4 ms·

If people want to invest in stuff, let them invest wherever they want. A person with money has a better idea what to do with it than legislators & voters having

If people want to invest in stuff, let them invest wherever they want. A person with money has a better idea what to do with it than legislators & voters having no personal stake therein (or, worse, ulterior motives detrimental to the investor).

Pxtl 10y ago
The investor may have ulterior motives detrimental to the voters, and property in a big city is so heavily supported with taxpayer-funded services that the public has an interest in making sure it's used properly.
crdb 10y ago
This used to be my position as a committed (or idealistic, young) libertarian, but, following the principle that you should be able to do anything so long as it does not infringe another individual's rights: - there is such a thing as the commons; - there is a cost to the government to protect your rights which is much higher for land than "virtual" assets and the cost to investors ought to reflect it. Commons: I like that Singapore, for example, is taxing drivers around $90,000 per 10 years for the privilege of riding a car. The air is much cleaner and streets freer of traffic. Both of these were damaged by too many car owners. Similarly, the supply of land is limited whilst population can grow ad infinitum, creating ever upwards pressure on land prices. Cost: in terms of individual rights, the army, police and justice defend your right to own that land free of damage, spurious lawsuits to drain your resources, land grabs by powerful men, and foreign invasion forces. This forms the basis of modern society and the implementation of your individual rights. The cost is proportional to land area but not as strongly correlated with company size in the equity case (you might have a few more problems but not proportionally to market capitalisation, and they involve court cases rather than policing, with most of the high costs - lawyers - born by private parties). In theory, any land owners ought to be taxed, however, I make an exception for one's primary home (tax residence) considering that all citizen are naturally short housing (they need a place to live) and buying a home puts them in a housing neutral position and also has many positive effects on the commons (people are more invested in the future of their country if they own their home, less likely to move somewhere else, etc.). Vancouver is a great example of citizen who have created ideal conditions for home ownership by participating in building a peaceful, prosperous economy which respects individual rights. Foreigners have accordingly swarmed to take advantage of the fact they were not charged for the benefits arising from ownership. This has caused citizen - beyond the first generation of land owners - to be penalised for having built their own country up, as they end up unable to afford to live in it, burning up valuable income into paying high rents and house prices. A tax - which should offset what Canadians would pay elsewhere on productive activities, like income - is one of the best way to correct this imbalance, by charging the cost of enforcing individual rights to those who benefit from it.
- mistermann 10y ago
  Very well said, I wonder if a well fleshed out argument along these lines would help to persuade the portion of the population that "doesn't get" (aka those who already own real estate) why we should tax foreigners.
  - Pxtl 10y ago
    We don't need to "tax foreigners". If it was Toronto Bay Street investors or Albertan oil millionaires, the problem would be similar (smaller, of course, because there just aren't as many of them as there are wealthy Chinese scions). To me the correct approach is to simply shift the tax burden higher onto investment properties, and expand the definition of "investment property" to include homes owned and occupied by able-bodied people who don't work for a living and never earned the kind of money that would be needed to afford such a home. If you don't pay and never paid income tax, you don't need the tax exemptions that are given to homeowners.
    - Kadin 10y ago
      > to include homes owned and occupied by able-bodied people who don't work for a living and never earned the kind of money that would be needed to afford such a home. That sort of means testing isn't required (and would be open to system-gaming / perverse incentive creation anyway). You just apply capital gains tax to all properties with the exception of one primary residence per person, and you could even cap the primary-residence exemption at the median value of a home in a particular area. So if you own property and rent it out rather than living there yourself, it gets taxed as an investment, period. So that this cost isn't just passed on to renters, you should make the rental payments for your primary residence tax deductible, again perhaps capped at a median level so as not to perversely encourage higher rents. I think you could construct a tax regime that was revenue neutral pretty easily this way.
      - Pxtl 10y ago
        People are already gaming the principal residence exemption by loaning the money unemployed friends and family "students" who actually buy the homes and claim them as principal residences. That's why the principal residence exemption should be means-tested by income-tax, imho. If you do not and have not paid any income tax in Canada, then your property is really a de-facto investment property or a vacation home and it does not need a subsidy.
Normal_gaussian 10y ago
The optimal strategy for investment does not naturally align with the well-being of society. Constrained by well thought out and simple legislation however, investment becomes a powerful force for progress.
- briandear 10y ago
  Actually it does in a free market society. The only problem is we don't have a free market society.
  - Normal_gaussian 10y ago
    You are talking about an unrealisable ideal. If you disagree with this write out and publish a proposal detailing how a stable free market society would work. Such an essay should show you that some level of regulation is required, or else the proposal will be easy to tear down. Or, if I am wrong, it will become renowned for its content.
    - dmichulke 10y ago
      I can recommend H. Hazlitt "Economics on one Lesson", lots of the work of L. Mises and if by free you mean really really free, look for H. H. Hoppe or M. Rothbard. There are lots of essays about this and they claim it's realisable but the current power structures (such as state/government/central bankl) won't ever give away their power voluntarily.
      - ubernostrum 10y ago
        Amusingly, all such theories tend to be based in the assumption that the humans in the market will be perfectly informed and perfectly rational, but there's an article on the front page about the irrational biases people have when participating in markets...
        dmichulke 10y ago
TheBobinator 10y ago
No argument on taxes not being the solution here; investors make investments, and governments float new taxes and fines (bribes) to see what sticks. They are one in the same. With that said, I can't very well extradite and try the board of a foreign bank for flooding local markets with newly minted capitol in an effort to monopolize the market and capture the income of the people and gain leverage with the government. We've seen that happen in the US in 2003-2007. It did not end well for anyone, except a small few in on the scam. Suggesting that happens again is asking for a darwin award. Movements like BLM have a half-life, and if they don't burn out, the next phase is guerrilla warfare. First they robbed Lincoln mall by the 100's, then they marched on Michigan avenue multiple times by the 1000's. The pattern indicates the next step is walking banking execs out the window at downtown HQ's. Not a single jury anywhere in the states would convict them. By the way, if you think that's a good idea, nobody wins in that situation, either. The permanent, long-term solution here to Vancouver's problems is very simple. Mandate only citizens of BC can make investments in housing, give the foreigners a time-frame to sell their investments and get out. Then you simply limit the available credit to what people can reasonably and safely pay. Prices will fall to affordable levels in line with the costs of construction. Investing in houses is like investing in cars; they are consumables. Whether the people live in mini mansions or shanty's should largely be up to them and their incomes should be focused on other endeavors.
monetious 10y ago
The implication that the article is making is that these incomeless students may be involved in foreign money laundering.
crdoconnor 10y ago
>If people want to invest in stuff, let them invest wherever they want. In human slaves? Many of the same moral justifications for prohibiting the ownership of humans applies to ownership of land and it's very profitable for similar reasons.
- zo1 10y ago
  Are you going to name of these "moral justifications"?
  - nwah1 10y ago
    Locke, Rousseau, Adam Smith, John Stuart Mill, and most classical liberals frequently noted that land is the original inheritance of mankind. Given that we all deserve equal rights, it does not make sense for individuals to claim a greater share of land than others, since that implies they have greater rights to the planet. Of course, exclusive access rights are important for production and other reasons, so they usually would argue that landowners ought to be taxed in proportion to the land rights that they claim. Places like Hong Kong have been able to forego income taxation in favor of collecting rent from land.
angersock 10y ago
A person with money has a better idea what to do with it than legislators & voters having no personal stake therein (or, worse, ulterior motives detrimental to the investor). [Citation needed] There are lots of investments that are either frivolous or actively harmful to others. You can't make this claim without a bit more reasoning.

