highest use" value. I'm sure there are economic arguments for this, and certainly there are sentimental ones (otherwise a 100 acre farm would be taxed the same as the 20 adjacent 5 acre high end housing lots). But, I wonder if we wouldn't be better off with a "best use" plus discounts for specific uses regarded as being for some public good, such as agriculture, forestry, permanently conserved parkland, etc. rather than a system which essentially says "don't make improvements to the outside of your house or your taxes will go up" writ large.
posted by meinvt at 2:09 PM on September 12, 2016 [3 favorites]
posted by meinvt at 2:09 PM on September 12, 2016 [3 favorites]
1. Big Box stores are hard to re-occupy.
2. Closed stores don’t earn tax revenue & jobs.
…
Thus Big Box stores shouldn't have to pay taxes? (aka Profit!)
More like “closed big box stores are more expensive to replace than closed smaller stores”
posted by Going To Maine at 2:09 PM on September 12, 2016
2. Closed stores don’t earn tax revenue & jobs.
…
Thus Big Box stores shouldn't have to pay taxes? (aka Profit!)
More like “closed big box stores are more expensive to replace than closed smaller stores”
posted by Going To Maine at 2:09 PM on September 12, 2016
"Human bodies are hard to re-occupy. Dead bodies don't pay taxes. Thus, I should only be taxed as much as if I were dead!"
Step 1 to any negotiation based on comparables is to find a comparable that supports your argument. Step two for the opposing side is to point out what they're not comparable at all. This is every real estate transaction I've ever been involved it (which is admittedly only a few)
posted by GuyZero at 2:10 PM on September 12, 2016 [1 favorite]
Step 1 to any negotiation based on comparables is to find a comparable that supports your argument. Step two for the opposing side is to point out what they're not comparable at all. This is every real estate transaction I've ever been involved it (which is admittedly only a few)
posted by GuyZero at 2:10 PM on September 12, 2016 [1 favorite]
Property taxes at the local level are a stupid idea to begin with. School districts vary in quality, poor cities get fucked on tax revenue. Take it out of the hands of local governance. Do it all through the state. Block grant some of it back to the city/county with revenue equalization for roads and trash (where applicable). Bring public education to the state level.
posted by Talez at 2:16 PM on September 12, 2016 [4 favorites]
posted by Talez at 2:16 PM on September 12, 2016 [4 favorites]
Bring public education to the state level.
In Ontario this led to 100 year-old public schools being given the same per-student funding that suburban school build 5 years ago were getting. There are some cons to your argument.
posted by GuyZero at 2:24 PM on September 12, 2016 [1 favorite]
In Ontario this led to 100 year-old public schools being given the same per-student funding that suburban school build 5 years ago were getting. There are some cons to your argument.
posted by GuyZero at 2:24 PM on September 12, 2016 [1 favorite]
Just because Ontario screwed it up does not mean that funding education over an entire province/state instead of by municipality is a bad idea.
posted by jeather at 2:30 PM on September 12, 2016 [12 favorites]
posted by jeather at 2:30 PM on September 12, 2016 [12 favorites]
Block grant some of it back to the city/county with revenue equalization for roads and trash (where applicable).
We do that in Virginia with our income taxes and the result is that the state politicians tweak the redistribution formula to favor one part of the state or the other depending on which way the wind is blowing so some localities are flush with cash (relative to student population) and others struggle to balance their budgets. And then after a few years the money shifts again and it's the same story in a different place.
posted by mattamatic at 2:33 PM on September 12, 2016 [3 favorites]
We do that in Virginia with our income taxes and the result is that the state politicians tweak the redistribution formula to favor one part of the state or the other depending on which way the wind is blowing so some localities are flush with cash (relative to student population) and others struggle to balance their budgets. And then after a few years the money shifts again and it's the same story in a different place.
posted by mattamatic at 2:33 PM on September 12, 2016 [3 favorites]
I'm not saying it's an absolutely bad idea, I'm saying higher-level funding has pros and cons.
posted by GuyZero at 2:33 PM on September 12, 2016
posted by GuyZero at 2:33 PM on September 12, 2016
1. Big Box stores are hard to re-occupy.
2. Closed stores don't earn tax revenue & jobs.
...
Thus Big Box stores shouldn't have to pay taxes? (aka Profit!)
That doesn't seem to be the argument, as I read the linked story. It's something more like:
1, Property tax is based on the value of the property
2. The value of the property should be defined according to the price it would bring if it were up for sale, not how much it cost to build it or how much revenue it generates when operating
Thus, Big Box stores that have been taxed on the basis of one of the latter evaluations in step two have been over-taxed, because those are typically higher than the value of the property on the open market
posted by layceepee at 2:37 PM on September 12, 2016 [9 favorites]
2. Closed stores don't earn tax revenue & jobs.
...
Thus Big Box stores shouldn't have to pay taxes? (aka Profit!)
That doesn't seem to be the argument, as I read the linked story. It's something more like:
1, Property tax is based on the value of the property
2. The value of the property should be defined according to the price it would bring if it were up for sale, not how much it cost to build it or how much revenue it generates when operating
Thus, Big Box stores that have been taxed on the basis of one of the latter evaluations in step two have been over-taxed, because those are typically higher than the value of the property on the open market
posted by layceepee at 2:37 PM on September 12, 2016 [9 favorites]
Obviously that's an argument for increasing property taxes on vacant lots to higher than the current taxation for commercial lots.
I'm sure there are downsides, but I am so irritated by the proliferation of vacant commercial properties in high-population-density, otherwise thriving parts of my city (and the related phenomenon of successful local businesses being evicted because the landlord wants to triple the rent and thinks maybe someone might pay it) that I would be all for massively bumping the property tax to a commercial property that has been vacant for longer than a year. Empty storefronts, vacant strip malls, and abandoned box stores make public spaces worse and the companies who own those spaces should pay for it and be encouraged as strongly as possible to keep tenants and fill empty properties instead of letting them languish for years on end.
posted by Copronymus at 2:46 PM on September 12, 2016 [41 favorites]
I'm sure there are downsides, but I am so irritated by the proliferation of vacant commercial properties in high-population-density, otherwise thriving parts of my city (and the related phenomenon of successful local businesses being evicted because the landlord wants to triple the rent and thinks maybe someone might pay it) that I would be all for massively bumping the property tax to a commercial property that has been vacant for longer than a year. Empty storefronts, vacant strip malls, and abandoned box stores make public spaces worse and the companies who own those spaces should pay for it and be encouraged as strongly as possible to keep tenants and fill empty properties instead of letting them languish for years on end.
posted by Copronymus at 2:46 PM on September 12, 2016 [41 favorites]
In Ontario this led to 100 year-old public schools being given the same per-student funding that suburban school build 5 years ago were getting
Key phrase here being "per student", which is where the formula goes wrong, not the block granting at the state/province level. The difference between fixed and variable costs are well understood by anyone in management and anyone saying that funding should be straightforwardly per student is demonstrating insufficient understanding of basic fucking budgeting that they may be safely ignored.
posted by fatbird at 2:51 PM on September 12, 2016 [6 favorites]
Key phrase here being "per student", which is where the formula goes wrong, not the block granting at the state/province level. The difference between fixed and variable costs are well understood by anyone in management and anyone saying that funding should be straightforwardly per student is demonstrating insufficient understanding of basic fucking budgeting that they may be safely ignored.
posted by fatbird at 2:51 PM on September 12, 2016 [6 favorites]
My simplistic reading of this issue leads me to believe many of the problems associated with this are due the crazy gerrymandering of what constitues a town. Big box retailers can't game the system where the town sizes aren't minscule. Trading areas need uniform tax code, so a retailer can't move three blocks down and benefit from another jurisdictions largesse regarding property tax rates.
posted by Keith Talent at 2:51 PM on September 12, 2016 [5 favorites]
posted by Keith Talent at 2:51 PM on September 12, 2016 [5 favorites]
We had a similar issue with a similar argument in BC with the crown corporation running the service successfully arguing that the specialized use of their terminals meant the actual market value was negligible. Ultimately the provincial government stepped in.
