7 ms·

There are huge deductions for your primary residence This tax thing is an issue for people with multiple homes. Considering the set of people that concerns I w

by rtpg 7y ago

There are huge deductions for your primary residence This tax thing is an issue for people with multiple homes. Considering the set of people that concerns I wouldn’t cry too much over it

PunchTornado 7y ago
exactly, every country should implement high taxes for second homes.
- chiph 7y ago
  What about the people owning homes as investments, or as part of their retirement plans? You can argue that a lake house would be taxed because it's lived in part of the year (weekends), but what if the owners put it on AirBnB after the children go off to university and the family isn't enjoying it together anymore?
  - KaoruAoiShiho 7y ago
    They should invest their money elsewhere, like new enterprises, instead of homes as rent-seeking is a negative on society, not a productive activity.
    - snowwindwaves 7y ago
      What if I require some leisure time to recharge so I can go back to work and be fully Productive? I need a lake house to go and relax at. The couple provides use of their lake house for my vacation.
    - formercoder 7y ago
      How can you state that rent seeking is a negative on society? How is it not just optimal capital allocation?
      - luckydata 7y ago
        that's the literal definition of rent seeking. https://en.wikipedia.org/wiki/Rent-seeking https://en.wikipedia.org/wiki/Rent-seeking
        formercoder 7y ago
        Oh interesting that wasn’t a term I was actually familiar with. I thought we were just discussing the idea of purchasing property and renting it out.
        luckydata 7y ago
        well, that's also rent seeking. Some concepts in economics are not as straightforward as you would first think especially if not familiar with macro / micro concepts.
      - snidane 7y ago
        What is usually meant by rent-seeking is more akin to rent-extraction. Here rent doesn't mean the monthly payment (lease) but an 'economic rent'. That is an income which is guaranteed by some distorition of current market conditions. Most often by some kind of monopoly. Eg. rents for pharma industry because potential competitors are not allowed to enter the market due to industry regulation. This allows the current players extract the guaranteed rent - monopoly income.
      - zzzzzzzza 7y ago
        production = rent + wages + interest production - rent = wages + interest when productivity grows but wages do not, that means the marginal contribution of any new worker is being entirely eaten by various forms of rent within the economy. Those who collect rent have no incentive to do anything but perpetuate their rent collection and most likely if they were to re invest their gains would probably reinvest them in either acquiring more rent or protecting their existing rent... which is why the government should be funded off of monopoly/pigovian taxes like the land value tax, or removing intellectual property deductions from the corp income tax, as opposed to income or consumption taxes - a philosophy known as georgism.
    - sgc 7y ago
      That is higher risk and many, many people cannot accept it. They are in no position to lose everything on your dumb startup idea.
    - chiph 7y ago
      I think you're misusing the term "Rent Seeking". The important part of its definition is the manipulation of the social or political environment to gain financial advantage. It has nothing to do with collecting rent from a tenant. An example of rent-seeking would be if I were a steel producer and I ask the government to impose a tariff on imported steel.
      - conjectures 7y ago
        It is quite appropriate actually. Speculative property buying is very much about trying to capture wealth without creating any wealth. C.f. also NIMBYism.
        mcguire 7y ago
        1. Speculative property buying provides liquidity to an otherwise exceptionally illiquid market. 2. You have literally just described the stock market.
        jodrellblank 7y ago
        1. given that it doesn't change the amount of property, how does it provide anything at all? 2. The stock market is exactly people trying to get rich without adding any value to the world.
        leakybit 7y ago
        Where do you expect tech workers to sell their RSUs?
        conjectures 7y ago