Pxtl 10y ago

The investor may have ulterior motives detrimental to the voters, and property in a big city is so heavily supported with taxpayer-funded services that the public has an interest in making sure it's used properly.

crdb 10y ago

This used to be my position as a committed (or idealistic, young) libertarian, but, following the principle that you should be able to do anything so long as it does not infringe another individual's rights: - there is such a thing as the commons; - there is a cost to the government to protect your rights which is much higher for land than "virtual" assets and the cost to investors ought to reflect it. Commons: I like that Singapore, for example, is taxing drivers around $90,000 per 10 years for the privilege of riding a car. The air is much cleaner and streets freer of traffic. Both of these were damaged by too many car owners. Similarly, the supply of land is limited whilst population can grow ad infinitum, creating ever upwards pressure on land prices. Cost: in terms of individual rights, the army, police and justice defend your right to own that land free of damage, spurious lawsuits to drain your resources, land grabs by powerful men, and foreign invasion forces. This forms the basis of modern society and the implementation of your individual rights. The cost is proportional to land area but not as strongly correlated with company size in the equity case (you might have a few more problems but not proportionally to market capitalisation, and they involve court cases rather than policing, with most of the high costs - lawyers - born by private parties). In theory, any land owners ought to be taxed, however, I make an exception for one's primary home (tax residence) considering that all citizen are naturally short housing (they need a place to live) and buying a home puts them in a housing neutral position and also has many positive effects on the commons (people are more invested in the future of their country if they own their home, less likely to move somewhere else, etc.). Vancouver is a great example of citizen who have created ideal conditions for home ownership by participating in building a peaceful, prosperous economy which respects individual rights. Foreigners have accordingly swarmed to take advantage of the fact they were not charged for the benefits arising from ownership. This has caused citizen - beyond the first generation of land owners - to be penalised for having built their own country up, as they end up unable to afford to live in it, burning up valuable income into paying high rents and house prices. A tax - which should offset what Canadians would pay elsewhere on productive activities, like income - is one of the best way to correct this imbalance, by charging the cost of enforcing individual rights to those who benefit from it.