In this case, Michigan has a bill before the Senate in response to it. Which seems to add provisions limiting how the values of vacant properties can be considered when appealing a property tax assessment.
End of the day, this is just how tax law works. Someone advances an argument about why they should pay less tax, if the argument wins in court, more people adopt it, if the government judges that the risk is severe enough, the legislation will be amended. It's when the people advancing the argument are able to block or exert undue pressure on the the final step that it becomes scandalous.
posted by Grimgrin at 2:58 PM on September 12, 2016 [3 favorites]
In this case, Michigan has a bill before the Senate in response to it. Which seems to add provisions limiting how the values of vacant properties can be considered when appealing a property tax assessment.
End of the day, this is just how tax law works. Someone advances an argument about why they should pay less tax, if the argument wins in court, more people adopt it, if the government judges that the risk is severe enough, the legislation will be amended. It's when the people advancing the argument are able to block or exert undue pressure on the the final step that it becomes scandalous.
posted by Grimgrin at 2:58 PM on September 12, 2016 [3 favorites]
1, Property tax is based on the value of the property
2. The value of the property should be defined according to the price it would bring if it were up for sale, not how much it cost to build it or how much revenue it generates when operating
So: chemical plants, heavy-metals mining operations, nuclear processing facilities, large-scale resource-extraction sites, or anything else that renders property toxic as a consequence of its profitable exploitation, should never pay any property taxes.
posted by Harvey Kilobit at 2:58 PM on September 12, 2016 [18 favorites]
2. The value of the property should be defined according to the price it would bring if it were up for sale, not how much it cost to build it or how much revenue it generates when operating
So: chemical plants, heavy-metals mining operations, nuclear processing facilities, large-scale resource-extraction sites, or anything else that renders property toxic as a consequence of its profitable exploitation, should never pay any property taxes.
posted by Harvey Kilobit at 2:58 PM on September 12, 2016 [18 favorites]
They should be forced to put up a bond for demolition and restoration to the pre-construction state.
posted by mikelieman at 3:05 PM on September 12, 2016 [3 favorites]
posted by mikelieman at 3:05 PM on September 12, 2016 [3 favorites]
If the property is truly rendered worthless, sure. If you're going to tax something (property value in this case), then it's reasonable to not tax someone - even a big corporation - that doesn't have any of it.
posted by Hatashran at 3:06 PM on September 12, 2016 [2 favorites]
posted by Hatashran at 3:06 PM on September 12, 2016 [2 favorites]
Harvey Kilobit: If the law is written in such a way as to define the value of the property as the market value of equivalent properties; and if equivalent properties have a negligible value on the market when considering stage of use, per unit depreciation, cleanup obligations, etc; then arguably no.
posted by Grimgrin at 3:08 PM on September 12, 2016 [2 favorites]
posted by Grimgrin at 3:08 PM on September 12, 2016 [2 favorites]
The difference between fixed and variable costs are well understood by anyone in management and anyone saying that funding should be straightforwardly per student is demonstrating insufficient understanding of basic fucking budgeting that they may be safely ignored.
And yet people got elected and implemented that as an actual thing.
The other issue is one of subsidy - since old buildings have higher operational cost (bad boilers, lack of insulation) and higher capital expenses (refurbishment, etc), why should people who live near a new, cheap school be forced to send part of their tax dollars to support an old, expensive school? And then you get into the urban/rural spilt and it becomes a real political issue.
Besides, why shouldn't one town be allowed to have an expensive gold-plated school system while another town chooses to stick with basic facilities? (this is a separate issue from whether local businesses pay taxes or not though)
They should be forced to put up a bond for demolition and restoration to the pre-construction state.
The various refineries in the town I grew up in are between 100 and 50 years old. Most refineries in the US are pretty old. That ship sailed ages ago. There are barely any new refineries being built.
posted by GuyZero at 3:12 PM on September 12, 2016 [1 favorite]
And yet people got elected and implemented that as an actual thing.
The other issue is one of subsidy - since old buildings have higher operational cost (bad boilers, lack of insulation) and higher capital expenses (refurbishment, etc), why should people who live near a new, cheap school be forced to send part of their tax dollars to support an old, expensive school? And then you get into the urban/rural spilt and it becomes a real political issue.
Besides, why shouldn't one town be allowed to have an expensive gold-plated school system while another town chooses to stick with basic facilities? (this is a separate issue from whether local businesses pay taxes or not though)
They should be forced to put up a bond for demolition and restoration to the pre-construction state.
The various refineries in the town I grew up in are between 100 and 50 years old. Most refineries in the US are pretty old. That ship sailed ages ago. There are barely any new refineries being built.
posted by GuyZero at 3:12 PM on September 12, 2016 [1 favorite]
if equivalent properties have a negligible value on the market when considering stage of use, per unit depreciation, cleanup obligations, etc; then arguably no.
The question of "what is the monetary value of a business?" is one that takes an entire MBA course to cover.
posted by GuyZero at 3:13 PM on September 12, 2016 [1 favorite]
The question of "what is the monetary value of a business?" is one that takes an entire MBA course to cover.
posted by GuyZero at 3:13 PM on September 12, 2016 [1 favorite]
This isn't about gerrymandering.
This is about valuation. Property valuation is incredibly difficult because it is a wealth tax. There are plenty of legal protections to make sure that people are not taxed inequitably. This creates an opportunity to push valuations down, without a similar mechanism to push them back up when values rise.
The problem here is that commercial real estate is a pretty small market, when you think about it. It's hard to find comparable sales in the same jurisdiction in any given year. So one business failing creates an opportunity for all the other businesses to prove that it's a difficult business climate. And then they get the benefit even when it the business climate improves.
And I hate that education is tied to a wealth tax. It makes zero sense. Education is a public investment in our future. By tying it simultaneously to wealth and local jurisdictions, you're letting the wealthy invest in themselves, and acting surprised when everyone else falls more and more behind. It's especially bonkers in Texas, where rural areas with few students have all the money simply because the oil wells haven't dried up yet. And when they do, the schools will go back to famine.
And yet people pretend that land taxes are somehow a good idea.
posted by politikitty at 3:18 PM on September 12, 2016 [10 favorites]
This is about valuation. Property valuation is incredibly difficult because it is a wealth tax. There are plenty of legal protections to make sure that people are not taxed inequitably. This creates an opportunity to push valuations down, without a similar mechanism to push them back up when values rise.