        1. This hasn't been demonstrated. In fact, when there is a housing shortage in the areas considered that strongly hints that friction in housing purchase is due to other factors than being able to match a buyer with a seller. So the average dollar value of this supposed liquidity is likely to be miniscule compared to the average dollar value of the capital appreciation. 2. I'm not going to get bogged down refuting bad analogies here.
    - fbonetti 7y ago
      You’re confusing “contract rent” (an amount paid on a recurring basis for the temporary use of goods, services, or property) with “economic rent” (an amount that is paid on top of the “natural” price due to a distortion in the market). Rent-seeking refers to the latter definition of rent. Renting property is not rent-seeking. Wielding the power of local government to prevent new housing from being built is rent-seeking.
    - mcguire 7y ago
      ...aaaaand suddenly all of those people currently renting have nowhere to live. (I swear, the Kantian Categorical Imperative should be taught in high school just for its entertainment value.)
  - zanny 7y ago
    Housing is a basic necessity, using it as an investment allocates scarce finite resources to you when you don't need it while consuming limited supply thus reducing the available stock for those that do. The business of buying and selling houses on the flip isn't particularly bad (though it's often predatory and rent seekish) but hoarding property to either rent or just squat to take advantage of the appreciation said hoarding does to drive up prices is evil. Especially when you consider how the entire perverse and unsustainable economic model of endlessly and perpetually rising property values against inflation causes substantive suffering while governments will bend over to preserve it since the landlords are the wealthy interests they want to appease to stay in power. There are much less amoral, much more productive, and much less predatory ways to grow wealth. Whenever anyone looks at residential property as an infinite profit machine it is a failure of the society to produce productive & positive investment options for that wealth.
    - snowwindwaves 7y ago
      There is loads of cheap housing in USA and Canada - just not in popular places. Anyone moaning about the price of real estate should check to make sure they aren't trying to live in one of the most desirable places to live on the planet.
      - Benjamin_Dobell 7y ago
        How far should people be expected to commute from these less diserable locations to their place of employment? Localities with an abundance of cheap housing tend to have significantly higher unemployment rates[1], [1] https://research.stlouisfed.org/publications/employment-research/is-local-unemployment-related-to-local-housing-prices https://research.stlouisfed.org/publications/employment-rese...
        pdimitar 7y ago
        Let's include pressure to work remotely in the whole equation. I see no reason why humanity must crowd trample each other in tiny metropolitan areas when there are so many affordable -- and likely more beautiful -- places to live in. Have basic infrastructure in place, internet excluded, and the problem is solved.
  - snidane 7y ago
    This is a good point. And that is why land taxation is preferred to property taxation. Land ownership = people give you rights for exclusive use. So you pay them for the privilege Property tax = another form of income or labor tax. Somebody put effort and energy into the building, proportion of which is taken away
  - wvenable 7y ago
    > What about the people owning homes as investments, or as part of their retirement plans? Housing as an investment does not benefit society.
    - theparanoid 7y ago
      A significant percentage of people are not financially stable enough to buy a home and pay a monthly mortgage on time for 15-30 years. But they are able to rent.
      - deleted 7y ago
        [deleted]
      - mjevans 7y ago
        You're assuming current prices in a distorted market. Since the distortions of regulation for various reasons can't (and including safety distortions, shouldn't) be removed, they should instead be managed. There simply isn't enough housing within the economic zone that jobs exist in; this needs to be fixed.
        A2017U1 7y ago
        It's such a bizarre state of affairs in modern capitalist societies. These sorts of supply shortfalls are fixed in no time for every other type of product or service. Yet housing is that one thing which has so many vested interests throughout the population. If any other basic need rose so much above inflation no one would consider it a positive for society.