mistermann 10y ago
Very well said, I wonder if a well fleshed out argument along these lines would help to persuade the portion of the population that "doesn't get" (aka those who already own real estate) why we should tax foreigners.
- Pxtl 10y ago
  We don't need to "tax foreigners". If it was Toronto Bay Street investors or Albertan oil millionaires, the problem would be similar (smaller, of course, because there just aren't as many of them as there are wealthy Chinese scions). To me the correct approach is to simply shift the tax burden higher onto investment properties, and expand the definition of "investment property" to include homes owned and occupied by able-bodied people who don't work for a living and never earned the kind of money that would be needed to afford such a home. If you don't pay and never paid income tax, you don't need the tax exemptions that are given to homeowners.
  - Kadin 10y ago
    > to include homes owned and occupied by able-bodied people who don't work for a living and never earned the kind of money that would be needed to afford such a home. That sort of means testing isn't required (and would be open to system-gaming / perverse incentive creation anyway). You just apply capital gains tax to all properties with the exception of one primary residence per person, and you could even cap the primary-residence exemption at the median value of a home in a particular area. So if you own property and rent it out rather than living there yourself, it gets taxed as an investment, period. So that this cost isn't just passed on to renters, you should make the rental payments for your primary residence tax deductible, again perhaps capped at a median level so as not to perversely encourage higher rents. I think you could construct a tax regime that was revenue neutral pretty easily this way.
    - Pxtl 10y ago
      People are already gaming the principal residence exemption by loaning the money unemployed friends and family "students" who actually buy the homes and claim them as principal residences. That's why the principal residence exemption should be means-tested by income-tax, imho. If you do not and have not paid any income tax in Canada, then your property is really a de-facto investment property or a vacation home and it does not need a subsidy.

Normal_gaussian 10y ago

The optimal strategy for investment does not naturally align with the well-being of society. Constrained by well thought out and simple legislation however, investment becomes a powerful force for progress.

briandear 10y ago
Actually it does in a free market society. The only problem is we don't have a free market society.
- Normal_gaussian 10y ago
  You are talking about an unrealisable ideal. If you disagree with this write out and publish a proposal detailing how a stable free market society would work. Such an essay should show you that some level of regulation is required, or else the proposal will be easy to tear down. Or, if I am wrong, it will become renowned for its content.
  - dmichulke 10y ago
    I can recommend H. Hazlitt "Economics on one Lesson", lots of the work of L. Mises and if by free you mean really really free, look for H. H. Hoppe or M. Rothbard. There are lots of essays about this and they claim it's realisable but the current power structures (such as state/government/central bankl) won't ever give away their power voluntarily.
    - ubernostrum 10y ago
      Amusingly, all such theories tend to be based in the assumption that the humans in the market will be perfectly informed and perfectly rational, but there's an article on the front page about the irrational biases people have when participating in markets...
      - dmichulke 10y ago

TheBobinator 10y ago

No argument on taxes not being the solution here; investors make investments, and governments float new taxes and fines (bribes) to see what sticks. They are one in the same. With that said, I can't very well extradite and try the board of a foreign bank for flooding local markets with newly minted capitol in an effort to monopolize the market and capture the income of the people and gain leverage with the government. We've seen that happen in the US in 2003-2007. It did not end well for anyone, except a small few in on the scam. Suggesting that happens again is asking for a darwin award. Movements like BLM have a half-life, and if they don't burn out, the next phase is guerrilla warfare. First they robbed Lincoln mall by the 100's, then they marched on Michigan avenue multiple times by the 1000's. The pattern indicates the next step is walking banking execs out the window at downtown HQ's. Not a single jury anywhere in the states would convict them. By the way, if you think that's a good idea, nobody wins in that situation, either. The permanent, long-term solution here to Vancouver's problems is very simple. Mandate only citizens of BC can make investments in housing, give the foreigners a time-frame to sell their investments and get out. Then you simply limit the available credit to what people can reasonably and safely pay. Prices will fall to affordable levels in line with the costs of construction. Investing in houses is like investing in cars; they are consumables. Whether the people live in mini mansions or shanty's should largely be up to them and their incomes should be focused on other endeavors.

monetious 10y ago

The implication that the article is making is that these incomeless students may be involved in foreign money laundering.

crdoconnor 10y ago

>If people want to invest in stuff, let them invest wherever they want. In human slaves? Many of the same moral justifications for prohibiting the ownership of humans applies to ownership of land and it's very profitable for similar reasons.

zo1 10y ago
Are you going to name of these "moral justifications"?
- nwah1 10y ago
  Locke, Rousseau, Adam Smith, John Stuart Mill, and most classical liberals frequently noted that land is the original inheritance of mankind. Given that we all deserve equal rights, it does not make sense for individuals to claim a greater share of land than others, since that implies they have greater rights to the planet. Of course, exclusive access rights are important for production and other reasons, so they usually would argue that landowners ought to be taxed in proportion to the land rights that they claim. Places like Hong Kong have been able to forego income taxation in favor of collecting rent from land.

angersock 10y ago

A person with money has a better idea what to do with it than legislators & voters having no personal stake therein (or, worse, ulterior motives detrimental to the investor). [Citation needed] There are lots of investments that are either frivolous or actively harmful to others. You can't make this claim without a bit more reasoning.