The problem here is that commercial real estate is a pretty small market, when you think about it. It's hard to find comparable sales in the same jurisdiction in any given year. So one business failing creates an opportunity for all the other businesses to prove that it's a difficult business climate. And then they get the benefit even when it the business climate improves.
And I hate that education is tied to a wealth tax. It makes zero sense. Education is a public investment in our future. By tying it simultaneously to wealth and local jurisdictions, you're letting the wealthy invest in themselves, and acting surprised when everyone else falls more and more behind. It's especially bonkers in Texas, where rural areas with few students have all the money simply because the oil wells haven't dried up yet. And when they do, the schools will go back to famine.
And yet people pretend that land taxes are somehow a good idea.
posted by politikitty at 3:18 PM on September 12, 2016 [10 favorites]
GuyZero: Yes, I've taken several of them. But that's the point, you need tax law to define a valuation method, otherwise taxation risks being effectively arbitrary due to the multiplicity of ways you can assess monetary value. You need an appeal process, otherwise errors in assessment cannot be reversed, and people make mistakes. If you have those two things, you will also have this kind of situation.
posted by Grimgrin at 3:22 PM on September 12, 2016 [1 favorite]
posted by Grimgrin at 3:22 PM on September 12, 2016 [1 favorite]
Human bodies are hard to re-occupy.
It gets easier with practice.
posted by Etrigan at 3:27 PM on September 12, 2016 [7 favorites]
It gets easier with practice.
posted by Etrigan at 3:27 PM on September 12, 2016 [7 favorites]
why should people who live near a new, cheap school be forced to send part of their tax dollars to support an old, expensive school?
For the same reason that the rich subsidize the poor's use of the water system and the police and fire... because when you allow people to draw borders beneficially to themselves, they'll do so, and the rich get richer and the poor get poorer. Education is a public good, not a consumer preference.
The other issue is one of subsidy - since old buildings have higher operational cost (bad boilers, lack of insulation) and higher capital expenses (refurbishment, etc)
If this is handled at a state level, then this is simply a bookkeeping exercise to do with depreciation of capital assets, not an issue of "those assholes in the next county keep patching up their pretty brick school while we make due with concrete shells, so why am I supporting them?"
posted by fatbird at 3:27 PM on September 12, 2016 [14 favorites]
For the same reason that the rich subsidize the poor's use of the water system and the police and fire... because when you allow people to draw borders beneficially to themselves, they'll do so, and the rich get richer and the poor get poorer. Education is a public good, not a consumer preference.
The other issue is one of subsidy - since old buildings have higher operational cost (bad boilers, lack of insulation) and higher capital expenses (refurbishment, etc)
If this is handled at a state level, then this is simply a bookkeeping exercise to do with depreciation of capital assets, not an issue of "those assholes in the next county keep patching up their pretty brick school while we make due with concrete shells, so why am I supporting them?"
posted by fatbird at 3:27 PM on September 12, 2016 [14 favorites]
Besides, why shouldn't one town be allowed to have an expensive gold-plated school system while another town chooses to stick with basic facilities?
Stupid loser kids - choosing to be born to stupid loser parents.
If we want equity of opportunity then we should strive for it. Otherwise - why don't you just come out and say -serfs gonna serf.
posted by Gyre,Gimble,Wabe, Esq. at 3:41 PM on September 12, 2016 [15 favorites]
Stupid loser kids - choosing to be born to stupid loser parents.
If we want equity of opportunity then we should strive for it. Otherwise - why don't you just come out and say -serfs gonna serf.
posted by Gyre,Gimble,Wabe, Esq. at 3:41 PM on September 12, 2016 [15 favorites]
Otherwise - why don't you just come out and say -serfs gonna serf.
Strawmen gonna get strawmanned.
posted by Going To Maine at 3:43 PM on September 12, 2016 [2 favorites]
Strawmen gonna get strawmanned.
posted by Going To Maine at 3:43 PM on September 12, 2016 [2 favorites]
It's not a strawman - I was directly answering the question of why that's not okay. Kids don't get to pick. We should at least try to give them a level playing field. The argument in that comment seems to be that unlevel playing fields are a-okay. They aren't if we want a just society.
posted by Gyre,Gimble,Wabe, Esq. at 3:49 PM on September 12, 2016 [10 favorites]
posted by Gyre,Gimble,Wabe, Esq. at 3:49 PM on September 12, 2016 [10 favorites]
Kids don’t get to pick certainly; parents get to pick - but this is of course tangled up with a raft of other issues as well. Rather, I’d suggest that equating a lack of default support for funding of all schools equally is equivalent to automatically supporting serfdom is a bit extreme, in the same way that equating support for a “to each according to its need” funding scheme for all schools shouldn’t be equating with supporting communism.
posted by Going To Maine at 4:08 PM on September 12, 2016 [1 favorite]
posted by Going To Maine at 4:08 PM on September 12, 2016 [1 favorite]
Besides, why shouldn't one town be allowed to have an expensive gold-plated school system while another town chooses to stick with basic facilities?
I've never lived in a school district that chose to spend less money than it had available (aside from occasional relatively small amounts into a rainy day fund). I don't think that's really the issue in school funding.
posted by Etrigan at 4:08 PM on September 12, 2016 [4 favorites]
I've never lived in a school district that chose to spend less money than it had available (aside from occasional relatively small amounts into a rainy day fund). I don't think that's really the issue in school funding.
posted by Etrigan at 4:08 PM on September 12, 2016 [4 favorites]
The good news is that if all the schools are funded at the state level, the state legislature can unilaterally wipe out funding to all the schools at once. So that's nice.
(My state legislature hates my municipality. I'm not excited about giving them more power.)
posted by Huffy Puffy at 4:12 PM on September 12, 2016 [3 favorites]
(My state legislature hates my municipality. I'm not excited about giving them more power.)
posted by Huffy Puffy at 4:12 PM on September 12, 2016 [3 favorites]
meinvnt, Henry George's land value tax might be what you're thinking of.
posted by clew at 4:12 PM on September 12, 2016 [2 favorites]
posted by clew at 4:12 PM on September 12, 2016 [2 favorites]
In Ontario this led to 100 year-old public schools being given the same per-student funding that suburban school build 5 years ago were getting
First Ontario has regionally allocated funding of 70+ boards of education (Peel region represent!).
Second it isn't straight headcount that determines how much the boards get (though it is the largest factor).
At least google before you authoritate. Maybe start here.
As someone who has been exposed to both the systems and outputs of three different countries (Canada, US and UK) I'd say Ontario does a pretty excellent job. Part of the sanity of Canada is that it's education system is very level and egalitarian.
It could be better it is already very good.
posted by srboisvert at 4:16 PM on September 12, 2016 [4 favorites]
First Ontario has regionally allocated funding of 70+ boards of education (Peel region represent!).
Second it isn't straight headcount that determines how much the boards get (though it is the largest factor).
At least google before you authoritate. Maybe start here.
As someone who has been exposed to both the systems and outputs of three different countries (Canada, US and UK) I'd say Ontario does a pretty excellent job. Part of the sanity of Canada is that it's education system is very level and egalitarian.
It could be better it is already very good.
posted by srboisvert at 4:16 PM on September 12, 2016 [4 favorites]
As someone who has been exposed to both the systems and outputs of three different countries (Canada, US and UK) I'd say Ontario does a pretty excellent job. Part of the sanity of Canada is that it's education system is very level and egalitarian.