by rtpg 7y ago

There are huge deductions for your primary residence This tax thing is an issue for people with multiple homes. Considering the set of people that concerns I wouldn’t cry too much over it

PunchTornado 7y ago

exactly, every country should implement high taxes for second homes.

chiph 7y ago
What about the people owning homes as investments, or as part of their retirement plans? You can argue that a lake house would be taxed because it's lived in part of the year (weekends), but what if the owners put it on AirBnB after the children go off to university and the family isn't enjoying it together anymore?
- KaoruAoiShiho 7y ago
  They should invest their money elsewhere, like new enterprises, instead of homes as rent-seeking is a negative on society, not a productive activity.
  - snowwindwaves 7y ago
    What if I require some leisure time to recharge so I can go back to work and be fully Productive? I need a lake house to go and relax at. The couple provides use of their lake house for my vacation.
  - formercoder 7y ago
    How can you state that rent seeking is a negative on society? How is it not just optimal capital allocation?
    - luckydata 7y ago
      that's the literal definition of rent seeking. https://en.wikipedia.org/wiki/Rent-seeking https://en.wikipedia.org/wiki/Rent-seeking
      - formercoder 7y ago
        Oh interesting that wasn’t a term I was actually familiar with. I thought we were just discussing the idea of purchasing property and renting it out.
        luckydata 7y ago
        well, that's also rent seeking. Some concepts in economics are not as straightforward as you would first think especially if not familiar with macro / micro concepts.
    - snidane 7y ago
      What is usually meant by rent-seeking is more akin to rent-extraction. Here rent doesn't mean the monthly payment (lease) but an 'economic rent'. That is an income which is guaranteed by some distorition of current market conditions. Most often by some kind of monopoly. Eg. rents for pharma industry because potential competitors are not allowed to enter the market due to industry regulation. This allows the current players extract the guaranteed rent - monopoly income.
    - zzzzzzzza 7y ago
      production = rent + wages + interest production - rent = wages + interest when productivity grows but wages do not, that means the marginal contribution of any new worker is being entirely eaten by various forms of rent within the economy. Those who collect rent have no incentive to do anything but perpetuate their rent collection and most likely if they were to re invest their gains would probably reinvest them in either acquiring more rent or protecting their existing rent... which is why the government should be funded off of monopoly/pigovian taxes like the land value tax, or removing intellectual property deductions from the corp income tax, as opposed to income or consumption taxes - a philosophy known as georgism.
  - sgc 7y ago
    That is higher risk and many, many people cannot accept it. They are in no position to lose everything on your dumb startup idea.
  - chiph 7y ago
    I think you're misusing the term "Rent Seeking". The important part of its definition is the manipulation of the social or political environment to gain financial advantage. It has nothing to do with collecting rent from a tenant. An example of rent-seeking would be if I were a steel producer and I ask the government to impose a tariff on imported steel.
    - conjectures 7y ago
      It is quite appropriate actually. Speculative property buying is very much about trying to capture wealth without creating any wealth. C.f. also NIMBYism.
      - mcguire 7y ago
        1. Speculative property buying provides liquidity to an otherwise exceptionally illiquid market. 2. You have literally just described the stock market.
        jodrellblank 7y ago
        1. given that it doesn't change the amount of property, how does it provide anything at all? 2. The stock market is exactly people trying to get rich without adding any value to the world.
        leakybit 7y ago
        Where do you expect tech workers to sell their RSUs?
        conjectures 7y ago
        1. This hasn't been demonstrated. In fact, when there is a housing shortage in the areas considered that strongly hints that friction in housing purchase is due to other factors than being able to match a buyer with a seller. So the average dollar value of this supposed liquidity is likely to be miniscule compared to the average dollar value of the capital appreciation. 2. I'm not going to get bogged down refuting bad analogies here.
  - fbonetti 7y ago
    You’re confusing “contract rent” (an amount paid on a recurring basis for the temporary use of goods, services, or property) with “economic rent” (an amount that is paid on top of the “natural” price due to a distortion in the market). Rent-seeking refers to the latter definition of rent. Renting property is not rent-seeking. Wielding the power of local government to prevent new housing from being built is rent-seeking.
  - mcguire 7y ago
    ...aaaaand suddenly all of those people currently renting have nowhere to live. (I swear, the Kantian Categorical Imperative should be taught in high school just for its entertainment value.)
- zanny 7y ago
  Housing is a basic necessity, using it as an investment allocates scarce finite resources to you when you don't need it while consuming limited supply thus reducing the available stock for those that do. The business of buying and selling houses on the flip isn't particularly bad (though it's often predatory and rent seekish) but hoarding property to either rent or just squat to take advantage of the appreciation said hoarding does to drive up prices is evil. Especially when you consider how the entire perverse and unsustainable economic model of endlessly and perpetually rising property values against inflation causes substantive suffering while governments will bend over to preserve it since the landlords are the wealthy interests they want to appease to stay in power. There are much less amoral, much more productive, and much less predatory ways to grow wealth. Whenever anyone looks at residential property as an infinite profit machine it is a failure of the society to produce productive & positive investment options for that wealth.
  - snowwindwaves 7y ago
    There is loads of cheap housing in USA and Canada - just not in popular places. Anyone moaning about the price of real estate should check to make sure they aren't trying to live in one of the most desirable places to live on the planet.
    - Benjamin_Dobell 7y ago
      How far should people be expected to commute from these less diserable locations to their place of employment? Localities with an abundance of cheap housing tend to have significantly higher unemployment rates[1], [1] https://research.stlouisfed.org/publications/employment-research/is-local-unemployment-related-to-local-housing-prices https://research.stlouisfed.org/publications/employment-rese...
      - pdimitar 7y ago
        Let's include pressure to work remotely in the whole equation. I see no reason why humanity must crowd trample each other in tiny metropolitan areas when there are so many affordable -- and likely more beautiful -- places to live in. Have basic infrastructure in place, internet excluded, and the problem is solved.
- snidane 7y ago
  This is a good point. And that is why land taxation is preferred to property taxation. Land ownership = people give you rights for exclusive use. So you pay them for the privilege Property tax = another form of income or labor tax. Somebody put effort and energy into the building, proportion of which is taken away
- wvenable 7y ago
  > What about the people owning homes as investments, or as part of their retirement plans? Housing as an investment does not benefit society.
  - theparanoid 7y ago
    A significant percentage of people are not financially stable enough to buy a home and pay a monthly mortgage on time for 15-30 years. But they are able to rent.
    - deleted 7y ago
      [deleted]
    - mjevans 7y ago
      You're assuming current prices in a distorted market. Since the distortions of regulation for various reasons can't (and including safety distortions, shouldn't) be removed, they should instead be managed. There simply isn't enough housing within the economic zone that jobs exist in; this needs to be fixed.
      - A2017U1 7y ago
        It's such a bizarre state of affairs in modern capitalist societies. These sorts of supply shortfalls are fixed in no time for every other type of product or service. Yet housing is that one thing which has so many vested interests throughout the population. If any other basic need rose so much above inflation no one would consider it a positive for society.