> 2. It's not the same thing. You can choose how extravagant a house to live in relative to your total wealth and your income to make sure that you can cover the property tax bill while still meeting your saving goals.
This isn't really true. Yes, I can control the value of my home at a single point in time but if my neighborhood gentrifies, even if I make no improvements to my home, my taxes will go up. You can technically plead your case to the tax assessor and argue that because your bathrooms and kitchens are "obsolete" you technically shouldn't be valued as high as your neighbors but your taxes are going up regardless.
I understand that in California there are rules around how often they can raise your property taxes, but for nearly everyone else if your home value goes up so will your taxes.
Moving isn't free, and it can be a burdensome expense. When the housing crisis a lot of people had personal financial issues because divesting from the mortgage they were engaged with and acquiring a more modest property would still involve being taxed on the full value of your house, expenses involved with the mechanics of changing residences, and then somehow affording a down payment on a new place - or else being forced to declare bankruptcy and re-enter the renting market with nothing but fresh income.
The technical concept is that housing is an illiquid asset - there is a friction in converting it to cash, that friction may be monetary (a fee, taxes, a loss of value, sale prices etc...) or it may be time (conversion may simply not be an action that can be executed at will, there may be windows or complex ownership hand-off processes that require weird timing) in the most common cases (including housing) the asset is liquidatable with value generally decrease relative to speed, offloading a property with a fixed window of a month will net you less revenue then having a sale posted for an extended period - having a sale window of a week or less would almost certainly result in a much decreased sale price.
Given the nature of the wealth taxes that have been proposed, you will never become homeless or destitute. Having to pay a few points above 20 or 50 mil or whatever is not going to break anyone the way property taxes will and do.
This isn't really true. Yes, I can control the value of my home at a single point in time but if my neighborhood gentrifies, even if I make no improvements to my home, my taxes will go up. You can technically plead your case to the tax assessor and argue that because your bathrooms and kitchens are "obsolete" you technically shouldn't be valued as high as your neighbors but your taxes are going up regardless.
I understand that in California there are rules around how often they can raise your property taxes, but for nearly everyone else if your home value goes up so will your taxes.