I'm not saying that Ontario's system is bad. My kids were in the TDSB from until 2008 and it was fine. My main point was that the funding formula changed (in 1997-ish) from provincial+property taxes to all-provincial and there were pros and cons to the change. I hope you're not going to say that the funding formula change in Ontario was without controversy. I recall that the TDSB got the short end of the stick but maybe I'm remembering wrong.
I've never lived in a school district that chose to spend less money than it had available (aside from occasional relatively small amounts into a rainy day fund). I don't think that's really the issue in school funding.
Different US school districts pass different bond measures. Some districts don't propose many bond measures, some propose a lot, some don't have many approved by voters, some have a lot approved. There are differences of millions of dollars in bond measures between US school districts that sit right next to each other.
Strong financial support for schools across the board is a great idea - I'm not some libertarian extremist who opposes state funded schooling. But to make it impossible for local regions to make their own decisions about things seems to swing too far in the opposite direction. Not that US-style bond measures are all that great though - they can perpetuate inequality and you could see them as trying to make up for a lack of central funding in the first place. But you have to give local municipalities some autonomy otherwise there's no point in having them at all.
posted by GuyZero at 4:28 PM on September 12, 2016 [1 favorite]
I'm not saying that Ontario's system is bad. My kids were in the TDSB from until 2008 and it was fine. My main point was that the funding formula changed (in 1997-ish) from provincial+property taxes to all-provincial and there were pros and cons to the change. I hope you're not going to say that the funding formula change in Ontario was without controversy. I recall that the TDSB got the short end of the stick but maybe I'm remembering wrong.
I've never lived in a school district that chose to spend less money than it had available (aside from occasional relatively small amounts into a rainy day fund). I don't think that's really the issue in school funding.
Different US school districts pass different bond measures. Some districts don't propose many bond measures, some propose a lot, some don't have many approved by voters, some have a lot approved. There are differences of millions of dollars in bond measures between US school districts that sit right next to each other.
Strong financial support for schools across the board is a great idea - I'm not some libertarian extremist who opposes state funded schooling. But to make it impossible for local regions to make their own decisions about things seems to swing too far in the opposite direction. Not that US-style bond measures are all that great though - they can perpetuate inequality and you could see them as trying to make up for a lack of central funding in the first place. But you have to give local municipalities some autonomy otherwise there's no point in having them at all.
posted by GuyZero at 4:28 PM on September 12, 2016 [1 favorite]
And just to be clear - big box stores should just pay their damn taxes.
posted by GuyZero at 4:29 PM on September 12, 2016
posted by GuyZero at 4:29 PM on September 12, 2016
Rather, I’d suggest that equating a lack of default support for funding of all schools equally is equivalent to automatically supporting serfdom is a bit extreme, in the same way that equating support for a “to each according to its need” funding scheme for all schools shouldn’t be equating with supporting communism.
To steal a story from the boyhood of an old southern civil rights advocate: His mama said to him and his brother - "Don't roughhouse in the living room." While mama went to the store - he and his brother roughhoused in the living room, and broke her grandmomma's lamp. When mama came back from the store - the boys pleaded that they didn't mean to break the lamp. Mama replied: "Well, you certainly didn't mean not to, either."
Intentions, and more pointedly, lack of intention, matters, especially when it contributes to poor outcomes.
posted by Gyre,Gimble,Wabe, Esq. at 4:31 PM on September 12, 2016 [5 favorites]
To steal a story from the boyhood of an old southern civil rights advocate: His mama said to him and his brother - "Don't roughhouse in the living room." While mama went to the store - he and his brother roughhoused in the living room, and broke her grandmomma's lamp. When mama came back from the store - the boys pleaded that they didn't mean to break the lamp. Mama replied: "Well, you certainly didn't mean not to, either."
Intentions, and more pointedly, lack of intention, matters, especially when it contributes to poor outcomes.
posted by Gyre,Gimble,Wabe, Esq. at 4:31 PM on September 12, 2016 [5 favorites]
At least google before you authoritate. Maybe start here.
And on getting to the bottom of that article finally... it basically says what I remembers about the TDSB:
Toronto and the Funding Formula
A recent report from the Canadian Centre for Policy Alternatives (CCPA) says that the funding formula shortchanges the education system, and Toronto in particular. The report seems to suggest that TDSB spending scandals are less important than inadequate provincial funding in explaining why GTA schools seem to be chronically short of cash. According to the CCPA, Toronto schools don’t get enough cash for even basic services like libraries, let alone services such as language training or programs for high-risk kids, which tend to be needed more in Toronto than in smaller municipalities.
Still, if Toronto needs more investment in education (and we assume that waste-reduction programs will result in no significant savings), there are only a few places it can come from. Either the province shifts resources from other school boards, or from other programs into education funding, or gets increased funding for education from taxpayers. None of those options are likely to be well-received by the non-GTA population of Ontario, and the Liberal government, having snagged an improbable majority in the last election, will be keenly aware of that fact.
Again, I'm not saying the Ontario system totally bad but that funding schools in Windsor, Sarnia, Ottawa, Sudbury, Fenlon Falls and Mississauga with the same formula as central Toronto is never going to make everyone happy. The age of facilities, the proportion of ESL students, etc, etc.
(Sorry for the weird digression, people from Michigan. I hope the UP gets sorted out)
posted by GuyZero at 4:35 PM on September 12, 2016 [1 favorite]
And on getting to the bottom of that article finally... it basically says what I remembers about the TDSB:
Toronto and the Funding Formula
A recent report from the Canadian Centre for Policy Alternatives (CCPA) says that the funding formula shortchanges the education system, and Toronto in particular. The report seems to suggest that TDSB spending scandals are less important than inadequate provincial funding in explaining why GTA schools seem to be chronically short of cash. According to the CCPA, Toronto schools don’t get enough cash for even basic services like libraries, let alone services such as language training or programs for high-risk kids, which tend to be needed more in Toronto than in smaller municipalities.
Still, if Toronto needs more investment in education (and we assume that waste-reduction programs will result in no significant savings), there are only a few places it can come from. Either the province shifts resources from other school boards, or from other programs into education funding, or gets increased funding for education from taxpayers. None of those options are likely to be well-received by the non-GTA population of Ontario, and the Liberal government, having snagged an improbable majority in the last election, will be keenly aware of that fact.
Again, I'm not saying the Ontario system totally bad but that funding schools in Windsor, Sarnia, Ottawa, Sudbury, Fenlon Falls and Mississauga with the same formula as central Toronto is never going to make everyone happy. The age of facilities, the proportion of ESL students, etc, etc.
(Sorry for the weird digression, people from Michigan. I hope the UP gets sorted out)
posted by GuyZero at 4:35 PM on September 12, 2016 [1 favorite]
why should people who live near a new, cheap school be forced to send part of their tax dollars to support an old, expensive school?
Eventually their school too will be expensive.
posted by jeather at 4:43 PM on September 12, 2016 [3 favorites]
Eventually their school too will be expensive.
posted by jeather at 4:43 PM on September 12, 2016 [3 favorites]
Thus Big Box stores shouldn't have to pay taxes?
The classic definition of fair value is what a willing buyer would pay a willing seller. So the hypothetical resale value is ultimately what matters.
