Palm Beach Real Estate and Loans

I started my day off early by getting aggravated at what was on the front page of the Post's Sunday edition.

Once again, a negative real estate related story.  The article "Tax Flip Benefits Richer Families" -  starts off by setting the tone of how the new tax proposal (which we will be voting on in November) will hurt lower-income families and mainly benefit the rich.

If you have not heard about the new proposal, you can read about it here in More Proposed Tax Cuts to Benefit Palm Beach Real Estate Owners. 

Basically, the idea is to pair a 25% cut in property taxes with a 1% increase in sales tax to offset the loss.

I had a long talk with a friend of mine today - Doug Stroud (a mortgage industry veteran)-  who also found the article 'not quite right'.

This is what he had to say:

"  We all know that real estate is in the tank and insurance, mortgage, real estate, construction, building supply and a myriad of other construction and financial services rely on a robust real estate market. We do not require double digit property price increases each year, we just need an environment where people want to engage in transactions. 

 Trading a cut in property taxes for a sales tax increase makes perfect sense. One reason is that a tax on property taxes wealth building while a tax on sales taxes consumption. I would suggest one of the problems we have today is that people do not focus enough on building wealth and focus too much on consumption. One of the purposes of tax policy is to foster social engineering in a way that benefits the public. I believe a tax policy that encourages wealth creation as oppose to consumption is sound tax policy. Also, I don't see in the numbers where they analyze how much additional revenue that will be brought in from tourist who will pay additional sales taxes. The more of the tax burden we can shift on to tourists who benefit from our beaches, roads, and other parks and amenities also makes perfect sense.

 The idea that poor people do not benefit is ludicrous.  A robust real estate market will provide untold construction jobs that benefit the "working man" more so than any other segment of the economy. I am sure there are a ton of out of work construction workers that would pay an additional penny on sales tax in exchange for an improved economy that provides them with jobs and opportunities."

Well said -

I talk to a lot of people who are interested in purchasing property here and one thing that gets brought up nearly every time is how ridiculous the property taxes are.  It does stop people from buying here!

There is a lot more to discuss - come back tomorrow for Part 2.