There are several problems with your line of argument here. The biggest one is that you don't pay capital gains tax on the sale of your primary home. Some othe

There are several problems with your line of argument here. The biggest one is that you don't pay capital gains tax on the sale of your primary home. Some other problems with your thinking: * Property tax is, in general, much lower than capital gains. * Taxes paid to a state can not cover your federal tax bill (the lion's share of capital gains taxes are federal). In other words, it's not the same "you" in all cases listed above.