It would need a statutory fix to change that.
posted by jpe at 4:46 PM on September 12, 2016
The classic definition of fair value is what a willing buyer would pay a willing seller. So the hypothetical resale value is ultimately what matters.
It would need a statutory fix to change that.
posted by jpe at 4:46 PM on September 12, 2016
There are plazas here in Flint that need no set prep for a 'Walking Dead' spin off. Pristine, down to the weeded parking lots and faded boarding.
While this is bad, at least GM demolished its plants, the car dealers remain.
I got that dose of Dark box/bldg. feeling when Buick headquarters closed. Spooky and prescient.
Thanks for posting this.
posted by clavdivs at 4:54 PM on September 12, 2016 [1 favorite]
While this is bad, at least GM demolished its plants, the car dealers remain.
I got that dose of Dark box/bldg. feeling when Buick headquarters closed. Spooky and prescient.
Thanks for posting this.
posted by clavdivs at 4:54 PM on September 12, 2016 [1 favorite]
Intentions, and more pointedly, lack of intention, matters, especially when it contributes to poor outcomes.
We are, I think, at the point of tone argument, with my standard position remaining that tone matters.
posted by Going To Maine at 4:55 PM on September 12, 2016
We are, I think, at the point of tone argument, with my standard position remaining that tone matters.
posted by Going To Maine at 4:55 PM on September 12, 2016
Different US school districts pass different bond measures. Some districts don't propose many bond measures, some propose a lot, some don't have many approved by voters, some have a lot approved. There are differences of millions of dollars in bond measures between US school districts that sit right next to each other.
People are also idiots about school bond measures. I grew up in an area that couldn't pass a school bond for 40 years, much of which the local government spent panicking about why it couldn't attract good jobs and why professionals with young families actively avoided the area. That's thousands of children shuffled through a school system with inadequate and severely outdated facilities because it was at the mercy of a few short-sighted individuals and a political process that I'm quite sure few residents actually understood. In principle, I think it's important for locals to be involved in the decision-making process for new facilities paid for with public money, but the right way to do that is not to have periodic low-turnout and heavily politicized votes about it, especially when the victims of the dysfunctions in the process are children who are completely unable to do anything about it.
posted by Copronymus at 5:00 PM on September 12, 2016 [2 favorites]
People are also idiots about school bond measures. I grew up in an area that couldn't pass a school bond for 40 years, much of which the local government spent panicking about why it couldn't attract good jobs and why professionals with young families actively avoided the area. That's thousands of children shuffled through a school system with inadequate and severely outdated facilities because it was at the mercy of a few short-sighted individuals and a political process that I'm quite sure few residents actually understood. In principle, I think it's important for locals to be involved in the decision-making process for new facilities paid for with public money, but the right way to do that is not to have periodic low-turnout and heavily politicized votes about it, especially when the victims of the dysfunctions in the process are children who are completely unable to do anything about it.
posted by Copronymus at 5:00 PM on September 12, 2016 [2 favorites]
If the property tax value is too low the municipalities should just eminent domain the store & resell to competitors to bring it up instead of fighting the assertion in court. If it's correct they don't have much legal leg to stand on.
posted by BrotherCaine at 5:23 PM on September 12, 2016 [1 favorite]
posted by BrotherCaine at 5:23 PM on September 12, 2016 [1 favorite]
...at which point the municipality finds out that sure enough, empty big box stores don't really have much value.
posted by Hatashran at 5:38 PM on September 12, 2016 [3 favorites]
posted by Hatashran at 5:38 PM on September 12, 2016 [3 favorites]
Seconding the idea that taxes should be raised on vacant lots, not lowered on big-box stores.
The source of value that originally belonged to the public commons, and therefore should be taxed by the public government, is the land itself--and that's as valuable as the most lucrative thing an available tenant could think to do with it.
posted by Rangi at 5:38 PM on September 12, 2016
The source of value that originally belonged to the public commons, and therefore should be taxed by the public government, is the land itself--and that's as valuable as the most lucrative thing an available tenant could think to do with it.
posted by Rangi at 5:38 PM on September 12, 2016
If the property tax value is too low the municipalities should just eminent domain the store & resell to competitors
After the Kelo decision, Michigan passed an amendment prohibiting the state from taking property just to hand it over to giant corporations.
posted by jpe at 5:45 PM on September 12, 2016 [2 favorites]
After the Kelo decision, Michigan passed an amendment prohibiting the state from taking property just to hand it over to giant corporations.
posted by jpe at 5:45 PM on September 12, 2016 [2 favorites]
Vacancy signals a surplus of land, which is why its vacant. We like land and property taxes in developed areas because it pressures owners to devote the land to its highest, best use (eg, the use that produces the most revenue). It doesn't really do anything in a surplus environment except further depresss values.
posted by jpe at 5:48 PM on September 12, 2016 [5 favorites]
posted by jpe at 5:48 PM on September 12, 2016 [5 favorites]
The source of value that originally belonged to the public commons, and therefore should be taxed by the public government, is the land itself--and that's as valuable as the most lucrative thing an available tenant could think to do with it.
These are the opening words of the article:
On Michigan’s sparsely populated Upper Peninsula
In general I agree with you but the plummeting real estate values in the UP are probably more a symptom of poorly planned overbuilding rather than anything else. Not that that should get the remaining businesses out of paying property taxes.
posted by GuyZero at 5:51 PM on September 12, 2016 [1 favorite]
These are the opening words of the article:
On Michigan’s sparsely populated Upper Peninsula
In general I agree with you but the plummeting real estate values in the UP are probably more a symptom of poorly planned overbuilding rather than anything else. Not that that should get the remaining businesses out of paying property taxes.
posted by GuyZero at 5:51 PM on September 12, 2016 [1 favorite]
Just in case there isn't enough presidential politics everywhere this is exactly what the Trump Tower in Chicago does. The reason it has vacant retail space on the ground floor is that they can save so much in taxes by being empty and claiming that is a bad location that it isn't worth it for them to try and rent it at the real market value for the space.
posted by srboisvert at 6:02 PM on September 12, 2016 [1 favorite]
posted by srboisvert at 6:02 PM on September 12, 2016 [1 favorite]
why should people who live near a new, cheap school be forced to send part of their tax dollars to support an old, expensive school?
It is very much in every person's interest to have the whole population be truly educated. I need your kids to understand basic personal economics, political history, and the science behind basic ecology and immunizations, among other things. Your neighbors are better neighbors when they know the same things you know. It's not just about employment, either -- it's about knowing enough to be genuinely helpful in really needed ways, and not mucking things up in what are now very close quarters.
We can't afford to think of education as essentially a competition anymore.
posted by amtho at 6:43 PM on September 12, 2016 [15 favorites]
It is very much in every person's interest to have the whole population be truly educated. I need your kids to understand basic personal economics, political history, and the science behind basic ecology and immunizations, among other things. Your neighbors are better neighbors when they know the same things you know. It's not just about employment, either -- it's about knowing enough to be genuinely helpful in really needed ways, and not mucking things up in what are now very close quarters.
