YES, NEW TAXES
I’ve been meaning to mention this, but Steven Taylor has beaten me to it: Sometimes, raising taxes is just necessary. The property tax situation in California is such a case:
Buffett said he pays $14,401 in annual property taxes on his $500,000 home in Omaha, Neb., but only $2,264 on his $4 million home in Laguna Beach.
Proposition 13, which limits property tax hikes to no more than 2 percent a year, is considered politically untouchable in California.
Alabama provides another example, as the tax system is ridiculously regressive, with sales taxes in the 10 percent range in some localities to offset almost non-existent property taxes. I paid less a year in property taxes on my house in Alabama than I’ll be paying a month in Northern Virginia on a townhouse. (Although part of that’s a function of the price variation.) The sales taxes are 4.5% here, though.
Update (1348): It occurs to me that, if he’s talking present value rather than purchase price, Buffett’s $500,000 home in Omaha is almost certainly larger and nicer than his $4 million home in Laguna.
Update (1456): Justene Adamec disagrees. (With my initial point; she says nothing about the comparative housing markets in Nebraska and California.)