> property taxes (which are very good, yet seen as unfair by owners, so they stay low)
Property taxes aren't actually good. Consider the economics of new construction: If the net present cost of building new housing is less than its net present value, it gets built.
Net present value is the value of future rents (or rents avoided if you live in it yourself) minus future costs, each discounted by the time value of money. Property tax is a future cost, so it reduces net present value, so you get less construction until rents increase to cover the cost of the property tax.
If you don't like high rents, you don't like property tax.
> Taxes at sale time
This too is a problem if you want people to downsize once they no longer need a piece of property, but e.g. raising the exemption amount so that approximately nobody is paying this tax would then not cost a lot in terms of revenue because as it is the problem is that people are already avoiding the tax by not selling.
If you tax something you get less of it. It's not different when you tax housing.
The observations about effects of tax seem fair enough, but perhaps miss the point of taxes. The local government presumably needs to balance the budget somehow. The income has to come from somewhere, and that's presumably going to be a tax of some sort. Whatever is taxed, there are going to be drawbacks and market distortions as a result.
The issue shouldn't be "property tax raises rent" but rather "is the current structure the least bad option". Assessing the latter is going to include a lot more than just real estate.
> Whatever is taxed, there are going to be drawbacks and market distortions as a result.
That still leaves the question of what you want to do. Moreover, that doesn't mean that all of the distortions are equal. Land value tax has fewer distortions than property tax[1], and property tax is differently distorting than various other taxes.
Meanwhile a lot of the taxes are going to social assistance programs, but if you're using taxes that tax the people who are the recipients of those benefits, that's entirely counterproductive. You'd be better off removing those taxes and not having those programs than setting up a huge bureaucracy that just takes money from the same people it gives it back to with strings and paperwork attached.
Property tax is one of the more regressive taxes because everyone needs a place to live.
[1] The proponents like to claim that it doesn't distort at all, but you still need the government to accurately value the land, which it can't do perfectly, and if it doesn't then you'll have e.g. land being abandoned because the tax is set too high and exceeds its value. This also creates a perverse government incentive if "abandoned" land goes to the government. Of course, property tax has a different perverse incentive: The local government wants to make housing more expensive so they get more property tax revenue.
Property tax are mostly taxes on the land. If you want to build housing, you get the necessary land cheaper, thanks to the property tax. I agree that the sales tax is bad though.
Land value tax would be on the land. Property tax includes the buildings, which is naturally the issue. If you want to replace a single family home with a 6-unit structure that each provide as much housing as the original unit, your property tax is going up, providing a corresponding deterrent to anybody doing that until the rent or market price of the building has gone up by the same amount.
Property taxes aren't actually good. Consider the economics of new construction: If the net present cost of building new housing is less than its net present value, it gets built.
Net present value is the value of future rents (or rents avoided if you live in it yourself) minus future costs, each discounted by the time value of money. Property tax is a future cost, so it reduces net present value, so you get less construction until rents increase to cover the cost of the property tax.
If you don't like high rents, you don't like property tax.
> Taxes at sale time
This too is a problem if you want people to downsize once they no longer need a piece of property, but e.g. raising the exemption amount so that approximately nobody is paying this tax would then not cost a lot in terms of revenue because as it is the problem is that people are already avoiding the tax by not selling.
If you tax something you get less of it. It's not different when you tax housing.