We can't afford to think of education as essentially a competition anymore.
posted by amtho at 6:43 PM on September 12, 2016 [15 favorites]
This is insane. I mean, my house would be worth much less too if it were abandoned, but it isn't, so I have to pay full property taxes on it. But the stores are succesfully making that argument. This is why people hate lawyers.
posted by miyabo at 7:38 PM on September 12, 2016 [4 favorites]
posted by miyabo at 7:38 PM on September 12, 2016 [4 favorites]
Businesses which go in for this kind of tax abatement are sowing the wind.
The whirlwind comes back around when activists use it to argue that the big box should be denied a building permit in the first place because it will result in lower tax revenues than smaller scale development at the same time it requires more infrastructure and policing because of the larger number of non-residents it will attract -- and then to top it all off, when the big box store moves (to a bigger box dozens of miles away) everyone else's property values go down, yet tax rates have to go up to keep schools from falling off a cliff, and the smaller and locally owned surrounding businesses go dark one by one as the out of town traffic dwindles.
posted by jamjam at 8:48 PM on September 12, 2016 [6 favorites]
The whirlwind comes back around when activists use it to argue that the big box should be denied a building permit in the first place because it will result in lower tax revenues than smaller scale development at the same time it requires more infrastructure and policing because of the larger number of non-residents it will attract -- and then to top it all off, when the big box store moves (to a bigger box dozens of miles away) everyone else's property values go down, yet tax rates have to go up to keep schools from falling off a cliff, and the smaller and locally owned surrounding businesses go dark one by one as the out of town traffic dwindles.
posted by jamjam at 8:48 PM on September 12, 2016 [6 favorites]
Vacancy signals a surplus of land, which is why its vacant. We like land and property taxes in developed areas because it pressures owners to devote the land to its highest, best use (eg, the use that produces the most revenue). It doesn't really do anything in a surplus environment except further depress values.
Depressing the value of the land is exactly what you want to do if there is a surplus. A surplus means the land price is too high. The higher the tax rate, the greater the cost of holding unused land. The owner is incentivized to lower its sale price to find someone who will put the land to productive use.
posted by JackFlash at 9:34 PM on September 12, 2016 [2 favorites]
Depressing the value of the land is exactly what you want to do if there is a surplus. A surplus means the land price is too high. The higher the tax rate, the greater the cost of holding unused land. The owner is incentivized to lower its sale price to find someone who will put the land to productive use.
posted by JackFlash at 9:34 PM on September 12, 2016 [2 favorites]
miyabo: ah, but someone would be willing to buy your house if you put it up for sale, no? That's what it's worth, and that's what you pay taxes on. The problem with these big box sites is that they really aren't worth much, because businesses aren't very interested in an empty one--it's worth about the same as a vacant lot. There are just too many of them.
Big box stores are generally built on low-value land to start with, because it's cheap. They aren't built to last, because why would they be? The biggest investment is in the form of the roads and utility improvements necessary to make these locations feasible--and that's the responsibility of the government. They will require maintenance forever, which is also the responsibility of the government.
Simply put, governments are too willing to make these 'investments'. Is there heavy traffic on a road? Of course the government should widen it (and of course tolling is anathema). Is a business proposing to build something on a greenfield site? Of course the government should extend utilities to it. But it just encourages more sprawl, which weighs down the government's maintenance budgets more and more. The idea, of course, is that once all this infrastructure had been built, future users were supposed to pay for it-- but why would anyone pay for the maintenance of used infrastructure when it's so easy to get the same government (or a different one) to build you some brand new stuff for free?
posted by alexei at 10:57 PM on September 12, 2016 [1 favorite]
Big box stores are generally built on low-value land to start with, because it's cheap. They aren't built to last, because why would they be? The biggest investment is in the form of the roads and utility improvements necessary to make these locations feasible--and that's the responsibility of the government. They will require maintenance forever, which is also the responsibility of the government.
Simply put, governments are too willing to make these 'investments'. Is there heavy traffic on a road? Of course the government should widen it (and of course tolling is anathema). Is a business proposing to build something on a greenfield site? Of course the government should extend utilities to it. But it just encourages more sprawl, which weighs down the government's maintenance budgets more and more. The idea, of course, is that once all this infrastructure had been built, future users were supposed to pay for it-- but why would anyone pay for the maintenance of used infrastructure when it's so easy to get the same government (or a different one) to build you some brand new stuff for free?
posted by alexei at 10:57 PM on September 12, 2016 [1 favorite]
The formula here should be "% acreage in jurisdiction x tax levy", and market value is just a distraction.
posted by mikelieman at 11:00 PM on September 12, 2016
posted by mikelieman at 11:00 PM on September 12, 2016
And I hate that education is tied to a wealth tax.
I dislike pretty much any tax used to fund a specific thing. This is one of those rare instances when comparisons to personal finance work really well. It doesn't matter how many jobs or other sources of income I have, it all goes into the same account and my expenses generally have nothing at all to do with my income. Getting a raise might mean I can afford better stuff generally but a decision that a specific dollar amount of my raise must pay for some specific thing is silly. I mean, people do it, but they're aware that it's an entirely arbitrary thing.
And from a government level, these things are important because they can have such a direct effect on the economy. So it would be helpful to manage revenues and the necessary loopholes needed and incentives to encourage whatever things you want to encourage and do the same for spending without one really having to have anything to do with the other.
This is doubly true at the Federal level where deficit spending is a tool in your economic management tool-box.
posted by VTX at 11:29 PM on September 12, 2016 [1 favorite]
I dislike pretty much any tax used to fund a specific thing. This is one of those rare instances when comparisons to personal finance work really well. It doesn't matter how many jobs or other sources of income I have, it all goes into the same account and my expenses generally have nothing at all to do with my income. Getting a raise might mean I can afford better stuff generally but a decision that a specific dollar amount of my raise must pay for some specific thing is silly. I mean, people do it, but they're aware that it's an entirely arbitrary thing.
And from a government level, these things are important because they can have such a direct effect on the economy. So it would be helpful to manage revenues and the necessary loopholes needed and incentives to encourage whatever things you want to encourage and do the same for spending without one really having to have anything to do with the other.
This is doubly true at the Federal level where deficit spending is a tool in your economic management tool-box.
posted by VTX at 11:29 PM on September 12, 2016 [1 favorite]
On preview, mikelieman's idea is great because the jurisdiction can determine how much revenue it needs and then just use that as your base value for the formula.
The problem is has is that some people will rightly argue that they're property should count for a lower % (or someone else's a higher one) because of some social benefit it provides or social cost it incurs.
Basically, the best value at any company in terms of net profit gained per dollar of salary earned will be the their tax accountant (and this is a VERY highly paid position) and you can bet your bottom dollar that they'll find a way to exploit those rules too.
I think the end game for a scheme of increasing taxes on vacant property would have to be a way to sell the land back to the jurisdiction levying the tax. Maybe you have an option to pay your taxes as a percentage of ownership to the property? When you sell, you split the profits according to the percentage and if it hits 100%, it goes back to the jurisdiction.
Basically you levy the increased tax on vacant land as a way to say, "Hey, you need to do something with that land or you're going to get screwed!" and then come up with a way for the jurisdiction to say, "But if we can take the land back and do some kind of public good with it, you won't get screwed as hard."
posted by VTX at 11:40 PM on September 12, 2016
The problem is has is that some people will rightly argue that they're property should count for a lower % (or someone else's a higher one) because of some social benefit it provides or social cost it incurs.
