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Ah, so this bill will tax gains from productive activities like investing in and building companies, while exempting gains from rent seeking activities like re
by hahaxdxd123 5y ago
Ah, so this bill will tax gains from productive activities like investing in and building companies, while exempting gains from rent seeking activities like real estate.
Why am I not surprised?
- bestcoder69 5y agoMaybe they’re promoting productive investments in real estate, while punishing people for rent seeking off of companies just because they fronted the capital.
- bpodgursky 5y agoYou know that most real estate investing is like... buying land and extracting literal rent, right? This is a bizarre take.
- sokoloff 5y agoThough they do literally seek rent from their tenants, landlords who provide housing (or commercial real-estate) are not rent-seeking in the economic sense of that phrase, which is to seek to improve your economic position without creating any benefits for others. Providing housing or office space is clearly creating benefit for others.
- whydoibother 5y agoNo, they don't. Landlords are complete drains on society. They don't 'provide' housing. They limit supply and drive up costs for everyone else.
- sokoloff 5y agoFor multiple periods spanning over two decades in my life, I greatly appreciated the opportunity to live indoors without having to first purchase a house or apartment where I wanted to live.
- whydoibother 5y agoThat is possible without landlords. Gov't provided housing, for instance.
- vineyardmike 5y agoI greatly appreciate not needing to live in govt housing without buying a house.
- whydoibother 5y agoI am assuming you are basing this off the failed and racist public housing that has existed in America. There are better ways though, I assure you.
- AnimalMuppet 5y agoI have a house. I rent out the house. How am I limiting supply?
- whydoibother 5y agoIt is one less house people can buy.
- AnimalMuppet 5y agoAnd one more they can rent. If I buy a house, don't live in it, and don't rent it, that's limiting supply.
- whydoibother 5y agoIt is one more house they won't be able to buy and build equity with. Meanwhile, they will have to pay more than what the mortgage is to rent (you are extracting some kind of profit, after all) and have nothing to show for it at the end.
- AnimalMuppet 5y agoBy that logic, if I buy a house and live in it, I'm also constraining supply, because it's one more house someone else won't be able to buy. And, sure, it's true, in a nitpicky kind of way; they won't be able to buy it. It's also so absurd that your definition of "constraining supply" is clearly useless.
- bpodgursky 5y agoThis is sort of an unreal conversation to be having. If you buy a house to speculate on housing prices, and then rent it out, _you aren't adding anything_. That's entire point of the phrase "rent seeking". You've dumped capital into a limited-quantity good and then extract rent as it becomes more valuable. The only exception is those actually expanding the housing supply (which is hugely valuable and should be rewarded!), but this is a tiny tiny fraction of the housing stock! Most commercial real-estate is not any housing-add over if they didn't exist!
- vineyardmike 5y agoIt is true that speculative housing ownership does this, but the flip side is that many people can't actually afford a house (but can afford rent, eg. due to down payment costs), or don't want to own (moves cities often). In larger multi-tenant buildings, the average person wouldn't buy, and the landlord provides services, like maintenance (and sometimes in gyms/etc in higher end buildings). Sure those services can be purchased on the free market anyways, but bundling is pretty common in business.
- procombo 5y agoWhere I'm at they can't build houses fast enough. Overall it's a bad market because home owner's are more motived to borrow against their property value (heloc, etc) than move. And everyone else is kinda stuck. I own several rental units. Only freestanding homes. I definitely see myself as providing a value add. I fix things when they break, provide landscaping, provide housing to great people with not-great credit. They don't have to worry about a bunch of different utility bills. All value adds. And I take on plenty of risk where lenders don't want to. I don't get compensated all too well for it either. It's a very active way of investing long term, you may not see the value of, but it's definitely there. I could easily charge 40% more in rent right now, as could many.
- hahaxdxd123 5y agoInsane that you've been downvoted for this. Land value capture is literally THE example of economic rent. Adam Smith identified it in a little book called Wealth of Nations...
- bestcoder69 5y agoMy take is you haven’t shown a distinction that makes me care either way. More capital income from the wealthiest people comes from equity so it makes more sense as a target for taxes, assuming we want to tax the top more and the middle less.
- baybal2 5y agoWhy not to tax it too?
- cynicalkane 5y agoReal estate has a powerful lobby and many property owners are well-connected themselves. A lot of people own property and don't see it as free money. They empathize with property owners. Though it's easier money if you're politically connected and/or already wealthy. Stocks are held by rich people and techbros, in the minds of the public. Whether something is valuable or not valuable depends on who you empathize with. Right now occupations held by the wealthy are disliked and unpopular. Really you should just tax income at high rates and investment at near-0%. When people cash out their investments, tax them at ordinary income rates. This is how your 401(k) or IRA already works. You'll need to raise taxes on the affluent who spend instead of save, but that's not a bad thing.
- toomuchtodo 5y agoIf you borrow against your investments, you never have to sell, and your investments will simply grow faster than your borrowing costs. Wealth must be taxed, taxing income alone is insufficient. We have property taxes for property, there’s no reason we can’t have investment taxes for securities.
- 0xEFF 5y ago> Really you should just tax income at high rates and investment at near-0%. Does this address taxes lost from people being paid in stock units?
- conro1108 5y agoYou pay income tax on those units of stock when you are paid with them.
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- ac29 5y ago> Really you should just tax income at high rates and investment at near-0% The article mentions income taxes are unconstitutional in Washington.
- endisneigh 5y agoMy understanding is that real estate wasn’t subject to gains before this and it continues to be exempt. Not to mention the first 250K is exempt. So basically this only effects those who are gaining a lot.
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- klyrs 5y agoThis is like complaining that a news story is about topic A, but topic B is more interesting to you. It's a complete non-sequitur. Landlords should also be taxed, but that doesn't belong on this bill.
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- vineyardmike 5y agoHistorically, real estate is exempted from taxes because "we the society" want to encourage home ownership. This manifests from an american romance with land ownership. You used to be able to vote only if you owned land. You now can invest at (effective) discount. We've always favored land ownership.
- greenearth1 5y agoHave you tried managing real estate? It’s not like managing 100 shares of Tesla. Let’s just agree that taxation of any enterprise is rather detrimental to society. We should be pushing for sin and consumption taxes moreso than income, property, or capital gains taxes.