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Because boomers voted to defer fully funding pensions until later. Now it's later. We're paying for past work and current work.

In Washington State, Puget Sound Energy is a for-profit utility owned by mostly pension plans! Their guaranteed ROI is sucked out of the productive economy. Everywhere you look rent is being extracted either by the 0.01% or the elderly, and the working class must slave to get 1/10 what they gave themselves.

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At the level of an economy, I don't see how funding model can make a difference. Ultimately, there are now old people that want/vote for some level of service, and young people that provide it to them. The young people can and perhaps will at some point decide to revolt, or the old people will die.

Not an economist but I don't see how money can be anything other than an accounting tool at that level. If they had "paid for it" back in the day, young people would still be screwed.

The two big ways to increase prosperity that I see are for people to take care of their health so they need fewer medical services, and for fewer people to be devoted to administration (e.g. the medical billing quagmire, SaaS companies focused on how to better extract rent) or convincing people to buy stupid crap (c.f. the giant advertising industry that swallows up bright workers to build a surveillance and propaganda apparatus instead of e.g. industrial automation), fewer pointless wars, and more people devoted to actually doing things people need or building infrastructure (e.g. solar).

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> there are now old people that want/vote for some level of service

The problem isn't that there are old people, is that there's currently a glut of old people, which puts real strain on the system. Being old is expensive for governments. Not only do older people not typically pay nearly as much in taxes, they also require more resources to support.

So many of today's problems come down to the simple demographic fact: there's a lot of baby boomers, and they're getting old.

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Isn't it better for society if retirees downsize to a retirement community and allow young families to move in to the neighborhood with schools and amenities?
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While that may be useful, there should never be a necessity to move out of a house you’ve paid off, and quite well may have built up to support your own aging in place. Some people want a “forever home”, and that’s okay.

In some countries and cultures the good of the many comes before the good of the individual, no matter the sacrifices required to get there. The US (and to a slightly lesser degree, Canada) generally does not subscribe to such a cultural mantra.

Edit to add: for the cases where the societal good really does outweigh the personal good, we have a tool for that: eminent domain, which is how we build train lines and so forth.

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>While that may be useful, there should never be a necessity to move out of a house you’ve paid off

This line of logic doesn't follow. There's plenty of old people who need to move out for non-financial reasons (e.g. can't live independently anymore), and it doesn't really make sense to me that having to move out because you can't afford your mortgage is okay while not being able to afford your taxes isn't. In any case, we can have our cake and eat it too by building more housing. Homes become affordable for young people if supply increases and the tax base broadens enough that taxes go down for established homeowners.

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At least in the US, mortgages are typically fixed cost (I know this is not the case in many other countries, like the UK). You know when you sign the contract what your monthly cost will be, for the life of the loan. ARM loans are an exception to this, but ARM loans are nearly universally considered a terrible idea unless interest rates are egregiously high at signing time, or some other edge case applies to you.

Thus, you can budget around the mortgage payment in a predictable way, and if you have to move out because you can no longer afford it, that's a very different thing than if your property taxes magically change because a theoretical buyer may theoretically be willing to pay some astronomically higher cost for your house than you paid for it.

So, respectfully, I disagree with the framing that we have to take both or neither. They are separate budgeting concerns, and separate policy concerns.

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A point against: if someone was an early adopter in a community that urbanized over 30 years, in effect the increased value means their future ownership at present rates requires the collective subsidy of their neighbors. Young families subsidizing the elderly in this way is a huge issue in tax burden disparity where I live.
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How so? e.g. anywhere I've looked, schools are a huge part of the budget. Special education alone is over 10% of the county budget where I live. Schools in total are over half of city+county. The elderly wouldn't be contributing to service demand there. They're likely also not going on tons of crime sprees necessitating police, generally another large budget item.

Like another poster said, things like pensions and medicare might overall drain the entire economy, so the end result is the same, but that seems more diffuse than local tax bases, and wouldn't properly appear in local government budgets.

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If we're going for a "better for society" angle, I have so many other things that are far more impactful for society and less damaging to the individuals that we will never get around to messing with evicting pensioners so younger families can use their spot to get to school.
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People make the best decisions for them and they have the freedom to do so. Who am I to decide that their 2 bedroom bungalo needs to be torn-down for a massive 5 bedroom infill for example.
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Given the enrollment collapse we're not running out of space in our schools LOL such that we have to kick seniors out of their houses to make space.

They're also economically and socially viable participants in the community.

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This is but one of the ways well-meaning people get displaced. And, frankly, th the is hypothetical family is the most fortunate of that class. They have equity and a pension. Playing my tiny Monoprice violin, from the 4th apartment I've lived in over the past 10 years (not including couch-surfing). And even I'm still on the "fortunate" side of the line, if just barely.

I don't think people really understand how bad it is out here. I imagine that if a dignified line on the base standard were held, there would be less of a need for this kind of middle-class pearl-clutching.

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I live in a municipality that taxes like OP and you don't understand how OP described it. Lets try with easy numbers:

Y2K: buy an 1/8th of a million dollar house. There are 10 houses in the village and an annual budget of $10K. The total value of all houses in my village is $1.25M but it really doesn't matter. As the owner of 1/10th of the "total housing value" in the village, I pay 1/10th the annual budget of $10K which is $1K prop tax.

If your mental model is the city tax rate is 0.8%, that is ... numerically correct but its mere numerology.

2026: house is now worth 1/2 of a million dollars. There are 10 houses in the village and an annual budget of $10K. The total value of all houses in my village is $5M but it really doesn't matter. As the owner of 1/10th of the "total housing value" in the village, I pay 1/10th the annual budget of $10K which is $1K prop tax.

If your mental model is the city tax rate historically was 0.8%, then you'd have to pay $4K/yr, but it doesn't even remotely work that way, so it simply doesn't matter. Its just numerology. My fraction of total property ownership "value" times the annual village budget is what I'll be taxed, which in this case is the same old $1K.

In reality grandma gets kicked to the street because inflation raises the price of everything, including real estate, but real estate is not even remotely the problem or the solution. Grandma might have afforded a house and its taxes when a McDonalds Big Mac was 75 cents each but now that its $13.49 the village budget has gone up 10x, 20x what it was when she bought, so she better find a way to make 10x, 20x more money or not only is she not going to pay her fair share of the budget via taxes, she's not going to eat food either.

"Now that neighbourhood is unaffordable." Thats the real problem. No one can move in and pay the city budget, and the city budget explodes because now they have to pay the dog catcher at least $250K/yr to live there and nobody can afford to rob peter to pay paul quite that much...

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