Basically, the best value at any company in terms of net profit gained per dollar of salary earned will be the their tax accountant (and this is a VERY highly paid position) and you can bet your bottom dollar that they'll find a way to exploit those rules too.
I think the end game for a scheme of increasing taxes on vacant property would have to be a way to sell the land back to the jurisdiction levying the tax. Maybe you have an option to pay your taxes as a percentage of ownership to the property? When you sell, you split the profits according to the percentage and if it hits 100%, it goes back to the jurisdiction.
Basically you levy the increased tax on vacant land as a way to say, "Hey, you need to do something with that land or you're going to get screwed!" and then come up with a way for the jurisdiction to say, "But if we can take the land back and do some kind of public good with it, you won't get screwed as hard."
posted by VTX at 11:40 PM on September 12, 2016
On preview, mikelieman's idea is great because the jurisdiction can determine how much revenue it needs and then just use that as your base value for the formula.
Commercial real estate usually pays a higher millage rate, so in a sense this is what the companies are asking for. To pay a lower% of the assessed value.
Although they way they are doing it is by arguing the assessments are too high,
posted by JPD at 3:30 AM on September 13, 2016
Commercial real estate usually pays a higher millage rate, so in a sense this is what the companies are asking for. To pay a lower% of the assessed value.
Although they way they are doing it is by arguing the assessments are too high,
posted by JPD at 3:30 AM on September 13, 2016
Would it be possible to bring action against the companies as a remedy for their rapidly devaluing the land they're using? Perhaps revenue could be recouped that way.
posted by amtho at 3:52 AM on September 13, 2016
posted by amtho at 3:52 AM on September 13, 2016
Here in the UK, Apple's generous tax treatment depends on them administering the vast majority of their British sales through the Republic of Ireland. Technically speaking, these become Irish sales, and so Apple benefits from the lower tax rates available there.
Today, it was announced that Apple is one of the companies targeted by a Bank of England scheme which buys company bonds in the hope of boosting the economy. One of the criteria for selecting these companies is that they have big sales in Britain. This creates a kind of benign Catch 22 for Apple:
1) Our British sales are negligible, therefore we're entitled to pay very little British tax.
2) Our British sales are huge, therefore we're entitled to huge wodges of cash from the Bank of England.
Fucked-up, isn't it?
posted by Paul Slade at 5:07 AM on September 13, 2016
Today, it was announced that Apple is one of the companies targeted by a Bank of England scheme which buys company bonds in the hope of boosting the economy. One of the criteria for selecting these companies is that they have big sales in Britain. This creates a kind of benign Catch 22 for Apple:
1) Our British sales are negligible, therefore we're entitled to pay very little British tax.
2) Our British sales are huge, therefore we're entitled to huge wodges of cash from the Bank of England.
Fucked-up, isn't it?
posted by Paul Slade at 5:07 AM on September 13, 2016
amtho: We can't afford to think of education as essentially a competition anymore.
QFT.
Part of where Something Went Very Wrong with the Plan, in my opinion, was when that point of view (it's a competition for my children's future, vs. it's a guarantee for the society's future) became the dominant one for multiple disparate reasons.
This is a derail of sorts so I'll step back out.
posted by seyirci at 5:33 AM on September 13, 2016 [4 favorites]
QFT.
Part of where Something Went Very Wrong with the Plan, in my opinion, was when that point of view (it's a competition for my children's future, vs. it's a guarantee for the society's future) became the dominant one for multiple disparate reasons.
This is a derail of sorts so I'll step back out.
posted by seyirci at 5:33 AM on September 13, 2016 [4 favorites]
Would it be possible to bring action against the companies as a remedy for their rapidly devaluing the land they're using? Perhaps revenue could be recouped that way.
I don't know that the companies are rapidly devaluing the land. I don't think they are arguing "This store is worth less than a vacant lot." I think they're saying "It's not worth much more than that." (Though they may be arguing it's worth less, pointing out that a buyer will have to pay to demolish the existing structure in order to get the value they would from an empty lot.)
posted by layceepee at 6:05 AM on September 13, 2016 [1 favorite]
I don't know that the companies are rapidly devaluing the land. I don't think they are arguing "This store is worth less than a vacant lot." I think they're saying "It's not worth much more than that." (Though they may be arguing it's worth less, pointing out that a buyer will have to pay to demolish the existing structure in order to get the value they would from an empty lot.)
posted by layceepee at 6:05 AM on September 13, 2016 [1 favorite]
Vacancy signals a surplus of land, which is why its vacant.
Hoo-boy, do we ever live in different places. Around here, it signals a seething morass of broken, cross-competing incentives, which can loosely be summarized as "landlords would rather leave a storefront vacant than rent it for $5K a month when they think it should be $10K, even if prevailing market rates are nowhere near $10K, because property values are rising so quickly that long-term leases are now a liability unless they're significantly above market value, and also if you have vacant property you can count it as 'lost revenue' and use it to offset your tax obligations from other rental property, so why would you spend money developing or repairing commercial real estate when you can instead sit on your investment like Smaug on a giant pile of gold, watching as you accumulate wealth while the neighborhood simultaneously goes to shit and becomes unaffordable because there's no $&%^! available properties to rent."
In summary, America is a land of contrasts, and also vacant commercial property should be taxed so egregiously that the guy from SimCity2000 pops up his head reminding us that "YOU'LL REGRET THIS!"
posted by Mayor West at 6:18 AM on September 13, 2016 [7 favorites]
Hoo-boy, do we ever live in different places. Around here, it signals a seething morass of broken, cross-competing incentives, which can loosely be summarized as "landlords would rather leave a storefront vacant than rent it for $5K a month when they think it should be $10K, even if prevailing market rates are nowhere near $10K, because property values are rising so quickly that long-term leases are now a liability unless they're significantly above market value, and also if you have vacant property you can count it as 'lost revenue' and use it to offset your tax obligations from other rental property, so why would you spend money developing or repairing commercial real estate when you can instead sit on your investment like Smaug on a giant pile of gold, watching as you accumulate wealth while the neighborhood simultaneously goes to shit and becomes unaffordable because there's no $&%^! available properties to rent."
In summary, America is a land of contrasts, and also vacant commercial property should be taxed so egregiously that the guy from SimCity2000 pops up his head reminding us that "YOU'LL REGRET THIS!"
posted by Mayor West at 6:18 AM on September 13, 2016 [7 favorites]
I noticed some comments concerning the need for local control of education, but I really have a hard time figuring out why that is so important. Other than local history, why do local school boards, etc. have any legitimate reason to dictate the curriculum? Math and science are the same regardless of where you learn them, and state and national history are probably better taught using state and national curricula. Otherwise, it is too easy for a few cranks to get on the local school board and push for things like creationism or lost cause mythology in the schools (not to mention maintaining de facto segregation). Of course, even school boards at the state level aren't much better sometimes. Education (like healthcare) is a national good that should be handled at that level. Of course, that idea sends people in the US into orbit for some reason, as evidenced by the reaction to the modest voluntary standards in the Common Core Initiative.
posted by TedW at 6:24 AM on September 13, 2016 [3 favorites]
posted by TedW at 6:24 AM on September 13, 2016 [3 favorites]
Hit post before finishing; stop using property tax funding for schools and use it instead for local projects like infrastructure, parks, or museums. Perhaps that would get more people interested in where their local taxes come from and go to and make it harder for big players to get out of paying their fair share.
posted by TedW at 6:28 AM on September 13, 2016
posted by TedW at 6:28 AM on September 13, 2016
I noticed some comments concerning the need for local control of education, but I really have a hard time figuring out why that is so important.
I'm not sure how important that is, but here are some possible arguments for it:
- It's going to be a lot easier to find and pay really good science teachers in, say, Chapel Hill or Durham than in some other places;
- If you suddenly impose a stricter/harder curriculum on a system with a lot of kids who can't handle it, they all could just give up (gradual introduction would be different);
- behavioral economics' "Ikea" effect: if you make something, you are inclined to value it; making up the curriculum and the educational system is something that helps motivate people in a community to support it. "Just give money" won't make someone feel the connection to educating kids that "help design and build a way to take care of these kids" would.
posted by amtho at 6:53 AM on September 13, 2016
I'm not sure how important that is, but here are some possible arguments for it:
- It's going to be a lot easier to find and pay really good science teachers in, say, Chapel Hill or Durham than in some other places;
- If you suddenly impose a stricter/harder curriculum on a system with a lot of kids who can't handle it, they all could just give up (gradual introduction would be different);
- behavioral economics' "Ikea" effect: if you make something, you are inclined to value it; making up the curriculum and the educational system is something that helps motivate people in a community to support it. "Just give money" won't make someone feel the connection to educating kids that "help design and build a way to take care of these kids" would.
posted by amtho at 6:53 AM on September 13, 2016
It doesn't matter how many jobs or other sources of income I have, it all goes into the same account and my expenses generally have nothing at all to do with my income.
This has nothing to do with a wealth tax. Wealth fluctuates based on the market. If you make a million dollars, and put it all in stock, you will have a different amount of wealth every single day. The same happens with property. Except because the value is opaque, companies can take advantage of every market downturn. Jurisdictions have a hard time taking advantage of every market upswing due to constitutional protections (see Complete Auto Transit). Many states have additional protections that you can only raise the value a small amount each year.
Wealth is less stable than income which is less stable than expenses from a revenue perspective. Of course, consumption taxes are more regressive than an income tax, which in turn are more regressive than a wealth tax. They're the two competing progressive values - an ability to fund a robust state, and an ability to fairly tax the user base.
My issue isn't with a wealth tax. It's using a wealth tax at the most local level. The largesse of one jurisdiction is unable to fund another jurisdiction. This is even more problematic when local governments are less able to run a deficit. It's perverse that a temporary budgetary crisis will affect educating the next generation of citizens, so they are less able to contribute as the next generation of tax payers.
posted by politikitty at 10:18 AM on September 13, 2016
This has nothing to do with a wealth tax. Wealth fluctuates based on the market. If you make a million dollars, and put it all in stock, you will have a different amount of wealth every single day. The same happens with property. Except because the value is opaque, companies can take advantage of every market downturn. Jurisdictions have a hard time taking advantage of every market upswing due to constitutional protections (see Complete Auto Transit). Many states have additional protections that you can only raise the value a small amount each year.
Wealth is less stable than income which is less stable than expenses from a revenue perspective. Of course, consumption taxes are more regressive than an income tax, which in turn are more regressive than a wealth tax. They're the two competing progressive values - an ability to fund a robust state, and an ability to fairly tax the user base.
My issue isn't with a wealth tax. It's using a wealth tax at the most local level. The largesse of one jurisdiction is unable to fund another jurisdiction. This is even more problematic when local governments are less able to run a deficit. It's perverse that a temporary budgetary crisis will affect educating the next generation of citizens, so they are less able to contribute as the next generation of tax payers.
posted by politikitty at 10:18 AM on September 13, 2016
Taxation on use vs sale is really hard, though. My little grandmother owns a house that used to hold our big sprawling family. She is taxed at a blend of what, essentially, she could get if she rented two floors of a three family house, and what it would get if she sold it to someone who would rent out multiple floors. But she, herself, isn't renting out multiple floors, and is old and frail and couldn't do so anyway.
But at the same time, the weird way we do property taxes makes people do crazy stuff. It makes more sense to tax income AS income, rather than "income producing property", but because things are tied to specifically property tax, we don't.
posted by corb at 12:58 PM on September 13, 2016
But at the same time, the weird way we do property taxes makes people do crazy stuff. It makes more sense to tax income AS income, rather than "income producing property", but because things are tied to specifically property tax, we don't.
posted by corb at 12:58 PM on September 13, 2016
This has nothing to do with a wealth tax.
Nor is it supposed to. All I'm saying is that my expenses don't care where the funds to pay for them came from. Governments seem to think they theirs do, it's ridiculous. If my first job is supposed to cover the rent, but doesn't, and I have a second job that covers everything else and let's say that includes a solid monthly deposit into my savings, I still just write a check for the full rent amount. If my two incomes don't cover all my expenses, I have to cut back, if I can't do that, I have to borrow.
Governments need to determine their revenue and expense needs, decide whether the current economic climate justifies running a deficit, then decide how those various taxes will be distributed, stratified by income, wealth, property and then introduce deductions and credits.
I mean, it's basically what they do now except we'd do away with all the, "We're enacting a law that does X, Y, and Z and we're adding a fee to this specific thing to pay for it."
And we'd stop doing things like adding red light cameras can stop being a play to increase revenue and we can focus on using moving violation fines to discourage unsafe driving.
But that would require an electorate that was okay with occasional tax increases and people being told by someone asking for their vote that they want to increase their taxes to make it more likely to vote for them. Right now those people are rare, they need to be the majority.
posted by VTX at 6:57 PM on September 13, 2016
Nor is it supposed to. All I'm saying is that my expenses don't care where the funds to pay for them came from. Governments seem to think they theirs do, it's ridiculous. If my first job is supposed to cover the rent, but doesn't, and I have a second job that covers everything else and let's say that includes a solid monthly deposit into my savings, I still just write a check for the full rent amount. If my two incomes don't cover all my expenses, I have to cut back, if I can't do that, I have to borrow.
Governments need to determine their revenue and expense needs, decide whether the current economic climate justifies running a deficit, then decide how those various taxes will be distributed, stratified by income, wealth, property and then introduce deductions and credits.
I mean, it's basically what they do now except we'd do away with all the, "We're enacting a law that does X, Y, and Z and we're adding a fee to this specific thing to pay for it."
And we'd stop doing things like adding red light cameras can stop being a play to increase revenue and we can focus on using moving violation fines to discourage unsafe driving.
But that would require an electorate that was okay with occasional tax increases and people being told by someone asking for their vote that they want to increase their taxes to make it more likely to vote for them. Right now those people are rare, they need to be the majority.
posted by VTX at 6:57 PM on September 13, 2016
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2) Big chain stores pay a lot in property taxes - millions of dollars
3) When you're paying million of dollars for anything it's often cost effective to pay a person a salary to try to minimize those expenses
4) when you pay somebody a salary to do something then it usually gets done regardless of how insane the means to the end are
_or_
1) when you have rules, you have a game
2) when you have a game, you have players
3) players find loopholes in the rules to help them win
4) people playing to win do crazy shit that seems indefensible to outsiders, but winning is all that matters
posted by GuyZero at 2:04 PM on September 12, 2016 [21 favorites]